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Hey, Hey. Welcome to the new episode of Commercial Real Estate Talk with Steven Arne, where we have what we hope to be interesting, compelling, and informative conversations with top leaders in the commercial real estate industry. And I'm super excited about today's guest, Caitlyn Murphy. Arduino. She has an interesting story, family business, decades of history in Southern California. But before we get to that, let me bring in my co-host, Arnie Garfinkel. Hey, Arnie, how you doing Today? Hey, how you doing Steve? Doing well, doing well. Pretty good. Summer's over starting the fall and, uh, new, new Year's. Almost Well off the debate last night, the trip to Vegas on the lending side. Yep. And, uh, how are you seeing business out there? Actually, the lending business is picking up a little bit. I mean, even though rates are still, you know, the, the Fed hasn't lowered the rates. A lot of the lenders are lowering the rates, which is a good sign. So that's good. That's what we're seeing businesses picking up a little bit. Not quite as, as much as we'd like it, but it's going better. Right. Well, on our side, we're super busy. You know, we've got our media business going, our news side, ran tv.com, the e-blast. We send out our review video site where you're watching these, uh, this video and our conferences. We've got October 2nd, we're doing our first Arizona state of the market conference, so we are super excited about that. Uh, but we do have some more business to take care of before we bring in our guest. Sure. So, uh, we've got some sponsors to talk, talk about, right, Arnie? Yeah. Let's, let's get to the sponsors. Oh, by the way, before we get to the sponsors, we are having a conference, a commercial real estate, uh, networking exchange up in San Francisco in November, November 14th, uh, up in, Say that date again, November 14th, 2024 at the Marines Memorial Hotel, which is a jewel right in Union Square. So we hope to see you all there, a full day of networking. But anyway. Excellent. Let's start talking about who our sponsors are today, Right? The great companies that make this show possible. The first sponsor of the show is commercial real estate inspectors. Great client of ours in Southern California. They're skilled inspectors provide critically needed inspection information in easily understood terms, as well as inexpensively, uh, simple solutions. Whenever possible, let commercial real estate inspectors help you protect your deal. Call Tiffany Simington and book your next next inspection Today at 8 1 8 9 5 7 4 6 5 4. Tiffany at 8 1 8 9 5 7 4 6 5 4. Who's up next, Arnie? Our next sponsor is Fidelity Mortgage Lenders. Fidelity Mortgage is their private lending company specializing in commercial real estate, founded in 1971 by Chuck Shon, also known as Uncle Chuck. It is known for its unique terms, fast funding, no prepayment penalties, and long-term fixed rates. Call Uncle Chuck or John McClain at 807 5 2 9 5 3 3. That's 807 5 2 9 5 3 3 Fidelity Mortgage Lenders. Excellent. And our next sponsor, another great company, paramount Property Tax Appeal. You know, inflation over the last couple years. It's cost cap rates to increase profit margins to decrease. One way you can fight back is by appealing the property taxes. Even if you have great income, you can still qualify to have your property taxes lower. The deadline to file is in November. Call Paramount Property Tax Appeal, (858) 758-9515. Ask for Wes Nichols Paramount Property Tax Appeal. All right, so let us welcome Kaitlynn. Arden, we duo with Murphy Development, president of Murphy Development. Good morning, Caitlin. How are you today? Good morning. Welcome. Thank you. Thank you for doing this. Uh, you know, I know you're busy. Got a lot of deals going on, and so, uh, and a lot of you know, things in, in your world. So we really appreciate you taking the time for our audience. Um, you know, we think it'll be great, so really appreciate it. But let's get started. We got a lot to cover in an hour less, a little less than an hour. So, uh, stay tuned audience. Um, but let's get started. Uh, you know, I know a lot of people who will watch this no Murphy development, you know, decades, you know, developing down in San Diego. But why don't you give our audience a history of Murphy Development, um, you know, history, properties, geographic, uh, uh, reach, and, you know, the sectors that you're in. Uh, I'll hand it over to you. Sure. Thank you very much, Steve. We just celebrated 40 years this year of our Murphy Development Company history, which we're really proud of. The company was started by my dad, Mike Murphy, as one of the pioneers in the Otai Mesa area. And back then there was no border, there was no border crossing, just a little fence in a sway back cable with a little faded sign that's in Mexico on it. And it has come a long way since then. And we have seen the booms in the bus of Otay Mesa over the years. Um, in the history of the company, we've master plan and developed about 10 million square feet of buildings, which it covers about 500 acres between Otay Mesa and Scripps Ranch, all in the San Diego Metro. Um, we are a typ a typical developer. We love buying big pieces of land. We entitle it or permanent, we take it down in phases. We love growth areas. Otai Mesa, like I said in the 1980s, was just getting off its feet, and we really caught the Quila Dora wave down there. Uh, our new entry into multifamily, which I'll talk a little bit about, is in the Boise area, which is a growing metro area, and that's an exciting opportunity for us. So as dirt people, we like to say, we really focus on the basis and the land, and that if we come in at the right time, get the right basis, we're able to put the best product on that land in order to provide, you know, fortune 500 companies who are our main focus, um, that are product that they would choose over a competing property in that area. So, um, we are not, we we're pretty specific. We build 80,000 square feet as a typical industrial size for us, or typical tenancy. Um, we started out pretty small and have