Attorneys are Human Too, a Podcast

Episode 12-Commercial Real Estate in a Post-COVID World

September 02, 2020 Dan Lewkowicz Season 1 Episode 12
Attorneys are Human Too, a Podcast
Episode 12-Commercial Real Estate in a Post-COVID World
Chapters
Attorneys are Human Too, a Podcast
Episode 12-Commercial Real Estate in a Post-COVID World
Sep 02, 2020 Season 1 Episode 12
Dan Lewkowicz

Join Host Attorney Steve Wallace and Co-Host Celena Muzic both of The Wallace Law Group, PL as they have the privilege of having Investment Sales Broker Dan Lewkowicz, Senior Advisor with Fortis Net Lease.

Topics Include:

The Amazon Effect
Downtown Detroit Renaissance
Redevelopment of Aging Enclosed Shopping Malls
Retail Outlook Post-Pandemic
What is an Investment Sales Broker?
Industrial Real Estate and Logistical Repurposing
Pop Culture Banter
Lightning Round

Show Notes Transcript

Join Host Attorney Steve Wallace and Co-Host Celena Muzic both of The Wallace Law Group, PL as they have the privilege of having Investment Sales Broker Dan Lewkowicz, Senior Advisor with Fortis Net Lease.

Topics Include:

The Amazon Effect
Downtown Detroit Renaissance
Redevelopment of Aging Enclosed Shopping Malls
Retail Outlook Post-Pandemic
What is an Investment Sales Broker?
Industrial Real Estate and Logistical Repurposing
Pop Culture Banter
Lightning Round

Steve Wallace:

hi Dan. Hey, how you doing? Thanks for having me on the show. Appreciate it. Today's topic is commercial real estate in a post COVID world. We're going to talk about a lot of great things today. So I guess the way to get started is if you could just introduce yourself to our audience, Dan.

Dan Lewkowicz:

Sure. Yeah. So my name is Dan liquids. It's, I'm a commercial real estate investment sales broker. I specialize in investment sales. What that means is that I sell assets that are typically cash flowing. Typically they have a guarantee from a large national tenant. Most of the time they're single tenant freestanding buildings, but I do often sell shopping centers as well. That's something that is, has changed and will continue to change in the post code. My business was a quieter based on shopping centers, pre COVID. And now it's quite a bit busy based on a single tenant medical office, automotive essential retailers. If you will, a little bit about my background, I ran a sales department for a title insurance company. For a number of years. I have a background actually in nonprofit fundraising. I was the development director for the largest Jewish day school here in Michigan. And I'm at a company called Renaissance real estate ventures, which specialized in the acquisition financing renovation and resale of single family, residential property. At first, we were in Oakland County and the surrounding counties of Detroit. And then with this Renaissance in Detroit, we renamed the company and moved everything into the city of Detroit. A lot of fun. There are a lot of cool experiences, a lot of fun stories. And most recently I was a business development executive at Amazon in Detroit as well. And throughout all that time, I'd been doing my own, you know, real estate investment and house flipping on the side and, and basically we made a transition here, from the house flipping into, and from Amazon into commercial brokerage. And I became a full time broker and just love every minute of it.

Steve Wallace:

Fabulous. I've seen you have quite an online presence. Dan and I met, through LinkedIn, we're currently going through a LinkedIn challenge. And one thing that. I really kind of developed during the COVID, lockdown is we started this podcast. we also started a YouTube channel and we've really, at least I've been really stepping up my game Selena as a great social media game as it is, but I've stepped it up. I'm a gen exer, but I'm not afraid of social media. I actually enjoy awesome. He's a gen exer stepping into the millennial world. That's true. I think I may be doing the opposite. Okay, so you kind of provided us a lot of great nuggets to discuss in your introduction. So I guess the first question is one of the things that a lot of people are saying, and this was even before post COVID is the Amazon effect. You are kind of inside the hallowed halls of Amazon. And can you just do the best that you can, the way you're legally allowed to do? So if you could just kind of give us your thoughts on the Amazon effect.

