[00:03:12] Eric Weatherholtz: He’d ride these ranch roads in a, you know, powder blue, Lincoln Continental, and then kind of report back to headquarters what was going on. And it really struck a chord with me that you could create. Just through a signature on some paper, the ability to participate in the revenues of all these different things that went on.

[00:03:32] Eric Weatherholtz: I also learned that it was something best done by inheriting one of these massive ranches. Kind of impossible to do otherwise. But I think that concept sort of stuck in my mind. And my job there was, I also kind of got this MBA through osmosis in a way, but I would take people out on these quail hunting sort of expeditions, and most of the folks were these, you know, kind of titans of industry.

[00:04:00] Eric Weatherholtz: And I would Hear sort of piece together the stories of things that they were talking about from, you know, whatever it was, crude prices or bond offerings, house bills, all these different things. And, and I sort of threaded together how the, how the real world worked. And that was interesting. But the other thing that hit me during that stint was one day I picked up a went over to pick up my group to take ’em out.

[00:04:23] Eric Weatherholtz: Its these four guys. The ringleader of it was a guy named Jim Harrison. And Jim was one of the great writers in poets in American history. He wrote something called all kinds of things, but Legends of the Fall, if you remember. Screenplay and then you can look him up. Anthony Bourdain did a special on him years ago.

[00:04:42] Eric Weatherholtz: You can probably find out on YouTube with this amazing character, Hemingway s kind of fellow. And then he was with another guy who was, there was four of ’em. There was a guy that was this French count who has done a documentary, sort of the psychedelic documentary about tarpin fishing in the Florida [00:05:00] Keys in the seventies.

[00:05:01] Eric Weatherholtz: And then there’s this guy, Russell Chatham, who was a impressionist, one of America’s great impressionist painters. We talk about him like a Gogan or a Saez. And then there was this guy Tom McGuane, who’s another one of the great American writers. Anyway, I take these guys out and they were so different from the typical big shot oil and gas people, and they, I don’t know how to describe it other than there was this vividness of how they behaved.

[00:05:26] Eric Weatherholtz: And instantly we were cracking up and they were talking over each other. And as we rode around on this, in this. And the, this just wide ranging conversation that went everywhere from Russian literature to modern art, to jazz, to ply fishing, to you name it, to lots of talk about beautiful women and the , everything that was good and right with the world.

[00:05:50] Eric Weatherholtz: And it had, I mean, I’m telling you this story 30 years later, but it, it had this big effect on me about embracing life living. And afterwards we went back and, [00:06:00] and we were having a few cocktails after at the end of the day. And, and Jim said, kind of pulled me aside because we’d really hit it off. And he said, look, you can, there’s two ways you can go about life and it’s completely up to you.

[00:06:12] Eric Weatherholtz: You can do what other people want you to do or you can do what you want to do. And it’s that simple. And if you want to do what you want to do, it takes a passion that is illogical. Because it’s gotta be something that’s so ingrained in your bones, enough to drag you through the difficult times of getting there.

[00:06:34] Eric Weatherholtz: He said, look around this room, the four of us, nobody can tell us what to do. And we’ve scratched and clawed to create a living and they were financially amazingly successful. All of these guys in industries that don’t normally end that way, but he said, only through this passion that we have for what we do, are we able to live this lifestyle that we.

[00:06:55] Eric Weatherholtz: And that resonated with me. The idea of, you know, that little [00:07:00] time on that ranch of one, sort of getting a hint at one, how real estate worked, but then the sort of prod to kind of find your way and create a way of living your life that embraces the living part and not going through sleepwalking. And that sort of kind of kicked off this circuitous route that, you know, ended up in the real estate.

[00:07:22] Patrick Donley: I love that story. It almost seems like an idyllic job. Was that a job right outta college that you were doing? 

[00:07:29] Eric Weatherholtz: Yeah, well, I, I’d bounced around sort of, through the mountain west for a while and then ended up there and then that kind of led to a severe case of brokeness and I needed to get more serious about things and that became the catalyst to get move into the real estate.

[00:07:46] Eric Weatherholtz: I love their advice to 

[00:07:47] Patrick Donley: you, the it, but it takes a lot of courage to live that kind of life. It takes going against the grain, it takes the courage of your own convictions. Do you have any ideas or thoughts on that about how you can, how a young guy, because I saw Moses actually post [00:08:00] today about advice he would give to a young person.

[00:08:03] Patrick Donley: He kind of opened it up. Like what kind of advice would you give to a younger person who wanted to pursue real estate, but we could say any kind of passion that they wanted to. Do you have any thoughts on that? Like have courage when everybody around you maybe is telling you like, why would you want to be whatever, a real estate developer, why would you want to be a writer?

[00:08:19] Patrick Donley: Why would you want to be an artist? You know, like, that’s 

[00:08:21] Eric Weatherholtz: crazy. I think the, the way that these guys did it was living, having enough conviction to live in. It meant so much to them to live in abject poverty, to the point where they were then able to down the road, create these really terrific lifestyles.

[00:08:39] Eric Weatherholtz: The great stuff about, the great thing about real estate is that’s not really require. And if you play the cards right, you can, times will be laying and you can tighten your belt, but there’s plenty of ways to make some hay while you, while you get kicked off. So I think the biggest thing people need to do is not ring their hands about finding something that completely [00:09:00] lights their passion.

[00:09:00] Eric Weatherholtz: because if you’re starting out, you don’t know. And my experience, the people that kind of get. Have just started and one thing leads to another thing, and the most unexpected things come from the, from the path that you take. You wouldn’t think that you would end up in the direction that you’re going or that you end up, but the point of it is just starting.