grown, you know, 200,000 feet would be a big building for us in San Diego. So, um, that's about the max size to two 50 that we would build. And, uh, you Still own properties in Otai Mesa? I know you've been We Do. We've sold, we've sold a lot. We have almost sold ourselves out of a portfolio, but I will mention the sale, um, or sorry, the purchase that we did a couple years ago there, and, um, and then we own some land and script ranch still. So, but we do, we're always, I feel like we're always gonna have a finger or a pulse on Otai because of our history there. We love the market. We don't see it going anywhere. There's a lot of infrastructure still going in there, so, um, I'd love to continue to be an owner in Otai. Right. Kayla, For people who are maybe watching who don't know the geography, this is huge swaths of land in eastern San Diego right along the border Yeah. With Mexico, you know, which was right for industrial, uh, development decades, you know, a couple decades ago, as you mentioned. Yeah. You Were. So, yeah. Kayla, I was gonna ask you, uh, why and how did you get started in real estate? Um, tell us a little bit about your first real estate deal that gave you the love for real estate, of course, you know, uh, family company and everything else, and what brought you back to, uh, to Murphy Development? Sure. I always pictured myself working in real estate. Some people have a vision of what they're gonna do. I always pictured myself in an office, but really, my dad would take us to sites back when we were kids. I have pictures in front of the marketing signs and a big piece of dirt, you know, it sits in his office still. Um, so it was always incredible. That's awesome. That's awesome. It's like a bear of real estate. I think there's a lot of college kids and, and women in particular that don't really know about the opportunities in real estate. So my dad's been a developer my whole life, um, and I, Well, and some people just naturally rebel, you know, against what they're bail. Yeah. I knew I wanted to ultimately go to work with my dad. I knew it wasn't something that I wanted to do right out of college. So I was really lucky that I interned at HFF before college, um, or sorry, before I graduated, and then after graduation. I really enjoyed my experience there. So I looked at all the offices of HFF, ended up in Newport Beach, um, almost ended up in Dallas and did a five year run at HFF, which was a wonderful start for me. Mm-Hmm. Looking at all property types. I did construction debt, I did a lot of permanent debt with apartments in retail, which were really big at the time, 2003 to 2008. Um, and I just had a lot of fun working with great people in real estate. So it was something I, I knew I wanted to stay with. Um, I, I guess I just needed a little bit more. Um, but Newport became a little vanilla for me, and what I was doing became a little monotonous. So I, um, I wanted to get out. I went to grad school all the way across the pond in London, which, you know, I, I tell college kids. I don't recommend for like the networking, but it was the best experience of my life as far as, you know, travel and culture and life experience. So I graduated there in 2009 and, uh, it was a terrible time in the market to get a job in. Okay. No, that's right. Yeah. Um, I had quit my job in May of oh eight, which was actually perfect timing at the time. Um, but I, I ended up finding a job with my dad, fortuitously, and at the time, we didn't have anything under construction. I had about five years at Murphy Development where I was learning the ropes of development. I came in with not as much, you know, engineering construction experience, not no entitlement experience. And so I really cut my teeth in the beginning when construction and development was really slow. And I spent a lot of time working on the community plan update for Otai Mesa, meeting with city leaders, meeting with engineers, understanding the city planning side of things, and really advocating for our specific properties within that community plan, which I still get questions about today. Like, why was it this date and this? And I go, you have to get involved with it, you know, and it benefited us. Um, so I, I really enjoyed that side of the business. I'm a big advocate of asking questions. I certainly always to this day ask questions, particularly of my contractors and engineers when I don't understand something. But, um, I'll go back to your question as to my first deal. My first deal that I financed myself at HFF was a $1 million land loan for a to be built office project next to the Jenny Craig building in San Diego. So it's this wood building off the freeway of the five. It was a guy I knew from high school, and I arranged a bank loan, and it is still vacant land to this day, but I, I arranged that loan for him. And then before I left HFFI had prop myself up. I did a $68 million construction loan on a Sunnyvale office building with Goldman Sachs. Ah, there you go. And that did get built, and I think it was a big success. I don't know how it stands today, but, um, that was, I was really proud of myself for being the initial lead on that deal and kind of seeing it all the way through to completion before I left. Um, but yeah, when we, when Murphy development, when I got my hands really dirty in the business here in San Diego, it was a lot of horizontal infrastructure. So again, I was learning about sewer and utilities and really kind of the basis of development of putting in traffic lights, expanding roads. So that was a, a good basis for me to continue with the vertical throughout the rest of the year. Well, you know, given the types of properties you developed, you know, and the master playing everything that went into it, I don't know if there, there really is an answer to this one, but is there a deal you look back on that you wish you guys never did that, you know, you had to take a loss on, or just took forever, or never got built or done any horror story? Yeah, those are the funest, No, thankfully there's not a wish. We hadn't done this, but we kind of, I, I guess I haven't used the word land banking, but