Dan Lewkowicz:

Yeah, that's a great question. It's something I love talking about pre COVID and something that's even more interesting during the pandemic and in this post coven world. So Amazon, as everyone knows, I mean, it's probably the most ubiquitous company in the world. if you look their stock price over time, I remember when I was with the company back in 2016, they were trading at about 800 bucks a share, And a year ago they were probably around $1,600 right now. They're just, you know, flying high. So pretend, yeah. You know, what we saw was that as a net lease broker, and as, as an at least brokerage we were seeing is that the investor sentiment was to move away from typically, typically from your traditional bricks and mortar retail, more into these Amazon proof or Amazon resistant or e-commerce resistant tenants, like your dollar stores, your dollar generals. Like your automotive supply companies, like your tire stores, like your medical office buildings, even things like Ted hotels, like PetSmart or, or a pet hotel where, you know, people literally take their animal to a, to board it. And even into what we call experiential retail, which is a type of retail product, like a trampoline park, or maybe a topic golf where the customer goes there and buy something. But they also experienced something what's a unique about all of these assets I mentioned is that. These are all things you can't do online and you can't have your dog, you know, baits are groomed or boarded on Amazon. You can't get your medical treatment on Amazon. You can't jump on your trampoline or swing your golf club on Amazon, you know, yet. so those were all asset classes that were very popular and we saw a big shift in the retail space all the way up from the real estate investment trust. Down to your right, you know, your, your small time invest in buyer, you know, five or 10, net lease properties type of person. And we really saw that accelerate over the last few years. What's interesting is that when COBIT hit, obviously we saw shutdowns all across the country, state by state, by state, and it was really incredible to watch. myself personally, I had to deal here in Michigan. My buyer was from California. It was a six tenant. A multitenant center in, in West Michigan and the grand Rapids area, which is a market that's really hot. I love the market over there. By the time he closed at the end of March six out of six tenants were totally close down. So what really happens even as a great question, what really happened is that post COVID or even now during the pandemic, these places like the gyms and like the ax throwing and like the trampoline parks. All of those things were closed and then many of them are still are closed. So all this money and all this interest that was funneling away from your traditional brick and mortar retail into experiential retail, it's now swung back and it's kind of wavering. We're not really sure where it's going. I have some ideas, but Amazon really disrupted that whole segment. And then it got really disrupted. If you will buy a COVID. And now what's going on is you see that, that, that the Amazon effect is just speeding up something that we were watching for a number of years, which is the dearth of brick and mortar retail, specifically the depth, if you will, a big box retail, you know, your 30, 40,000 square foot plus boxes are just not being built, not being opened. And if anything's going on with them, they're being cut up into smaller boxes.

Steve Wallace:

Yeah. Time other in law works at JC Penney's. So I experienced that on a date daily basis and there's a mall that's right near our office. It's called the Boynton beach mall and it's a C class mall and they have very broad redevelopment plan. So like one of the things we're seeing a lot of here. Is kind of infill redevelopment of some very enclosed malls. And I'm just curious what you're seeing in the market.

Dan Lewkowicz:

So it's funny that you bring up JC penny. I'm not sure if you're aware, but, you know, Simon is one of the largest mall operators in the country. I don't know if you heard, they are in talks right now, in terms of what they're going to do with JC penny. Have you heard about what the latest ideas I have not heard the latest? No. If you could. Amazon fulfillment centers. Wow. Really makes sense. No kidding. AMA Simon stock actually jumped back up about 10 days ago when they, I made an announcement that they're trying to work something out where they would actually house the fulfillment centers in the vacant JC Penney's in the malls, which is kind of an incredible idea because malls, as you know, are almost always. Strategically located on major arterial, you know, a freeway networks, which is really where that's the next step in Amazon fulfillment centers, you know, getting away from the, the major, if you will, the, the industrial areas of the areas near the airports, you know, over here in Michigan, we've got like Romulus or we've got over on the East side, we've got in Detroit. Now they're going to be in the places like, you know, JC Penney and in different malls. interestingly enough, over here in Michigan as well, the state fairgrounds, which I can remember as a kid going to, you know, with my father, it's been vacant for a number of decades. It was actually, there's a big development there that was done probably about 10 years ago, magic Johnson and a group of other investors spent about 138 million redevelopment redeveloped part of the state fairgrounds. Put a big, big Meyer, a nice big shopping area. It's right in the edge of Detroit and some of the other suburbs. And just last week, actually the Sterling group, and I believe Ross pro juniors company purchased from Wayne County, the entire rest of the state fairgrounds, and the first tenant that they're putting in there. Amazon fulfillment center. Wow. It just makes,

Celena Muzic:

it just makes sense. Do you think that this is, I guess, covert pushed, but I call it the death of moles just because at least I know a ton of people like myself or maybe in my age group, but I don't go to the mall. I hate it. I hate it.