[00:09:20] Eric Weatherholtz: I think almost if you look back at any important moment in human, Any invention or anything that changed the world was all about, came from some other direction. I like the 3M post-it notes. The ubiquitous thing was a failed adhesive , and so that you, you go down one path and often doesn’t work out and some other door will open or emerges from that.

[00:09:46] Eric Weatherholtz: Good advice. Did 

[00:09:47] Patrick Donley: so while you were at the ranch, would you call it a passion for real estate? Did that develop. 

[00:09:54] Eric Weatherholtz: No, I think it was like, wow, this is interesting. She mead’s working for a living. How do I get [00:10:00] started in that? And with nothing more than, let’s give that a shot. You know, I picked up and actually moved to Nashville, Tennessee, made some weasel my way into a job and that job led to another job and that job led to another job.

[00:10:14] Eric Weatherholtz: And you know, you end up picking up some degree of expertise. Talk 

[00:10:19] Patrick Donley: to us about that first job. I think it was, was it called the Rosh company that you were working for At one point, it 

[00:10:24] Eric Weatherholtz: wasn’t the Rouse Company, but it was a group of people that had peeled off from the Rouse Company. Jim Rouse was one of the great developers of our time, and he had done some incredible groundbreaking type developments.

[00:10:40] Eric Weatherholtz: And this group of Chival had been there to kind of witness a lot of that and took a lot of those lessons learned. And they formed a company that at the time, and this is the early nineties, was very busy because they were intermediaries, helping lenders who had foreclosed on assets. So the other thing, if I was [00:11:00] starting out, finding a place that’s very busy is a great place to be because they’re often understaffed and if you have limited skills, and sometimes it doesn’t hold you back and they’ll grab you and throw you into the game.

[00:11:14] Eric Weatherholtz: And that’s, and that’s what happened with me. So they had so much business going on, so few people to do it. I happen to be hanging around. And I got thrown into the fire with complete discretion over these very large projects simply because they didn’t have anybody else to do it. 

[00:11:31] Patrick Donley: So how were you, were you just learning as you were going along?

[00:11:34] Patrick Donley: Were you teaching yourself? Did you have somebody that was by your side or did you, you, it sounded like you had zero oversight. 

[00:11:41] Eric Weatherholtz: It was close to it. There was a very bright, really still some of the brightest people that I’ve met in the, in the. But they were so busy doing other things that you kind of had to figure it out on your own.

[00:11:52] Eric Weatherholtz: And the bar was pretty low, which was also helpful because the whole world had kind of gone to hell as [00:12:00] far as real estate was concerned. So you could make it, if you could just stabilize it, you were ahead of most of the game. And so if you could actually make something slightly. It was a huge wed, so it was, it was a great kind of training ground because everything was, all options were wide open and you got to try ’em and see what worked and what didn’t.

[00:12:19] Eric Weatherholtz: That’s good 

[00:12:20] Patrick Donley: advice about trying to find a spot that there’s just, you know, they’re super busy and they just kind of throw, you know, like, we need, you jump in and, and you just, it’s kind of trial by fire. I interviewed Sean Sweeney maybe a month ago. Would you recommend, and I think you probably know his story, he started early on as a receptionist at, I think it was a offshoot of Tramel Crow or a couple guys that broke off from Tramel Crow in San Francisco.

[00:12:43] Patrick Donley: Would you recommend something like that to a young person, like maybe taking, working for free, even with somebody that you really admire, if you’ve identified someone and just offering yourself and saying, Hey, I’m hungry. I want to learn. Is that something you think is a good idea? 

[00:12:58] Eric Weatherholtz: Yeah, I don’t think it needs to [00:13:00] be that, that certainly works.

[00:13:01] Eric Weatherholtz: I don’t know that it needs to be that draconian unless you’ve got the, you know, a lot of people don’t have the, but you still need groceries and you still need to keep the lights on and, and so I think there’s plenty of ways to get into the real estate business or really any other business. It’s sort of finding a.

[00:13:17] Eric Weatherholtz: It all works under the same guise of the old apprenticeship model. So if you can, nowadays, we call them mentors, but if you can find somebody that knows more than you do, follow them around, absorb what they know, and repeat that process. You can educate yourself quickly. But I would think there’s lots of other ways to do it.

[00:13:38] Eric Weatherholtz: You can load bar entry into the businesses through property management, and you can find a position with a competent property management company, a really large scale company, also with almost no experience as long as you’ve got the ability to work hard and you can absorb a lot of information. Being a property [00:14:00] manager for a couple of.

[00:14:02] Eric Weatherholtz: We had 

[00:14:02] Patrick Donley: talked earlier, I told you that we’ve got, most of our listeners are kind of beginning and intermediate investors, and a question we often get is, how do I go about finding someone that can mentor me? Do you have any thoughts on that? Any advice on how a young guy could approach you or somebody like you and say, can you spend some time with me?

[00:14:18] Patrick Donley: Any thoughts on the best way to do that? Because there’s good ways and bad ways to do it. 

[00:14:23] Eric Weatherholtz: I think if you have something to offer, if you’re looking for a, if you considered it as a trade, people are looking, what can you offer? Maybe you have the best thing to offer oftentimes is information and I can find you information about something that you’re interested in.

[00:14:41] Eric Weatherholtz: I can make oftentimes, if a, if a a young person can make it worth the other person’s while. In some form or fashion, that’s the best way in the door. I think most people come in asking for something with nothing in return, and it it, it’s not the best way to do [00:15:00] anything in life. 

[00:15:01] Patrick Donley: I think Sean mentioned he spent a, I think at least two years, around 2008, he had returned to Minneapolis.