we did save the best for last with our Brownfield Technology park project. We owned it for over 20 years. And the reason we kind of saved it was because it was located on a diamond interchange of a freeway, which when we bought the land, there was no freeway. And it was long before that, but it has, it, it became a huge success. In fact, I looked at the multiple on the deal the other day, and the IRR because it was so long, we still had a, we actually had a pretty good IRR, but the multiple was 28 times, because over the years, you're, you know, not, you're selling some freeway land and you're doing this. And, um, it was, we pretty much sold it at the top of the market. So it's a deal where we can look back and say, that was really successful, but it took a long time and we had to be really patient with it. Now you mentioned the IRR, and, uh, you know, when you're looking for new projects, do you rely on I-R-R-R-O-I or just your gut, this is, this looks like something new that I'd love to do? Yes, I think we do use a lot of gut as having been in the development business a long time, particularly when, okay, on paper right now, the ROI or, you know, return on cost doesn't look amazing, but we know that that's a great location. We know it's in future growth, we can see demographics moving that direction. So from that sense, like in my gut, that feels good. Like if I buy it, I can wait out the return to get up a little bit. Um, or maybe the rents aren't there today, but I do think they'll get there in the future. But as a developer, we use return on costs for most of our, uh, evaluation. And then if we're thinking of bringing in an institution, we definitely have to look at the IRR or the multiple, because that's typically what they will use to evaluate whether they want, And do you have to run like different scenarios if rent go up this amount or rent go this amount and cost and, and run a bunch of, of scenarios, and yes, that's why, That's why Argus is very helpful. We, um, I, I didn't wanna buy that software for a long time, but now that we're more on the acquisition looking for acquisitions, we, we use it and it's very, you know, friendly to putting in different iterations and rent growth. But I know that, that, when I was at a broker conference last week, I think rent growth and cap rate, exit cap rate are the two biggest volatile, you know, indicators to put in a model. So the brokers are gonna ask you like, what are you using for rent growth? What are you using as your exit cap? And I, I think those are areas where people don't necessarily know what to use right now because it's a little bit uncertain out there. So, Um, right. Which leads perfectly into the next question was, you know, how, you know, you, me, you mentioned when you're out looking for deals, so how do you go about looking for deals? Is it mostly from brokers? You go out there and research an area and find stuff that isn't listed or, you know, how do you go about it? And then there's that strategy, opportunity question. You know, do you pick an area and research it or do things come across your desk that catch your eye and then you go after those? Yeah, so we, we certainly have a focus. Our focus has always been San Diego Industrial. Um, we'd love to buy land. And right now, I don't think the land market is priced to where rents are. So I, I don't see myself buying a lot of land if there's an off, I'm looking at an off market opportunity in land right now. I hope I can get it. Um, but brokers for sure, we use the brokerage community. We've gotten two deals in Otai Mesa off market because people know we can be discreet. We're a small company and because we know the market so well. So I'm grateful to the brokerage community for bringing us those deals. As far as on the opportunity side, yes, we did look at Boise saying, this is an area we wanna focus in. It just is a little bit random. My dad moved to Sun Valley five years ago, and, you know, we love the area. It's a growing city. So we took a look at that market, we identified areas we wanted to be in, and we started making offers. Um, but we did work with a broker there, so, So, so you've recently acquired property in San Diego, right? Uh, yeah, Almost two years ago, I guess. That's right. I mean, for, from what I hear, no, not a lot of people are doing deals lately. So I guess I fit in with the, like window. Well, yeah. How, how about looking, looking at like Arizona, some other hotbeds for industrial, because you guys are, you know, such an industrial history and now the market's so Well, Arizona's booming. I'm doing a conference there in a couple weeks. Uh, but so to skip to multifamily up in the mountain states, yeah, I, it's a big jump. I know we have looked at Phoenix and Houston in the past. Um, I, we kick ourselves because we were looking at the 3 0 3 corridor before. I mean, there was pe, there was developers there, and in fact, we were like, there's too many institutions there, we're not gonna do well. But in, you know, in hindsight, we should have gone there when we were looking. I think it was like around after the great financial crisis. So it, it would've been a good time to invest there. But, you know, I, I actually do applaud my dad. He, for, for being as successful as he's been. He's never needed to make, you know, a mag. Like he doesn't wanna be this giant company. And he's kept it, um, you know, focused. And I think people can get lost in like, Hey, I'm gonna go here, I'm gonna go here. There's definitely a herd mentality in real estate. Um, I do want to look in select markets outside of San Diego, um, particularly with the challenges that there are right now in the capital markets in California and in the legislative side of things as well. But, um, we are comfortable in this market. We have great connections with the city and with, um, other municipalities. So that's really been where our success has been and we're happy to continue to try to do that here. You gotta find that quality balance. Can I ask a question? Yeah, you, you, I mean, I can just, I just go away and let you ask all the questions. Go for it. Caitlin, with your