Dan Lewkowicz:

That's a really interesting question. And I think that the answer is a little bit more complicated than that because what really, what people don't realize is that. Back in the neck. I think it was the sixties and seventies. The government was really subsidizing developers to build malls and kind of invigorating. and I wouldn't say accelerate is a better word, urban sprawl. So there was a ton of money put into mall development all over the country and really over the last several decades, we've kind of just been overbuilding malls. So pre-Amazon effect indefinitely we were seeing abundance of malls and many of them were closed and you have these huge malls where the main anchor and tenant, which could be maybe 20% of the GLA the grossly skull area in the building is just dark. And now with the Amazon effect in COVID and all of that. You've already got a problem that was created in the sixties and seventies. It was just pushed and pushed and pushed and pushed. And then you have Amazon coming in and then you had people kind of moving away from those areas and then you had the pandemic and now it's like, yeah, we'll see. Now what's happening. The fulfillment centers are growing in the malls. Yeah, it makes sense. And most millennials order everything online, an experiential component, though, I will say that you can't get online. So what we're also noticing over the last several years is a lot of major mall. Developers are turning towards an experiential mall concept where you go to the mall. If you look like here's a great example, the same, mall of America, of the Saint, the mall of America owners built what's called, gosh, the name's escaping me American dream. American dream is a huge mall in New Jersey. If you ever drive by it on the turnpike, it's like mind boggling. You see this huge mall and you see this insane structure. That's slopes upwards. It's actually a ski Hill inside the mall. So that's an experiential mall concept. That's been pushed over the last few years. Interestingly enough, not a lot of people know this, but because the same owner owns American dream and mall of America. They have cross-collateralized as far as I understand, they've cross-collateralized those two assets. Right? You see where I'm going with this? And American dream was scheduled to open. I think my bones are chilling right now scheduled to open like mid-March.

Steve Wallace:

Oh, wow. Wow. Yeah, the huge, they approved a huge development. That's supposed to be bigger than the mall of America. West Miami day, Northwest Miami Dade. It's like a huge project. And since COVID there hasn't been any mention of it, I grew up in Syracuse and upstate New York. And so we have a huge mall. Also. It's called destiny USA. And that's another one where I went to visit it a couple of years ago when I went back to Syracuse and they have like this, like a ropes course inside there, they have like waterslides. I mean, so, so I did see that that's kind of the shift and. Correct.

Celena Muzic:

And in Aventura they have this giant, I mean, it's really the only reason I, I go that and restaurants. but, they have this huge slide. and, and it's awesome. And I think to be perfectly honest, ever since they put in the slide, I, I think that's more, it's more. Have a reason for my nephews to want me to take them before they were like, we don't want to go to the mall.

Dan Lewkowicz:

Yeah. And you know, what I'll tell you is that the bottom line is, is there's a lot of there's a lot going on right now without even getting into the politics. So without even getting into the science, it's a lot going on in the world right now. The one thing I do know for sure, at least that I have strong feeling is that as humans, we're very social. Beings. And as much as we try to, as much as right now, we're being pushed to do this behind our zoom cameras and to work, you know, from our basements or our, our studies or our kids' rooms or this or that at the end of the day, human beings do crave social interaction. And that's not really something that we can get completely to the same extent on LinkedIn and that void can't be filled by impulse purchasing or one, one click buying on Amazon. So at the end of the day, I do believe that experiential retail is a saving grace that will help retail. Survive as long or as best as it can in this country.

Steve Wallace:

I believe restaurants as well, even though people are a little apprehensive, go to restaurants, people love going out to eat.

Dan Lewkowicz:

And then you're seeing post about the small format. It's an, it's incredible what's going on in the restaurant space in terms of contactless options. And again, that's also something that interestingly enough, Steven was, was in plate pre pandemic. All of the major chains, not just in the QSR, quick service restaurant, but even pharmacy like Walgreens, Walgreens has a new format. They've got two one's called the Cooper concept. And the other one, I don't know if it's a micro pharmacy or something. We're talking like 2,500 square foot Walgreens, same thing, taco bell, as I posted and said, Hey, they've got, they went from, I think like a 25 or 2,700 square foot format to a 1,350 foot square format. That's all that was all in play pre COVID and now it's just being accelerated, which to me is like, I mean, I've got a lot of questions, you know what I'm saying? But at the same time, it's fascinating that all these things that were in motion are really being pushed on hyperdrive to the finish line right now, because of what's going on in the world.