[00:15:06] Patrick Donley: He spent two years just networking constantly. He had his full-time job and he said his, his second full-time job was just networking and just meeting as many people as he could. And then one piece of advice he said was, don’t be afraid to reach out. Like, check in with me. I want to hear how you’re doing.

[00:15:20] Patrick Donley: I know what’s going on in the market. Don’t be afraid to reach out and, and make a phone call and just check in. Keep me on the top of your. I listened to your interview that you did with Chris Powers, which was great. I really enjoyed that. But you had mentioned to him a project, I believe it was in Phoenix, called Tino.

[00:15:38] Patrick Donley: Tell us about Posto and the light bulb that went off for you seeing that project and went, what went on around it. 

[00:15:44] Eric Weatherholtz: I watched a property get developed from my office and the people doing it did a fantastic job. And so I kind of watched the whole thing unfold out out the office window, and one of the tenants was a [00:16:00] wine bar called Pino.

[00:16:01] Eric Weatherholtz: This is by now late 1990s, and Postino has now grown into a really terrific small company, but it was this bustling wine bar that attracted a terrific crowd, great energy, and I took note of that and just thought it was a, a fun place, and they did a great job doing it and, and redoing the rest of the.

[00:16:23] Eric Weatherholtz: And then driving around the neighborhood. I was looking for a house at the time in that specific neighborhood and pulled a flyer out of a house for sale and it said three bedrooms, two bath, walking distance to posto. And that struck me as curious that the top selling point of this house was that it was.

[00:16:43] Eric Weatherholtz: Approximate to what this other person had had built and it, and it was, you know, several walks away and it sort of hit me that what this small business did, had a high degree of influence on the value of this property, several walks away and was not [00:17:00] really capturing any of that value. But certainly influenced it.

[00:17:03] Eric Weatherholtz: And if you said that that house was something more, was more desirable because of its proximity, totino, gosh, how many other houses are more desirable? And if they’re more desirable, how much value does that equate to? And gosh, if you said there’s a thousand houses around, there’s a dense little neighborhood, and they increased in value.

[00:17:25] Eric Weatherholtz: They were pick a number, $5,000 more valuable, $50,000 more valuable because of what was going on. Times a thousand. Those numbers start to start to add up pretty incredibly. And so that was one was, wow, there’s a lot of value. And two, this guy’s getting, none of it sort of started a thought process of how can that change, is there, is there a way to sort of capture what it, what creates that catalyst and is there a way to kind of put that into a model and understand it a little better?

[00:17:56] Eric Weatherholtz: So that 

[00:17:56] Patrick Donley: leads me to my next question. At what point did you [00:18:00] focus on this kind of strategy that Healey Weatherholtz is doing, you’ve, you’ve got a unique niche. How have you carved that out? I want to hear how you found your partner Quill Healey. Talk to us about how your partnership developed and how you have carved out this unique niche of developing and taking advantage of having a posto type place, but also the surrounding development around it and, and getting that upside.

[00:18:24] Eric Weatherholtz: There’s this idea that we had, if you, we had both separately been in the business of improving properties and capturing the value that that created. Taking a property, doing a full renovation on it, and getting, you know, more higher rents work or, or raising it more desirable, repositioning it in some form or fashion and or building ground.

[00:18:50] Eric Weatherholtz: And we’d had some great success working together doing that. We had actually worked for the same company at different times, and so I knew of [00:19:00] Quill and we ended up actually having separate companies, small companies, in the same office building, and then we ended up sharing an attorney, and the attorney said, you two should meet.

[00:19:13] Eric Weatherholtz: I’m working for both of you, and you’re doing the same thing. You and you’re in the same building. You ought to get to know each. And so that was a terrific decision. One of the smart things that I. I’ve ever done is introduced myself and we hit it off and started just working on projects on a joint basis.

[00:19:29] Eric Weatherholtz: And then that led to refining that plan over decade or two and creating one of the most satisfying long-term relationships that, that I’ve had, especially in business. A couple of projects sort of. So we started to see how one thing can lead to another. And, and some of the projects that we were working on, we might, one in particular, we made some modest improvements to a portion of a, of a shopping center.

[00:19:54] Eric Weatherholtz: And that led to someone else wanting to be next to [00:20:00] the improved heart. And so then we fixed up something for them and then we can sort of piecemeal and iteratively as we went through this repositioning of this shopping center, the tendency that we attracted kept getting incrementally better and incrementally better at, incrementally better.

[00:20:15] Eric Weatherholtz: And so we saw how one thing can lead to another and be a catalyst for what was. Then the idea sort of came about that, gosh, it’s not just within this property, that it’s also what happens outside of the property, because we’d done a serviceable job fixing this place up, which made the offices around it more desirable.

[00:20:36] Eric Weatherholtz: The people that owned the hotels nearby were reaching out to us. There were, you know, high-rise apartments being built, not completely, but into some extent because of what we had. So then we started to see that one thing can lead to another, and one thing can lead to things that are outside the four walls of the property.

[00:20:56] Eric Weatherholtz: And that the real value in doing these things [00:21:00] is to the extent that you can, one, create a catalyst that has a halo effect on what’s around it, but then being able to Trent run that value creation and participate it in it in some form or fashion. And so that’s the real trick is finding places where you can instigate value creation, but then also being in the position to benefit from it.

[00:21:25] Eric Weatherholtz: I think we’ve all seen, you know, areas where the picture, some down on the luck part of town, maybe it was old warehouses or whatever, and then some ruby things have gone in and now becomes this bustling place and then all the housing gets built around it and all that. All that kind of stuff, and the offices and the hotels and all.