background with from HFF, tell me about how you finance deals. Do you use debt equity, uh, use banks or self-funding? What, what, what do you do when you see a deal that you want? Sure. We, in December of 22, when we closed the last deal, we paid cash. And that was the first deal we've brought an institution in for, um, it was a building in Otay Mesa. Got it. At a great basis. It was corporate real estate that was being offloaded somewhat of an inefficient process there. And, um, that was the first deal. We bought cash because interest rates had started going up and they were volatile. And we just said, Hey, we'd rather put money in, uh, all cash right now with the opportunity to refin, you know, to, to finance out if we needed to. We've kept that building all cash. Um, in our typical model as developers, we do get, we try to take the land down all cash, uh, and then we get construction financing and permanent financing, and we use mortgage brokers for that. We've had great relationships, not just with HFF, which is now JLL, but with other brokers as well. So, um, we are positive on debt. Uh, right now. That's a little bit challenging even on, you know, and especially on the construction side, um, where you're getting in the 8% plus numbers. Yeah. And with rates changing, hopefully that really alleviates some of that big interest carry you're gonna have. Um, They're coming down a little bit now. I mean, even, even though the feds hasn't done anything, but the rates we're seeing from, from a lot of the lenders we're dealing with are coming down Mm-Hmm. They're self coming down them by themselves. Yes. We haven't been act, we don't have anything to actively finance right now. We are gonna be buying land for cash, um, pretty soon, probably next year is when we'll close. But, um, that is something that we've never been over leveraged on land, which is how a lot of real estate developers have been taken down in the past. So we make sure we, I mean, I think one deal we bought with 50% debt on land, but, um, we paid that off pretty quickly. So we have to be, we're, we're conservative. I mean, overall, we're a pretty conservative company when it comes to financing as well. Good. Well, and your background helps. I, I, I mean, and, and switching to the equity side, do you form partnerships? Are the acquisitions under the corporate, uh, under a corporate, uh, Murphy development? How, how is that part of it, you know, and are you out there raising money for the different deals or? Yeah, so that has been another very, I I can say lucky, beneficial area for us. We, other than the one deal we closed a year and a half ago with an institution, which has been great, we, we have a great relationship with them and we would like to do more deals with them, but historically, we have done everything with private partners, and Murphy is the managing member or the GP, if you will. And then those folks are the LP equity. And we have not had to go out and raise, you know, additional outside equity. And that has afforded us a lot of flexibility on the buy sell side. So, you know, there's no three to five year window we have to hit with a fund. We don't have, you know, at least have to hold it for 10 years, all these other, you know, requirements and timelines. So, you know, I know you may ask about like, whether, when do we buy and sell? And I think Oh yeah, the private partner, The next question. Yeah. The private partnerships, uh, allow us to make that decision just with our partners. And, um, Sounds like these are long term relationships. Who, who, who know your business model or comfortable way they Yes, And they've been really multiple. We've been good to them. So, I mean, obviously we get to promote and, um, we, we make it, you know, a market active promote. But, um, that, Well, let's say we've got some high net worth individuals watching this. Can they, can they, are you taking more capital if we have, you know, a major high net worth individual who watches this and how do I get in? Yeah, we've not done any sort of outside fundraising before. We are, we are probably committed on the multifamily land that we're going to buy because our wonderful partners are excited about that opportunity. Um, but I do think in the future, I mean, I, I will say we're like the high net worth family office is the type of money we would go to first. Um, but it would have to be somebody we would wanna have a relationship with long term, obviously. So, um, but when it comes to financing like phase one of multifamily construction, I do think we would want to engage a broker to go look for, um, equity and debt for us. But for now, we are really pleased with the response we've gotten from our partners. Right. Excellent. Um, you mentioned briefly before about exiting deals, so let's bring that full circle. Yeah. Can you, uh, get into some of the sales you made within the last couple years? I know a couple hundred thousand feet here and there, you know, and some new buildings seem pretty nice. Yes, I know. I, I kind of like, sometimes when I think about what guys are doing in LA and other parts of doubt, I'm like, wow, we're really small. But it's just been really great. We've had a good, um, past few years with Covid and with everything that happened in industrial, our most recent two sales were to an institution. Um, we sold the first, or sold, I guess I'll go into the project, it was, it's called Brownfield Technology Park. So it's an 80 acre piece of land that, um, ultimately got divided by the 9 0 5 freeway in Mesa, the northern half. We sold half of that land to Salvation Army for a build a suit for them, which was a really awesome project to be involved with. They moved their, um, adult Reha rehabilitation Center out of downtown San Diego, sold it to Kilroy for high rise office, or maybe it's gonna be apartments. Um, and then they moved down to Otte Mesa. And so from a zoning perspective, that was a little challenging, but sold them the land built in industrial building and a, a residential facility for a hundred men. We saved the other half of that site for industrial. We then built two roughly a hundred, 120,000 