Steve Wallace:

I have a lot of questions about taco bell, but not necessarily real estate aspect of it. We want to know, is that really me? It could be beyond me. I don't know. Yeah. So if you could elaborate a little bit, you were, you were touching upon the shift in the restaurant industry.

Dan Lewkowicz:

Well, I mean, specifically in quick service or in general, or just an, it just a general question you could go to, you could start with quick service and then maybe go into a little bit more of a broad analysis. So it's interesting. I actually serendipitously had an interaction with someone who works for one of the major pizza chains over the weekend. And we had a conversation. He told me I can't really repeat too much, at least not in his name, but, there's so much that's been going on again. It's been going on for a decade now it's in hyperdrive in terms of, artificial intelligence in terms of autonomous vehicles, in terms of, of, of smartphone usage and delivery that is integrating into quick service restaurant. You know, many of the national chains are doing what I think to be in my humble opinion, a mistake, which is they're getting in bed with these aggregators. So they're getting in bed with the door dashes. They're getting in bed with Uber eats, which is fascinating because these are companies that. By and large quality control and standardization of processes. That's what they live by. And then they're just. Shipping it out to another company to take care of all the rest of the delivery and the fulfillment of the order, if you will, now I'm speaking like an Amazonian. So perfect in that regard, a lot of the chains are doing that, but some of them are saying, no, we want to keep everything in house. There's a very specific pizza chain that does this. They own their entire logistics and supply chain. You know, you can literally order on your phone. I'm not going to say who you can order on your phone. and they, they even have autonomous vehicles that can stock 50 pizzas taking the pizzas and delivering them to your house. So QSR is kind of bifurcated right now. Many of the companies are saying, well, people want to sit at home on their computers, on their phones in order to do our door dash and other companies are saying, wait a minute. Hey, we don't want to give up control, control B. We don't want to give up that potential revenue and, and see, you know, we don't believe that that, you know, as a company, it's in our best interest to go with these aggregators.

Steve Wallace:

So, but they're expensive. And, and from what I understand, my, my conversations with, we have a bunch of clients that are kind of mom and pop type of restaurants, and they're really diving into the revenue.

Dan Lewkowicz:

For sure. And that's why that's another reason. It doesn't necessarily make sense. Now what's going on in the actual restaurant itself is even more fascinating because you've got this whole idea of, of a, of a frictionless experience, a better customer experience, decreased timing in the drive through from the time that a person pulls in the time that they come out, that our traffic flows. Incidentally certain cities, pre pandemic were outlining the construction of drive-thrus because they thought that it was bad for, for traffic bad for the bike lanes, bad for pedestrians today. We're seeing exactly the opposite. I don't have to tell you, I mean, you've got whole parts of Miami where they're closing off the streets so that people can eat dinner outside and same thing here in Michigan, which is cool. We'll see how it lasts when the weather changes. But, which is what's interesting is that the quick service restaurant and experience is becoming much quicker. It's becoming much less. interdependent with the actual restaurant. Now you can order on your phone, pull into the drive, through, grab your stuff and go, you know, so there's a lot that's changing. And I think this whole idea of contact list experiences is going to be pushed quite far. It's going to be quite interesting to see, you know, I predicted in the next few years, you can go to your, Sonic or your McDonald's or whatever you pull up, just like you're pulling up at a bank. You know, you, you order ahead and then, you know, the, the happy meal or whatever comes down in the little tube, you take it out. You drive away, no contact whatsoever with anybody. Further look at Sonic. I posted yesterday. Sonic has a new concept. They just rolled out. I think they have one built in South Carolina. If I'm not mistaken where they have yard games and they have outdoor seating areas again, what are they trying to do? Steven experientials quick service restaurant, same thing. They don't want you to be able to sit home and get door dash. They want you to come there to buy more and to have that experience very exciting times and quick service restaurant.

Celena Muzic:

It is. Do you find that it's cutting into employment opportunities downfall with that as well?