[00:21:43] Eric Weatherholtz: What is the catalyst that drives that understanding? What are those things that sort of start that forest fire and then secondly, being in a position to benefit from that increasing wave of desirability. And so that’s kind of what we’ve built our business on. I [00:22:00] wanted to 

[00:22:00] Patrick Donley: talk more about that, the halo effect, how you go about exactly creating these vibrant spaces.

[00:22:06] Patrick Donley: What are some of the features that you want to have in some of these develop? I was on your Twitter feed and it, they’re awesome. You know, there’s outdoor patios and taco places and places to get a cold beer. It just seems like a awesome, looking at your Twitter feed, you’re going to get hungry. You’re gonna want to go out and grab a beer and some, get some food,

[00:22:24] Patrick Donley: But talk to us a little bit about how you specifically go about creating these vibrant 

[00:22:29] Eric Weatherholtz: spaces. What we’re looking for. You know, so everything’s on a, as you think of a spectrum, all properties can be improved to some degree. And anything you do with a property has an effect on what’s around it. So if you thought about, you know, if you lived in a neighborhood and you, and you I don’t know, took your house, painted it pencil yellow and covered it in peace signs, that would have some sort of a effect on what’s around it.

[00:22:57] Eric Weatherholtz: It would change the vibe if [00:23:00] you, and it can be in other ways. If you, if you built some overscaled ugly house, it might make what’s next to it less desirable. If you did some beautiful renovation on the house, it might make the same that’s next to it, slightly more value. We look for instances where there is a very clear path to a large change in value because you can do all kinds of work and maybe have some small impact.

[00:23:28] Eric Weatherholtz: We’re looking, trying to pick out the places where if you do something, it’s going to have a much larger. There’s all kinds of ways to do this. Where we’ve sort of found the most concentrated effect is by clustering together restaurants. Maybe we’ll throw in a few shop, but if you cluster around a common green space, food and beverage, approachable, sort of fun food and beverage type uses that are active, indoor outdoor kind of spaces, that creates an [00:24:00] energy that appeals universally to people.

[00:24:03] Eric Weatherholtz: Almost everyone, you know, very few people will drive by some bustling patio that smells great with people having a good time and, and say, oh, that’s horrible. Roll up the windows. Let’s get outta here. And so it sort of becomes a draw to people and the more people come, the more you know then and have a good time, then that sort of makes that area slightly more.

[00:24:25] Eric Weatherholtz: And you have this domino effect of cascading effect of what happens around it. And so if you think about the terrific independent coffee shop, they’re really more in the, yes, they sell coffee, but they don’t forget that they’re really selling housing and, and offices and, and hotel rooms because. What the energy that’s created by those type of places make, create for a place that people want to be, where people want to be.

[00:24:51] Eric Weatherholtz: Buildings around it become more desirable. The more desirable buildings become, the more valuable they become. And if you can participate in that, it’s kind of [00:25:00] good for everybody. 

[00:25:01] Patrick Donley: Somebody posted, I, I think it was Sean Sweeney. It was a photo of, it was a French cafe, maybe in Paris. I don’t know. But it looked like you were describing, just really inviting.

[00:25:11] Patrick Donley: Yeah. You wanted to be a part. The other photo was an American drive-through, you know, Starbucks drive-through express of just like blah, homogenous suburban development. . What prevents the kind of creative developments that you are doing and are universally attractive? Why aren’t there more of them? What prevents that from happening?

[00:25:30] Patrick Donley: It just seems like a no-brainer as you’re explaining on your strategy. It just seems like this is what people want. Why do we have like Walgreens and a Dollar General and a Applebee’s right next to each? 

[00:25:42] Eric Weatherholtz: Well, there’s a financial construct that goes on and, and, and, and prevents or accelerates what, what we have and explains why we have what we have.

[00:25:51] Eric Weatherholtz: And so if you’re, if you’re a banker and real estate’s expensive, it requires a lot of capital. And if I’m gonna [00:26:00] give someone my capital, I certainly prefer to get it back, and I prefer to get back more than I’ve given you. And so then there’s this reliance on the credit worthiness of the occupant because they’re gonna pay you and your intern gonna pay me given the opportunity to Yes, people want coffee.

[00:26:18] Eric Weatherholtz: The idea of McDonald’s delivering the coffee and making certain that you’re going to get direct is far more attractive to the capital markets than the French Cafe, who is some, you know, flaky individual that may or may not ever pay you. And the building’s gonna be too expensive and for every reason, it’s less likely that I’m gonna get my money back.

[00:26:43] Eric Weatherholtz: And that’s clear thinking, and that’s right. Thinking. And that’s why we have what we have. The, what we are saying is if you widen your aperture and think of it almost as if a take on a bigger project, a bigger site, and say for example, golf courses [00:27:00] in and of themselves are kind of a lousy business, but in the right markets, selling home lots around golf courses can be a very attractive business.

[00:27:11] Eric Weatherholtz: And so the idea of of building a golf course as a means to create desirable lots around it is pattern of a development that’s been proven to work. And so we’re on a, on a different scale, but with some similarities saying be coffee shop and and the taco joint become our golf course. And then around that becomes the types of places that people might want to have their offices, or they might want to live, or they might want to.

[00:27:37] Eric Weatherholtz: And so that becomes, and the inverse is if I, if we put a mattress firm in a O’Reilly Auto Parts, maybe there’s, at least with O’Reilly, there’s a hell of a lot more credit than there is with the local taco place. But the value ends there and it can actually be a negative value on what’s around it. You, you wouldn’t find, be unusual to find a [00:28:00] flyer in someone’s house saying, walkable to O’Reilly Auto.