square foot buildings there, uh, on spec. The reason it's called Brownfield Tech Park is because it's across the street from Brownfield Airport. Right. There was, it was not a previous brownfield, which many people think is the case, but, um, it's a long time San Diego and military airport. Right. So that's where came from. So Heinz bought those two buildings, uh, in June of 2022 for about 330 bucks a foot. So that was probably the height for Otta Mesa Industrial. What'd they cost to build? I'm not gonna tell you that one. I have to ask. Oh, flex. Um, again, we own the dirt for 20 years, so, right. Yeah. So very low basis. Um, the south side, so the other 25 acres on the south, we sold the western half to coal rich. It's a local residential developer, and kind of tied into the community plan update work that I had done many years earlier in maximizing the value of that land. We were given the zoning of business Park residential permitted. So that was the first zoning in San Diego. We were the first property in San Diego to have that zoning, and that allowed 49% residential next to buildings that were, um, allowed to be industrial. So we changed the lot lines. We maximized the residential, we sold that to coal Rich, and then we also reserved those to, um, the site next door, 12 acres for two more industrial buildings. And so when we sold to Heinz, we did a forward sale to them for the additional two buildings that we built and completed last October. So almost a year ago, finished those buildings. They did give us a slight price reduction as we were watching the market change over that particular year, and ended up still selling the buildings for a really great number, um, better than they are today. So we were really pleased with that. I will say we did not ever intend to sell that project. We had long-term debt on it, and we ended up paying that off, um, with, you know, with penalties because it still made more sense to us to, to sell at the time, given all the, um, given what was going on in the market. So that, that which Changed your mind. They came along, they, yeah. The interest, Yeah. That was a really great project for us. And at the, um, I will say one interesting little vignette. We, we had the northern half of that project on the market six months earlier when we, um, when we had the campus project of ours, which was like 665,000 feet, three buildings. We ended up selling that, um, uh, to another institution in late 2021. Um, that one was a great deal. Um, I'll get into that in a second. But Brownfield Tech Park, we were gonna sell those two buildings, almost got under contract at $250 a foot, and I kind of pressed pause and said, the market seems to be coming our way. And, you know, a year, nine months later, we sold it for almost a hundred dollars more per foot. So it was, it was just, the market was escalating like crazy, and it was really neat to be a part of. And, um, but like Took a listing with brokers. Sorry, did You have a listing with brokers? We did. We had Cushman and Wakefield. Alright. Our industrial sales team did a great job for us on, on both these projects. So always like giving the brokers a little pub, you know, you gotta, yeah. Um, Joe Shya, Jeff Cole, brand Berg. Um, all right. Great. Competent brokers. Def Celebrates our panels. You got, you got the next one, Arnie. Yeah. Tell, tell us about, uh, Idaho, what brought you there and, uh, you know, what you see as far as prospects in the sectors that you're in. I mean, I know you said multifamily, and I know we know you, you're known for office, I mean, excuse me, industrial, but you're branching out to other stuff. So tell us a little bit about It. We are, um, so we are under contract on some land in Boise. The reason we're there, as I mentioned, is because my dad moved to Sun Valley, and we, we actually looked at the industrial market there first. So, um, it's a, it is a different market than San Diego. It's definitely a small market. It's a smaller tenant market. And, uh, it, it did get overbuilt. So there were a lot of institutions that went into Boise. Some got the timing right, some didn't On the industrial side, it got overbuilt industrial Side. Yeah, right. So we've continued to keep our pulse on the industrial market there. We'd love to have an opportunity to jump in, but I'm not seeing that just yet. Um, on the multifamily side, my husband joined the company about a year ago, actually a little over a year ago, um, to try and build the multifamily platform for us. So again, that was kind of our strategy. We're gonna, we're gonna diversify if there's two asset classes we wanna be in, it's industrial, multifamily, uh, we are family companies. So, uh, Two solid, two solid industries, that's for sure. Yeah, definitely. So then he started, uh, looking around the market and, you know, keying in on an area, and like I said, just started making offers in, in this one particular corridor that we really like. Um, kind of a growth area for Boise. It's, Boise is, um, only about 800,000 people. It's made up of, you know, five smaller municipalities in the Boise, MSA. And, um, it's a small market, but we think it's a, you know, obviously a high growth market. It's the second fastest growing city in the country. Um, there's a lot of people moving there from California, Washington and Oregon, both for political sake and for opportunity's sake and jobs. There's tech jobs expanding there. So, um, micron is there, um, from the CHIPS Act, they're expanding their facility. Um, and that's a great investment for the city. So there's a lot going on there. And, um, we're excited, I think based on, my husband has institutional multifamily experience with a group called the Richmond Group, um, where he worked for a number of years. And so we just, uh, our philosophy at Murphy has always been like, find the best consultants, put the best team together, attorneys, you know, architects, civil landscape, and we're gonna employ that same strategy for multifamily. We've, we know dirt, like I said, so taking down 80 acres is not something that intimidates us. We gotta make sure all the right utilities are in place