Dan Lewkowicz:

I disagree there's there is a perceived downfall. Now this is a whole nother issue. There's a whole nother topic we could talk about, but if you look at artificial intelligence, I personally believe that with AI, the prolification proliferation of AI, I see a decrease in the number of jobs. However, if you look historically over the last several hundred years, the more advanced we get as a toolmaking society, which is really what, in my opinion, humans are best designed to make tools, right? If you look at other species, they can travel more efficiently than us. They can move more efficiently than us, but if you put a human being on a bicycle, We outperform any animal. Right. And that's an interesting analogy. So what I think is going to happen is you are going to see that a lot of jobs are gonna be lost by it by automation and by artificial intelligence, but at the end of the day, because we're going to know, be able to produce more per human. So to speak, there really will be in my opinion, less of a need to work. And again, that's a whole nother direction. We can go into it. You've experienced that in your hometown, in your home state, in Michigan with the auto, is that automated. And I don't know if you've heard, heard, but, you know, the train station, the old train station that was purchased by one of the major auto companies a couple of years ago, I said, let's buy real estate along Michigan Avenue in that part of the tricks, it's going to boom. And I said, it's only a matter of time between before they build up, build up like a mass transit between downtown Detroit and Ann Arbor. Sorry, downtown Detroit in Dearborn. Where the other part of, of, of, of the headquarters is, and just, I think it was last week or the week before, there was an announcement that the first autonomous freeway in the country is being built in Detroit, Michigan from the train station all the way to Ann Arbor. So for sure, it's going to be, it's amazing. It's exciting.

Steve Wallace:

Wow. Interesting. So I guess our next question would be, so you, mentioned that you are an investment sales broker, cause you tell our listeners what that is. And you know, we, we have a lot of folks that are interested real estate investors or interested in real estate and kids. And just my follow up question to that would be how does one become that?

Dan Lewkowicz:

Oh, great. Good. I love that. A great question. So yeah, the first part of the answer to part a of your question, what is an investment sales broker? The answer is that specifically a broker who deals with cash flowing investments that are purchased by someone who merely is buying the cash flow. So if I were to sell either a view, let's say a Walgreens or a McDonald's, you're not really buying it for the appreciation. You're not really buying it because you think it's beautiful architecture. You're not buying it because you want to put another tenant in there. You're buying it because you believe in McDonald's or you believe in Walgreens, or you believe in Amazon, whoever's renting the property and you're buying it. You're essentially buying a bond. You're buying the lease guarantee and you're buying the subsequent cash flow that comes in your mailbox every month or in your, your ACH into your checking account every month. And even more specifically, the vast majority of our sales are actually what we call absolute triple net. Properties, which means that you, as the landlord have zero landlord responsibilities, tenant pays for taxes. Tenant pays for insurance tenant pays for common area maintenance tenant pays for the roof, the structure, landscaping, the snow, everything right. True mailbox, money apps, the most passive form of real estate event. That's it, there is plenty on this show, right? And, and the returns are going to be lower than let's say a multifamily complex in the city of Detroit where, you know, somebody might get a 15, 20, 25% return on their investment. Here. You might be in the five, six, seven, eight, 9% return. But you've got annual escalations built into your lease sometimes as much as 3% annually, which really compounds over time. And you've got an as passive of an investment as possible. So that's, that's what an investment sales broker does. So we we've helped facilitate whether it's through private investors or real estate investment, trust funds, family offices. We facilitate the buying and selling many times off market of those types of assets. We like good deals on this show. All set. Well, we should talk and then we should talk offline. Okay. We like all money deals, right? Exactly. The answer to part a of your question, part B, how does one become an investment sales broker? Well, what's interesting is, is that the license to be in investment sales? I should say real estate salesperson, because that's the technical title is the same as becoming a residential agent. So if you have your residential license or if you're interested in getting it. The process is exactly the same. You hang your license under a broker and you get to work. I'm in trouble. The actual process, it's not rocket science. It's a lot of database thing. It's a lot of research. It's a lot of demographic study and it's a lot of cold calling. You know, I typically make about a thousand calls a month, so about 250 calls a week just to drum up new business. And then it's learning the industry and studying the industry. And I really, I love it. I think it's something that pretty much anyone can do from pretty much anywhere. I typically don't meet my clients. I don't go to my buildings. I don't meet my sellers and I don't attend the closings. Everything is done remotely, which is quite incredible. Sounds great to me. Yeah, that's right. That's right.

Celena Muzic:

So can I ask you okay. Because we meet, we meet realtors all the time. and a lot of them tend to tell us that they're struggling in the business because it's not an easy business. I always tell Steven, I feel like they don't know where to start. Like where to start people typically come to our office and say, yeah, well, I just got my real estate license and I want to go off into selling million dollar deals. Right. So what would you tell someone who is of that mentality?

Dan Lewkowicz:

Find a mentor, plain and simple, find a mentor and do everything they tell you. At whatever cost it is because why reinvent the wheel? This is, this is pretty much a textbook game, right? I mean, obviously you have to, you have to be charismatic. You have to know how to negotiate deals, but in general, if you find a mentor who's willing to give you the time and attention. Cleave to them, do whatever they say. And after a year or two, if you're not making a good income, you're doing something wrong. It's not a hard profession. It's not, you don't need to be a genius. You don't need to have any money. I mean, yes, there are some small expenses, but the number one thing I would say is don't expect to become a millionaire overnight and don't do it alone.