[00:28:04] Eric Weatherholtz: In fact, they might downplay that. So there’s sort of this negative halo that comes from some of those more formulaic type places and what’s around it in some ways can become less valuable. So those are the two differences of how we deal with. So if we look at a much larger project and say what’s going to, what’s going to make this entire area more desirable, then use that as the guide to how we develop the small pieces that become the catalyst for the large.

[00:28:38] Eric Weatherholtz: Would you 

[00:28:38] Patrick Donley: say that’s your company’s edge is that you’re willing to take on those kinds of projects that maybe other developers just aren’t interested in? You’ve got a, that niche that you know works. 

[00:28:48] Eric Weatherholtz: It seems What we specialize in is creating these small commercial nodes that I’ll call ’em, and they’re, and they can be quite small, you know, from 10,000 square feet to [00:29:00] a big one, might be 40,000 square.

[00:29:02] Eric Weatherholtz: And you can fit that, you know, onto half an acre depending on what kind of parking is required. That’s what we know how to do, is create this little bustling little place. And then what you do with that is then being able to participate with what’s around the, is the property that’s around it. And so we’re able to structure things.

[00:29:26] Eric Weatherholtz: So we have probably 16 projects in the queue right now. Some of which are with municipalities, and that’s sort of the inverse where a municipality has, they are the beneficiary of what goes, what hap of that halo effect, so they can take, make their town more differentiated. A trade for them might be, Hey, we’re gonna benefit by if you do what you, if you do what you do, we’re gonna benefit our place.

[00:29:54] Eric Weatherholtz: Is we gonna become more valuable? Our property tax roles will go up, et cetera. [00:30:00] So we’re willing to underwrite your project. We’ll give you land, we’ll build you a parking deck. We’ll help finance you buildings because we’re gonna benefit. On the other side, we’re doing things with developers, other developers who might have, you know, working with a couple of folks that are buying large office assets, want to activate ’em.

[00:30:20] Eric Weatherholtz: They have a surface parking lot and they’re saying, Hey, you know, we’ll give you this land . You do what you. It’s a limited utility to us. We’ve got bigger problems than we’ve got plenty of parking and don’t have a use for it. But you do what you do and then we’ll benefit from that halo. And then in certain instances, very select ones where we can find opportunistically, large chunks of land or property.

[00:30:44] Eric Weatherholtz: Then we’ll take on the whole process, but those are harder 

[00:30:47] Patrick Donley: to find. Would an example of that be Turner Field? You did the Atlanta Braves stadium was, that sounded like a pretty big project. Can you talk to us about that? 

[00:30:57] Eric Weatherholtz: Yeah. We teamed up with a group that [00:31:00] was able to secure that property in a public-private partnership of sorts, and the area had been through much government intervention had been pushed.

[00:31:14] Eric Weatherholtz: What was once a very vibrant area had over the decades been pushed down into a place that was down on its. It presented our group the opportunity to take a small collection of buildings. I think there it’s 30, well, almost 40,000 square feet. That was the initial catalyst, and we were able to put in 14 individual restaurants into this little walkable stretch of buildings that had been vacant for 50.

[00:31:44] Eric Weatherholtz: And by doing that, that created an energy that led in a straight line to 700 student housing beds, a hundred town homes, three over 300 unit multi-family projects, a grocery store in an [00:32:00] area that hadn’t had one in 40 years. Other shops and we’re working on additional multi-family and additional office space there.

[00:32:09] Eric Weatherholtz: So it’s a, it’s a example of how a single catalytic small scale project led to ignited rebirth of a much larger area. 

[00:32:22] Patrick Donley: So who provides the initial vision for that? Was the, the initial part of the project, the 14 or so restaurants? Is that where you start or where do you start with the project? 

[00:32:32] Eric Weatherholtz: In that case it was, and, and our team acquired the Turner Field property.

[00:32:39] Eric Weatherholtz: And then separate from that, the opportunity came up to acquire this, these adjoining buildings that had been used. The reason they were vacant is it was easier for the former owners, more lucrative for them to run out the, their parking lots or per game day parking, rather than have occupants in the building.

[00:32:59] Eric Weatherholtz: So when the [00:33:00] reason for the parking went away, so did their revenue and so did their, their building. That came up after the fact, but the idea of, hey, here’s some great bones on these buildings. It’s very rare in a major market to be able to acquire at a bargain price, three blocks of historic buildings on both sides of a, of a former shopping street that are facing each other, and then have around it the all this other potential land for development.

[00:33:30] Eric Weatherholtz: Then the idea was, well, let’s take these buildings. And we can we can go out and get sort of the best and brightest in the culinary world and create a place that is fun and bustling and vibrant, and then that will lead to these others. And it’s a great case in point in that that particular three block stretch took four years, five years of, of handwringing and agonizing and fastidious attention to the details of repositioning all those individual faces, handholding with [00:34:00] small business folks.

[00:34:01] Eric Weatherholtz: To get this thing open. An incredible amount of work went into that, but that became the launch Chadd that allowed the things of scale to happen all around it. So the, all these apartments that came out of that, all these residences, I think we’re gonna have a, we’ll get office space and we’ll get a lot of other cool things coming into this neighborhood.

[00:34:21] Eric Weatherholtz: And you can draw a line, trace it all the way back to the small little project of, of shops and restaurant. So are you partnering 

[00:34:30] Patrick Donley: then with in terms like of the student housing development or the townhome development, or you mentioned the grocery store. Are you doing that development solo or are you partnering with other development firms to do the projects at that point?