or bring them there. But, um, that's kind of where we can combine both our expertise with this new multifamily chapter that we're opening. Gotcha. Well, I have a two part follow up question to what you just said. Are you gonna focus on this deal, make this one work, and then look at other geographic areas that are, you know, have similar, you know, characteristics or are you looking already while you're developing this one? No, we're gonna stay right now focused here. This is gonna be a multi-phase project. Um, I think we, we have been looking in San Diego. San Diego is a little bit of a different strategy when it comes to multifamily. It's more, you know, infill coastal markets that we would be interested in 50 to a hundred units. But in the area where you can actually buy 80 acres of land, um, that's gonna be kind of the multi-phased woody walk up type of, uh, Gotcha. My second ques part question was, what's a major difference that you've seen in multifamily versus industrial? Well, just getting started in multifamily, it is, um, we're working with it. It feels very much like my dad has explained, it feels a lot like Otte Mesa in the eighties, even though it's a completely different asset class. Otte was farmland, otai didn't have any freeways running through it at the time. This particular part of Boise no freeways, it's farmland. So there's, there's similarities and, and it's, again, it's looking at the demographics, it's looking at the growth patterns and the need. I mean, there's a lot of young families moving to Boise. There's a lot of older singles. So like, who's gonna need an apartment? What's the zoning and land use? Um, what's the supply there? It is oversupplied right now, as a lot of markets are. So we're happy. We're not, we're not coming out of the gates building next month. I think the financing would be really challenging if we were gonna try to do that, that, um, so we do like the timing that we're gonna hit when we do decide to build there. And hopefully the debt and equity will fall in place when we do that. Yeah. Sounds exciting. Yeah. That brings up the question with interest rates and, you know, I mean, the interest rates the way they have been and, you know, you buy, uh, your land cash, but when it comes time to do the, uh, the permanent financing, uh, how are you finding that and how does that work into your strategy? Mm-Hmm. Well, I think rates matter the whole way through. Yeah. Because as we structure these partnerships, we have to think about what's our pre rate, you know, like what are, what's the alternative that to, to somebody who wants to invest with us and get a preferred return on the, the initial equity that they're gonna put in, even on the land. So interest rates matter regardless of when we're talking about the phase of the deal. Um, of course, like I said, the interest carry on the debt, the construction financing, that can be a big factor in whether your deal pencils or not. So I'm excited that they're supposed to come down. I think, um, I saw CB's forecast, uh, last week. I think it's Conti, you know, the next couple years are supposed to continue to go lower and lower. And I hope that's the case. I think it will be dependent on the policy that's gonna come out of our government. Yeah. Um, I think that's playing a bigger and bigger role in, uh, in what's happening in our markets. So, um, we hope that we have a great next, uh, few years to co coincide with what we're planning to do. Knock on wood. Hey, to shift gears a little bit. How involved do you get with, uh, architecture and construction? How, how thick into the weeds, you know, do you personally you, you know, get, is that something you're, uh, you know, interested in and, and involved in? I'm a big architecture fan, but Yeah. So are we, I think it can absolutely differentiate your product from the rest of the market. And I think most people, well, I should say most people, any broker going to Otai probably could identify that's a Murphy building. That's a Murphy building that's not, granted, we've sold a lot of our product and they may have butchered the landscaping after we left, or they, and said, we're taking all the trees down, which has actually happened. So, um, yes, we, I've inherited this from my father. We get very involved in architecture. We've switched architectural firms over the years as things have, I mean, we've done, you know, one big project, 2 million feet with one architect. We've done another, you know, 200,000 with another. We, we try to spread the wealth, but we do have a signature, we call it a bull noses at the top of our industrial buildings. All right. Yeah. Um, which maybe you'll see some photos here. Yeah. Oh, no, We'll, we'll put 'em up. Yeah. And so we, we have great feedback. I toured, um, when we were selling Brownfield Tech Park, I toured a lot of folks through the buildings and they said, this is the best looking industrial project I've ever seen. And that just, you know, we're really proud. We put a lot of money into landscaping, which most industrial developers do not do. Yeah. Um, we think of it as a corporate environment. 'cause again, we go after corporate tenants. Um, we typically don't do multi-tenant projects. And we want people to go, you want your tenant to have employees that wanna come to work, and therefore you create an environment that is a positive environment for them. Um, so on the architecture side for sure, and even multifamily, it's been fun looking at other projects and what we wanna model them after. And I think that's even more important almost. 