Steve Wallace:

Some advice that your mentor gave you when you were first starting.

Dan Lewkowicz:

well, I a couple of things. Number one, he said don't ever talk to anybody about your deals. Even if they're in the office, even if they're a colleague don't ever talk to anybody, because when people hear too much about their deal, your deals, they want to get involved. He also told me, whenever you do make a deal with someone like a working arrangement, always make sure it's fair, because even if you think you're getting the better part of the deal, people always know when they're being taken advantage of. I thought that was interesting advice. And then this is kind of a technical piece of advice for my profession. And I think any investment sales broker out there will appreciate this. he actually told me that, what he learned from his mentor 20 years ago was that if you want to figure out how much money you need to make in a given year, Take that number. So let's say you want to make $300,000 in a year. Take that number divided into three. So put into three buckets, a hundred, a hundred, a hundred. What you need is you need a hundred thousand dollars of proposals. So $100,000 of proposals you've given out to owners saying, this is what your building's worth consider listing with me a hundred thousand dollars of listings. So here's the thing, a hundred thousand dollars of listings. And by the way, I mean, Commission coming from those deals. So a hundred thousand dollars of commission that would come from the proposals. You have out a hundred thousand dollars of commission that would come from the listings that you have on the market and a hundred thousand dollars of commission that would come from all the deals you have in escrow. And as you move through that process, don't think, Oh, I've got $200,000 in escrow. I'm going to focus on that. No, no, no, no. Always build that pipeline because you're always going from bucket to bucket to bucket. Right. Bucket to bucket, to bucket. And that's been great advice. I think that's, that is probably the best piece of advice I've received in the industry.

Steve Wallace:

W one of the things we also handle in our office is bankruptcy. And so unfortunately we have a lot of bankruptcies that we've had done for folks in the real estate business, whether it's a real estate investor, a real estate developer, and we've had our share of brokers and. The one thing that I always tell them is a lot of brokers that we know cause it's Miami and everything's flashy. It's a little different than the Midwest. A lot of brokers, their money is spent as soon as that contract is signed. And so they need to be conservative with their finances a hundred percent. And those they're repeat clients for us. Yeah. They live in Logan too.

Dan Lewkowicz:

You have to, you know, pretty much every real estate investment sales broker is a 10 99 employee. So I don't have a pension plan. I don't have an employer sponsored 401k. But, you know, thankfully I've learned that you have to earmark a certain amount of every check a for retirement and B for expenses, because just cause I close a deal today, doesn't I might not close another one for six months and I'm going to have expenses, whether it's drone, photographs, marketing, material, paying an assistant or an admin databasing CRM, this subscription, that subscription. So you always have to put money away from your commission, into your retirement and then also into your, your future expenses for your business.

Steve Wallace:

One of the other things that I know one of the other asset classes that I know you have a lot of experience, but we've talked a lot about retail and restaurants, but one of the hottest asset classes that I see right now, and I predict, you know, for the next five years is the industrial slash warehouse class. Could you tell us a little bit about that?

Dan Lewkowicz:

Yeah. I mean, again, industrial was super underrated, but also super hot free pandemic. if you look back, last summer, I believe it was around this time last year, Blackstone, which I'm sure everyone who's listening has heard of Blackstone purchased an industrial only portfolio. If my memory serves me, correct, it was. 19.6 or 19.7, $7 billion. And by the way, when you're talking about billions, the number after the point is actually signified. So it was either 19.6 or $19.7 billion, largest portfolio in history of industrial only assets. And it was a lot of, it was cold storage, which is used for like grocery. and a lot of it was last mile fulfillment. Which as you can imagine is always in irreplaceable real estate because it's the last mile before the product is delivered. So I like to say that if you want to study a trend in real estate, always look at what the big money is doing, because what the big money is doing is what the small money is going to be doing and what the rest of the market is going to do over time. So interestingly enough, they actually chopped up that portfolio pre-closing and piece it off a little bit and then kept what they wanted and made a ton of money. so I, I saw this happening last year and I said, gosh, it's the time to pivot into the industrial space. And I started getting interested, more interested in FedEx is, and your FedEx express, FedEx grounds, your Amazon fulfillment centers, your DHLs, things like that. cause as I've mentioned, products are coming off of shelves and they're going into warehouses more so than any time in history. So I think that, We'd be myopic to think that what we see right now in terms of the boom in, in, in, in industry space and then fulfillment in cold storage and last mile, last mile fulfillment. Is is it, I mean, this is just the beginning. There's a tidal wave coming, whether it's repurposing and repositioning, JC Penney's and malls, or, you know, old toys R us, or it's building ground up all over at the state fairgrounds or right outside of major airports. it's, it's happening. I'm dealing with the deal right now. Actually it's in your neck of the woods. I can't say where, but it's outside of a major airport. And, it's a development deal to put an Amazon fulfillment center. There, you take that dirt and you put a warehouse, which by the way, warehouses are relatively cheap to construct and relatively simple and have relatively small turnover costs compared to cutting up a box. Unless you're talking about like cold storage, but you put a tenant in there, like an Amazon or a FedEx and your cap rate, your capitalization rate, which is which in turn is a factor of your net operating income and your sale price. So the lower, the cap rate, the higher the sale price goes, the cap rate goes way down. The sales base goes way up and you know, these developers who are turning dirt into fulfillment centers, they're just, I mean, that's, that's like turning dirt into gold. Okay, great. Well, we're gonna, we're going to pivot a little bit and we're going to start shifting to pop culture. Selena. You want to start our pop culture inquiry of Dan?

Celena Muzic:

Oh yes, I actually do. Okay. I have this one question. When you were a teenager, who was your celebrity crush and who is it now?

Dan Lewkowicz:

Oh, no, for sure. For sure. Without thinking. Definitely Topanga from boy meets world. Like no question. Oh my God. And who it is now. I don't know he's in the other room. I mean, it could still be to Pango.

Celena Muzic:

I actually met her once in New York city in Soho. She looked just like in the show and it was a wow. He was leaving.

Dan Lewkowicz:

I don't know. I mean, you guys that really caught me off guard. That's what we like to do on attorneys are human too. I guess so now you're showing that brokers are human cause we blushed like crazy. No, it's a great question. That's a great question. Can I take a pass on that one?

Celena Muzic:

You can take a pass if you, if you think of something, let us know. Okay. So here's my, here's my other question. It's a very random one. If you have to go live on an Island, what tool. Would you bring with you that was absolutely necessary for your survival?

Dan Lewkowicz:

My smartphone, because I could get anything. I wanted just a smartphone. Yeah. Well you gave me one tool, right? Yeah. But you're on an Island. That's I'm sure Uber's going to have helicopters. Right. Okay. Okay. Okay. Stephen, do you have any,

Steve Wallace:

I do, I do first question, which is kind of pop culture, but slightly political and it involves Amazon, the Amazon effect. Right? Should we save the post office and why or why not?

Dan Lewkowicz:

Oh, I don't know. That's a tough question. I mean, that's a really tough question. Yeah. I mean, here's the thing. I good job. So we want to save the, we want to save the post. Yeah. The thing is those, I firmly believe that Amazon is on a quest to put out, put companies like FedEx and ups out of business. I mean, and proven by the fact that they've. You know, their investment in autonomous vehicles is huge. They're going to have autonomous semis driving. They already have their own logistics. So I don't, I don't, I mean, I hate to say this, but I don't necessarily see a need in the future. Let's say five years down the road, down the line for a ups or FedEx or USP S and an Amazon, I think there's going to be consolidation. So I would say, yeah, I haven't have Amazon buy by the post office. That's the answer. Okay, I'm going to ask you one more and then I'll do the lightning round. Cause I haven't done the lightning round in a couple episodes and our lightning round is going to be all Detroit for you. Alright. So my last question is who is the goat? Michael Jordan or LeBron James. And why? Oh, the goat the greatest of all time. Yup. Oh, I was for sure. Michael Jordan, no question about it. I'm in the middle of watching the last dance. I mean, actually I don't even, I don't binge watch it. I will only watch one episode at a time cause it is so good. I want to savor it. And the best thing about it is watching the bad boys. That's I just, I love it. And watching the NBA of that generation is not like nothing will ever see again. And Michael Jordan was a statesman. Michael Jordan was a charismatic, caring individual. Michael Jordan was someone who just, he saw challenge and he didn't care. I mean, you got games where the bulls were down by double digits and he just said, I forgot this. I'm stepping it up. And then you have, you know, I think one of the greatest moments I've seen in Michael Jordan in this series that I'm watching is when Phil Jackson told him, Michael, you got to start hitting packs and you gotta start getting the ball out there. You gotta bring the whole team in. Cause everyone was saying, Michael is the greatest score of all time. Michael is a performer. Michael doesn't win championships like magic or Larry and Michael totally changed his game because Phil Jackson told him to, and that was in the, in the vernacular. For sure. And I mean, I don't, Michael, another thing is with the exception, the wizards with which, you know, by the way that I love the fact that he played for the wizards. Cause I saw him play one time in my life. And that's when he came out of retirement type of the wizards, but he wouldn't even breathe without Phil Jackson. I mean the level of commitment that that man had to his team and to his coach was uncanny, uncanny. It was unbelievable. Well, that's an excellent one.