[00:34:44] Patrick Donley: In these 

[00:34:45] Eric Weatherholtz: cases, we would partner with, well, we would in, in each of those cases, we would sell the land to a third party. In some cases we would have a partnership interest in the success of, of how it went. But [00:35:00] we would either create a new entity that would develop these larger projects, or it would be an outright sale, and then we would in some form or fashion participate in with some sort of a bonus or something payment, depending on how, how they succeeded.

[00:35:15] Eric Weatherholtz: What we found is that having multiple participants makes for a better. So a lot of times when you have one entity that’s controlling a process soup to nuts, it can be a little heavy handed. And by bringing in folks that are specialists in all these other areas, you have a broader base of buy-in into these large scale projects.

[00:35:40] Eric Weatherholtz: So the, the group that we’re teamed with is, is very talented, but neither of us could ever build town homes in the way that the folks that we sold sold to have done. Our partner in it is a talented student housing developer, but, but being able to bring in a third party student housing developer [00:36:00] has been, was a great.

[00:36:02] Eric Weatherholtz: We are in the business of building and developing retail space, but being able to bring in a third party retail developer that specializes in grocery stores was a great solution for us and them. It allowed us to free up capital. It allowed them to get a project, and then we can keep pushing the whole thing forward.

[00:36:23] Eric Weatherholtz: I 

[00:36:23] Patrick Donley: wanted to ask you, what are the criteria that you are looking at when you’re evaluating a potential project in a neighborhood? When you’re looking at a neighborhood, how do you decide if it’s an area you want to invest in and start acquiring land? 

[00:36:37] Eric Weatherholtz: I think it sort of starts and stops at, we’re looking for restaurant sales and so if we can go into an area and point to two or three or four existing places that are doing good business, call it three or $4 million.

[00:36:54] Eric Weatherholtz: Then that sort of to us kind of proves out the market more than anything. And then it’s, you know, [00:37:00] if a good operator can make that kind of money there, then our businesses, then finding the good operators and, and doing, yeah, it’s kind of that symbol. It, it’s not too far off of, you know, I think Burger King’s growth strategy where for the first couple of decades was going across the street from my McDonald’s.

[00:37:16] Eric Weatherholtz: It’s a little bit tied to that kind of a. Do you prefer to 

[00:37:20] Patrick Donley: buy existing buildings that need redevelopment or would you rather do green space development, or you’re doing a mix of 

[00:37:26] Eric Weatherholtz: both? I think the mix of both is helpful. I, I think the, they both have frozen cons. Building ground up. You get to control the whole process.

[00:37:37] Eric Weatherholtz: Get new, if you will, rehabbing, there’s sometimes it can be much faster on the, at least on the entitlement side, you can, by reusing buildings of any sort. There’s a, there’s a soul that comes from a project that’s really difficult to recreate from ground up. If you reuse something, modify [00:38:00] it picks it. It has a personality to it that’s very difficult.

[00:38:04] Eric Weatherholtz: There’s an imperfect personality that’s hard to otherwise replicate. 

[00:38:09] Patrick Donley: I’d love for you to come to Columbus, Ohio. There’s a, the minor league baseball team is, was the Columbus Clippers. It’s still the Columbus Clippers, but they played in Cooper Stadium, which is just a stadium in a massive parking lot that’s overgrown and just decrepit and something needs to happen.

[00:38:24] Patrick Donley: you, you should take a look at the land and it’s, and it’s in an area that’s starting to redevelop. You know, there’s cool breweries and bars and restaurants that have, in fact, one of the restaurants I like. It was an. Ebco, I think was the Water, Cooley Water Company. They made water fountains. Yeah. Okay.

[00:38:39] Patrick Donley: Ebco is the company, I think. Gotcha. And they bought this building and it’s not like a really cool event space and restaurant. And it’s kind of an example of, of the projects you’re doing, it’s restaurants have moved in, breweries have moved in, and now it’s a cool, vibrant place that was once. Really just run down.

[00:38:56] Patrick Donley: Yeah, 

[00:38:57] Eric Weatherholtz: that’s a, that’s a, that’s a great point. If you think about [00:39:00] Eastern Town Centers, probably the best done of any Greenville development in the, in the country or it’s, it’s in the top tier, and as well as that has been executed. Comparing it to what you’re talking about, which is a much smaller scale, but there’s a certain amount of soul that’s lost in building ground up that exists.

[00:39:22] Eric Weatherholtz: I haven’t been to the place that you’re talking about, but, but I, I can only imagine that there’s a difference in energy of those two places That’s palpable. Well, 

[00:39:32] Patrick Donley: it’s similar. I live in German Village. I don’t know if you’ve ever been to German Village in Columbus, but it’s terrific. Yeah, it’s a hundred year old brick homes.

[00:39:39] Patrick Donley: You can’t recreate that. As nice as Easton is and all the brick that’s out there, you can’t create the, whatever you want to call it, the patina of a brick road and the a hundred year old brick homes that are all around German Village, it just can’t do it. 

[00:39:52] Eric Weatherholtz: We’ve found, you know, it’s a friend of mine just finished redoing his house.

[00:39:56] Eric Weatherholtz: He’s got two young girls and he was showing me around and he had [00:40:00] this kind of goofy small house and spent a fortune redoing it with a terrific architect friend. And the upstairs in the attic, they made into two separate rooms for these, for his two girls. And it’s the most magical little place. It’s sort of this cherry land of going upstairs with these tight little undersized doors leading into these big open lofted attic chases.