'cause you wanna attract somebody into your door and they wanna lease an apartment there. You've got a lot more people, a lot more foot traffic at an apartment. And, and so getting the amenities right and everything will be really important. And you wanna put your signature on there. You want everybody to know this is a Murphy development building, whether it be industrial office or even multifamily. Yes, absolutely. You Absolutely have that signature on there. So that, what, What style of, uh, architecture is the multifamily property in Ad Hub? We haven't keyed in on that yet. We're at the beginning stages, so, okay, sure. We will have many styles. There's, you know, it might be 1200 units, it might be 1500 unit. So there's a lot of opportunity to put a few different style if my husband and I have different opinions. Is the market up there one bedroom, two bedroom? Yeah, there's, um, I would say two and three. It's, I mean, there's everything. There's one three, we would have a mix of ones, twos, and threes. So, um, Right. I mean, you never find threes being built in Southern California. No. Right. No, but there's a lot of new homes up there, so you're right. But it's, renting is far more affordable than building, than owning a home. So that's still the value proposition of an apartment, maybe Even build to rent opportunities. Yes. We haven't looked into that product yet, but there is some of that product going up there. So, um, I think it'll be, it'll be a variety of different styles. And, And where do you find the leasing challenges right now in your area? Uh, whether it be the industrial or, or even the multifamily as you get to that? Yeah. Um, can't speak to the multifamily yet. We're not vertical, but on the, um, and I think the supply will dwindle. I think the timing, like I said, for when people are, I mean, people are still pouring into Boise, but, um, I do think we'll hit the, the timing on that from a demand perspective. But in industrial leasing, we do not have any space for lease right now. I wouldn't wanna have space for lease right now. It is a challenging leasing market. What you're seeing is a lot of renewals. Um, I just heard from one of our brokers, there hasn't been a single lease over 40,000 square feet that has been new in central San Diego Industrial. They're all renewals. Hmm. Um, south County has, I don't know, 2 million square feet of product that's recently been completed that needs to get filled and activities a little slow that says, What's the asking rate? Uh, roughly, uh, It varies. I would say a buck 20 to a buck 35, maybe a buck 40. It depends on the size of the space. So that used to Modified gross, right. Modified gross. Triple net. Triple net, yeah. Triple net. So San Diego used to be more expensive than almost even some of the other Southern California markets. Inland Empire surpassed us this last cycle, which was mind blowing, but it did, I mean, in these million square foot buildings that has now kind of leveled out and they're now what I hear is lower than San Diego, which always kind of, we lost all the Quila Dora industry out of Otai, um, because it went inland because the rents were 40 cents and ours were 65 cents, you know? Yeah. Mm-Hmm. Supply in demand. Yeah. So, um, but that's where rents are. Activity is slow. I a hundred percent have a positive outlook for the future of San Diego. We're landlocked. We, you know, don't have anywhere else to build. Um, we have a great labor force, especially with the adjacency to Mexico and Otai Mesa. That's a huge value to, um, tenants who wanna come here. And, and so yes, we're in a blip of the market where it's oversupplied, but I think that it's going to get better from here. Excellent. Let's hope so. You know. Yeah, right. We're doing San Diego in November, so hopefully, uh, there'll be some optimism there. That's true. Um, well, I wanna, wanna shift topics, you know, little bit. Um, and I think we were talking about this, you know, doing this show, if it's a goal of mine to have more women, you know, in leadership positions, making the decisions, uh, you know, on properties. And it's been a challenge. You know, it's our 12th show. You're the first, you know, woman in, in the leadership position. So tell me about the, um, experience, you know, taking over, you know, it's, especially in industrial, it's such a man's world in construction and development, you know, and, and how has that been for you, you know, so far, and then I have a follow up or two on that. Sure. I, I'm very happy to say I've had a really positive experience as a woman in real estate. I do mentor younger women, um, over the years I've talked to many, and I always tell them, use it to your advantage. Like, there are fewer women than men in the industry and even in the capital market side at HFF, I was one of few women in mortgage banking, and I'm a friendly person. I've always enjoyed relationships and relationship building, and that has served me well. I think you have to, um, keep an eye on your conduct a little bit more than men do. Um, that has not been a struggle for me. But I think that, uh, you just present yourself as a classy businesswoman and you earn the respect of your peers. And, um, I know that I'm competent and that took me a long time. Like when I first started out in the business, I remember being like, please don't call me. Please don't call me when I'd have my name on a package at hff. And I think women struggle with that a lot more than men. Um, kind of the building confidence. And so once you get a little bit more into your career and really know, like, Hey, I do know what I'm doing, or I do have good ideas, then you can really, um, yeah, just promote yourself, try to speak up for yourself and, and advance yourself in the industry. And you got Started in the finance side, which is a little easier as opposed to, to the construction. Right. And The construction side has been more challenging as far as, um, you know, I showed up to a tour recently and they're like, oh, are you the property manager? And I said, no, I'm the owner. You know, like there was just Right. I don't expect people expect you to be in property management and, and that's fine. We need to change that a little bit. I wish there was a lot more women in leadership in industrial real estate. I know in LA they have a women's group that does this. We don't have that here in San Diego, but you Do have crew and you are a member. I do Crew and Crew is a great organization nationwide. And I know we have a crew at my conferences all the time, and we try to push them. And I, I think you're a member of NAOP as well, correct? I am. I'm gonna be the chapter president of naop for San Diego next year. So I am, I'm