Steve Wallace:

I'm going to ask one more question. Yeah. So what show are you? What show during a COVID where you binge watching?

Dan Lewkowicz:

Oh, what show was that? Binge-watching Oh gosh, what was it? There were a few. I don't remember. There was one that was really, really good. Oh, it's not your thing. That was the most perfectly timed release of a documentary Everett.

Steve Wallace:

Okay, so I'm gonna have one follow up question then we'll go to the lighting round. Do you think that Carol,

Dan Lewkowicz:

for sure you didn't even have to ask to ask them. You said that with absolute certainty, she didn't know where the bones are buried.

Celena Muzic:

Was there. I saw her. Okay. So now we're going to go to the lightning round. It's this or that? Wait, wait, wait, wait. Before the lightning round. I do want to know this just because I was watching Jumanji and then I watched fast material. Okay. I'm a car guy. So who do you like better? Dwayne, the rock Johnson or VIN diesel.

Dan Lewkowicz:

I mean, I fast and the furious was just, that was a game changing movie. I loved that thought involved in that movie at all, though. The one thing I'll tell you though, is that somebody from Detroit as a guy, I'm a big time car boss, but one thing I don't like about fast and furious. Is there so many cars today that are literally, they cost five or 10 times as much money as they would have had the fast and furious snapping produced. That's true interest like a Toyota supra, for example, but you can think of that, but,

Celena Muzic:

but what about, I mean, I'm comparing him to Dwayne Johnson, like the rock. And they, they shared the screen together. So you didn't have the Dan. Oh, who do I like better? I mean, I like them. The truth is I never saw Jumanji, but I mean, no, I don't know what I know too.

Dan Lewkowicz:

Like the rocker VIN diesel better. Oh, okay. Well, I happen to really like VIN diesel. I just, he's got this. He's got this. His voice is fricking so cool. I love it. Okay, boy, his, his performance in boiler room brought a tear to my eye. That was a good movie. Yeah.

Steve Wallace:

Okay. So now, now it's it's it's lightning round time. Detroit style. First question, Isaiah Thomas or Dennis Rodman? Definitely Isaiah. Okay. M and M or James Brown. M and M come on. Detroit deep dish pizza or Chicago deep dish pizza, Chicago. Ooh, I'm honest. Okay. Detroit Redwings or Detroit tigers? Pistons. Okay. Swerve. Okay. Best portrayal of Detroit Detroit rock city, or Motown's greatest hits. Yeah, I didn't see either of them honestly, cause I can't say, but I would probably say Motown's greatest hits. Okay. Last, last question is Matthew McConaughey or James Brown? Matthew McConaughey's from Detroit. No, but he was in Detroit rock city. So I forever well, we're going to make an exception on that one. All right, so we'll go to James Brown then. Okay. Fair enough. Okay, Dan, if you could let us know how we can find you, your website, your social media accounts, because I know you have a very vast online presence and this was great. Thank you for being open and honest and playing along with our silly, ridiculous question.

Dan Lewkowicz:

Yeah. Thanks for having me. This was a lot of fun guys. Really appreciate it. Oh, you can find me on LinkedIn. My username is Dan Luke, D a N, last name L E w. K O w I C Z. It's really the only social media presence that I have is on LinkedIn. Our website as a company is Fortis net lease.com, F O R T I S and E T L E a S e.com. And, send me a message on LinkedIn. I'll get back to you and I'm happy to help in any way that I can, whether it's referrals, you know, a good joke or just, you know, some, some advice in the industry. or if you have a building to sell or you want to buy, I'm happy to help you that way, too. Well, I can tell you, he really knows that stuff is it's a pleasure to really experience your great bast industry knowledge. And again, we'd love to have you on in the future. Thank you so much. I really appreciate it.