[00:40:25] Eric Weatherholtz: It’s really incredible and it’s something that only was possible because they were working within these existing sort of construct that they had to deal. You would never design these, you could never come up with the idea to build the space if you were starting from the ground up. Only because they had to deal with these, these kind of weird and goofy upper level ats, Jasons, where they then able to come up with the idea to create what they, what they did.

[00:40:53] Eric Weatherholtz: And the same thing happens in commercial poverty of if you take the existing buildings and say, okay, [00:41:00] how can we improve these? That’s where the good stuff comes. I just bought a 

[00:41:04] Patrick Donley: building. My wife and I, she’s a mental health therapist and she rents out individual office spaces to other therapists. So kind of like a salon loft split for therapists.

[00:41:13] Patrick Donley: Yes. . I love it. We’ve got one building she’s got, it’s a hundred percent full. She’s always having people that want more office space. So we just bought a place down here in German Village, close to me, and it was two old German Village brick homes that they somehow attached and created a one big commercial office building that was turned into like bland, awful medical space.

[00:41:36] Patrick Donley: Just like the 12 by 12 linoleum tiles that are just, you know, bad. All the brick has been covered up with dry. So we’re in the process now of just completely renovating that, taking down all the drywall. I love it. Love exposing the bricks, cleaning it up. And I love projects like that where you can bring the soul back from these Yeah, exactly.

[00:41:55] Patrick Donley: These old buildings. 

[00:41:57] Eric Weatherholtz: Yeah, it’s really hard to do otherwise, and you can [00:42:00] imagine that any building, no matter how horrible has the ability to do that. You know, when we’re doing our projects, that’s the first thing. If there’s an existing building, there is a bonus to that of like, here’s something that we can riff off of, and here’s, we can take, use this as a, as a centerpiece.

[00:42:18] Eric Weatherholtz: And maybe it’s just taking the, taking the walls off and creating a pavilion or, you know, maybe it’s taking part of the building, opening up part of the building or putting something next to it that completely changes the. Or creates a courtyard between the two and it’s, it’s those kind of things that add the energy, that create this, you know, halo effect that we’re talking about.

[00:42:38] Eric Weatherholtz: I wanted to ask you 

[00:42:39] Patrick Donley: about dinner and drinks. L L C I. I was on your website doing some research and there’s a mention of dinner and drinks l l c. I know you like to, I like you like dinner, you like drinks. Tell me about dinner and drinks. 

[00:42:50] Eric Weatherholtz: That’s a you know, investment vehicle partnership that we use to invest into actual operating companies in the [00:43:00] restaurant world.

[00:43:00] Eric Weatherholtz: So we’ve made four or five investments in that where we team up with a really terrific operator who has got everything going for ’em, but, but lacks capital. And so we’re always on the, on the lookout for those kind of people. And that’s also been, you know, a help to our real estate business is when you can understand all the difficulties that go into running the operating business that might otherwise be your tenant.

[00:43:30] Eric Weatherholtz: It gives you the ability to be a better operator on the real estate side, and it’s been very enlightening of what we thought we knew versus actually living it and understanding it and getting a better feel for it. That’s been a fun diversion horse as well. You had mentioned, 

[00:43:46] Patrick Donley: I think in the Chris Powers interview, the maybe a guy that has a restaurant that rents from you and he, I don’t know if he fell behind or you were going to offer him some leniency, maybe three months free rent or something like that.

[00:43:59] Patrick Donley: And he was like, [00:44:00] no, no, no, no. I, you know, I’ve saved up for a rainy day. I’m gonna take care of my responsibilities. Whereas like some of the bigger companies, corporate companies were not very honorable. Can you talk 

[00:44:10] Eric Weatherholtz: about that a little? I think the pandemic and the uncertainty that came from that was really amazing to watch of what happened.

[00:44:20] Eric Weatherholtz: We, we have a property that had 50 small businesses as tenants, and through that incredible rollercoaster ride of the pandemic, I don’t think that we had everybody paid their rent even. I think there was some stuff that, you know, where we worked with folks, I’m sure for a short period of time, but everybody ended up paying.

[00:44:43] Eric Weatherholtz: We were all in a way in it together, and we had another property that was the majority occupied by national brands that are disagreeable folks to deal with, to begin with, and then to have, but you only do it because of the idea that. But it’s a fan that you [00:45:00] would, no matter what, be able to collect the rent.

[00:45:02] Eric Weatherholtz: And then what we, what we found is that those were the most horrible people to deal with throughout the pandemic. I don’t think that, I thought that would be a longer lived phenomenon and it would influence, I try to hope that it would influence people’s willingness to do business with some of these companies that I don’t think you’ll, but yeah, I think the idea of these, there’s a lot of power in locally owned businesses where people are, have skin in the game that be becomes their livelihood.

[00:45:30] Eric Weatherholtz: And if you can help them survive and help them thrive it, it creates a terrific thing for community. Right. Yeah. And loyalty. Yeah. That’s right. That’s right. For sure. 

[00:45:42] Patrick Donley: Eric, tell us a little bit more about your experience 

[00:45:44] Eric Weatherholtz: at Recon. For anyone that has even on the fence, reconvene as an unbelievable venue that Moses Kagan has created and brings together a at a small scale is a terrific [00:46:00] group of interesting people that are doing really amazing things.

[00:46:05] Eric Weatherholtz: Most of them at a very young age is completely inspiring. I over that, whatever it was, three or four days. I’ve talked a couple of years worth of learning stuff into that. And so I would recommend as much as it’s possible to recommend if anybody’s on the fence about doing that, that they should absolutely do it and they should absolutely breathe it in and embrace it and get it, squeeze out every drop of nectar from it that they can’t.

[00:46:32] Eric Weatherholtz: And it was 

[00:46:33] Patrick Donley: designed for gps, LPs, little bit of, I mean, there was all kinds of people. There was Nick Huber was there, the self-storage guy. You were a guest 

[00:46:42] Eric Weatherholtz: speaker, obvious. Yeah, they, it sort of attracted this idea of, of people doing things that need capital and people that have capital looking for people doing things.

[00:46:53] Eric Weatherholtz: And the group was talented and ambitious and fun and [00:47:00] smart, and the event is put together in a way. It drops to the ground, all the normal stiffness that you might find on some sort of a, of a convention. And it’s, it’s almost like, club made up of old trends and and so it’s really terrific to, a great chance to meet people, learn and then create relationships that would go on for, for, I think, a long.

[00:47:25] Patrick Donley: Was there anyone from Reconvene that you walked away with saying, wow, they are up to some cool 

[00:47:30] Eric Weatherholtz: stuff? Plenty, plenty of ’em. You know, there’s this Kath Wooden Grant grant who’s a world-class violinist who’s also doing real estate. There’s some incredible investors there that I’ve gotten to know that have been really terrific and, and that I’ve learned a lot.

[00:47:47] Eric Weatherholtz: There are people that are doing really good things like providing affordable housing for folks that need it. It’s an incredible assortment of interesting folks in [00:48:00] a way that I’ve not experienced it before. So yeah, it’s, it’s a really terrific venue. 

[00:48:05] Patrick Donley: I wanted to touch on how you’re spending the bulk of your time right now.

[00:48:09] Eric Weatherholtz: We’ve got this idea of, of you know, creating these catalytic projects solves a couple of problems. So for the, for the typical, we, we’ve got an architect that we do a lot of work with who has sort of become known as the, the restaurant guy in Atlanta, or are one of the one. And so he said, here’s the, here’s what happens is people call me all the time and they have this idea for their restaurant.

[00:48:37] Eric Weatherholtz: And he says, great, tell me about it. And they do. And he says, okay, what’s your timing? And they say, oh, you know, if we could have the plans done, we’re in no rush. But if we could have my next week, that would be great. You know, something preposterous. And so he says, Okay, here’s the deal. You are going to pay me, you know, 40 or $50,000.

[00:48:56] Eric Weatherholtz: We’re gonna come up with a schematic set of plans, and that’s [00:49:00] probably gonna take 90 to maybe 120 days, maybe longer, depends on the back and forth that we have. We’re gonna take that and we’re gonna, we’re gonna get some buy-in from a, from a from a contractor. And that’s gonna go on for another, I don’t even know, maybe three or four months.

[00:49:17] Eric Weatherholtz: Then we’re gonna take it to the city and the city’s gonna want to have their way in, and at some point we’re gonna get permits and we’re gonna get our entitlements and we’ll go under construction, and that’ll probably take, depending on the scope, if it’s ground up or a rehab, six months to 24 months.

[00:49:34] Eric Weatherholtz: And then at that point, you’re gonna know what it costs. And now do you have 2 million to pay for this, Mr. Restaurateur? You don’t. Okay. Well, do you have a home? Because the bank’s gonna want Diana’s collateral. Oh, you don’t have a home? Well, does your mom have a home? Okay, well, they’ll take that. She’s gonna need to pledge it.

[00:49:52] Eric Weatherholtz: But if you don’t pay us on time, we’re gonna take that. Are you ready to get started? It’s a daunting exercise that [00:50:00] the independent restaurateur needs to go through, and part of what we’re solving for in a backended way is we’re sleuthing that process and saying, Hey, we’ve got cool space and you can be open on Thursday.

[00:50:11] Eric Weatherholtz: I’m exaggerating, but not that much. And then we’ll listen. Then the other thing that we’re solving for, which is the bigger thing, is property owners, and that can be ourselves, need more than anything, want desirability. And if you own properties, you want it to be desirable. That’s where all the money is.

[00:50:31] Eric Weatherholtz: You want value, it’s the more desirable it is, the more value it is. So by taking, by solving the problem for these independent restaurateurs, we also solve the problem for a lot of communities that might be stuck with the mattress firm, dollar General sort of thing that you are alluding to. Giving them this place that they can, you know, gather as a community.

[00:50:52] Eric Weatherholtz: And by doing that, that creates this desire of building for the surrounding real. We’re sort of getting into that, helping create [00:51:00] that ecosystem for all the market participants and then we out the value in the delta of what it was before to what it can be when it’s sort of fully realized. 

[00:51:12] Patrick Donley: I feel like I could go on for about another hour asking you quite a bit about all this, but I want to make sure, I know you’ve got a busy day here, so we’re gonna wrap it up here, but I don’t think I’ve done justice to really explain how beautiful your projects are.

[00:51:26] Patrick Donley: I really encourage our listeners to go onto your website and look at some of these case studies that you’ve got listed. They’re beautiful and really projects. I would be very proud to have been the developer on. 

[00:51:39] Eric Weatherholtz: Very kind. Thank you so much. 

[00:51:40] Patrick Donley: Yeah, thank you, Eric, for your time today. How could listeners reach out and get in touch with you or learn more about you?

[00:51:47] Eric Weatherholtz: You can go to our website, hwproperties.com you can hit me up through there on the email. You can do it on Twitter, at io, non-recourse, all of those. I love meeting  folks and spread the word. 

[00:52:02] Patrick Donley: Thanks so much for being with us today, Eric. 

[00:52:04] Eric Weatherholtz: Okay, man. Thank you. 

[00:52:06] Patrick Donley: Okay folks, that’s all I had for today’s episode. I hope you enjoyed the show and I’ll see you back here real soon.

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