pretty heavily involved in naop. I am a member of Crew, but I've not ever served on the board there. I just had lunch this week with the gal who's gonna be president next year of Crew for San Diego. So we want to combine forces and do an event next year. Right. Um, which I'm excited about. But Naop, I get pretty involved there with legislative issues. We just had our first PAC fundraiser, um, and that, again, we, we try to get as many women involved on the board as we can. And, um, that's been a, it's a great organization. Both of them are, I mean, just socially and then again, politically and legislatively, that's been really important. But I am lucky that my dad has been my mentor to me for the last, you know, 20 plus years of my career. And, um, I think that's a really important part of growing into the business. And, and whether you're a male or a female, I mean, there's, it's very important to have older people pouring into the younger generations. And so that's why I really try. I don't have a specific mentorship that I'm doing now, but I have in the past, crew does one, NAOP has mentorship groups. Um, there's a organization called Forward that is a women's, um, organization that I used to lead a group here in San Diego that helps business women. It's a Christian organization. So there's all sorts of stuff out there that you can jump into where you can find a mentor. So that is a, a big piece of advice I'd give to the younger women. There's a lot of young women in real estate right now, like Yes. Had a Naop event. Um, we have a lot of connections to the universities here in San Diego. So I see a lot of young women. It's really how do we keep them in the industry? And I think mentorship is gonna be a really big part of that Without it. And I think there is a wave of women who will be taking over these top positions. I mean, we just saw with Kilroy. Yeah. Um, you know, know and others. And so I, you know, I do think that's coming. You know, they're right, right underneath there. Um, and I think you gave some great advice, you know, for women starting out in the business, so certainly appreciate that. Arnie, did you have a, Yeah, I wanted to ask a little bit more about Caitlin. Let's find out about your personal interest, hobbies. Do you have his favorite sports team? Do you play tennis? I mean, you, we, we kind of like to know this kind of fun stuff. Sure. Um, I have a four and a 6-year-old, so my life the last few years has been pretty, I Bet you were gonna say a four handicap. No. And six, I Played golf last week and I had so much fun. I love golf. I don't play enough golf. I will play any scramble you wanna invite me to. I will not probably play 18 holes by myself picking up my own ball along the way. But, um, I think golf is a great tool for business and networking, so I enjoy that. But I live in La Jolla in the Bird Rock neighborhood, which, um, is a wonderful place to, to raise a family. And I grew up in La Jolla, so I am lucky to be living there now. Um, we renovated our house a couple years ago, which was the worst nightmare ever. Just like everybody else in the, I mean, all I really have to say is I have a four and a 6-year-old, and then it really, you know, we understand that you really don't have many other either. We, I have three kids all in the 20, you know, and Grandkid I got, I got, yeah, I got grandkids now and, and I got, we know, got two, two sevens and an eight. And, uh, believe me, and they're all mine are all boys. Well, yeah, that's a lot. It's quite challenge. Yeah. My old, I have a daughter who's six, and my son's almost four. So, So you have all the children at your company that you're president of, and then you have come home and take care of the kids. Yeah. You know what, it's better to have an older daughter. That's What they say. My daughter is the oldest, and, and I really found that that really helps as a parent. And then of course, the, the development of the two of them, I, I Agree with that. So, I mean, with young kids, we love getting outside. We love the beach. Um, I'm a big yoga enthusiast. I've done that for many, many years. I have to get my sweat on so that I can, you know, get my endorphins going. But it's, San Diego has a great lifestyle. We love to travel with little kids. It limits it a little bit, but, um, It's fun though. Enjoy going to the desert. Uh, when the weather's good. We're going this week, actually Hawaii with little kids. It's fun. Uh, shift over to, um, charities. Yeah. You know, uh, things that are important to you, uh, on, on that, on that front that we could give a little air time to that. Maybe we'll get into a check or something. Sure. Um, couple different charities. So Young Life is an organization near and dear to my heart. It's a national organization that is, um, a Christian youth group for high school kids and middle school kids. I was a young life camper in high school. I was a leader in college and after college, and I've served on committees here. So we're just getting that started. Um, it really focuses on unchurched kids, so we're reaching people that, um, we think really need that support and that community feel. So that's a big one. Um, St. Germaine Auxiliary, I'm, uh, a member of here in San Diego. It's a local charity that focuses on, um, child abuse prevention. So that's huge to me. My mother actually helped start the organization, um, many years ago, so. Awesome. That's important. And then, um, right now that's where I'm giving most of my time. Young takes up a lot of my extracurricular time, so Sure. Important ones to me. Um, the, the military is something that Naapp always supports as well. So I will say we do what we used to do a lot, um, with the Marines up in, uh, Oceanside and Pendleton, and we still are involved and do our golf tournament with them. And so that's been important for Naapp and for me as well. My husband's ex Navy, so. Oh, that's great. Yeah. Appreciate the service. Yes, Go ahead and, Yeah. Well, you know, I, I think this has been great. You know, the last question merely I had is on the, although I think you kind of answered it with the kids and the chaplain. Yes. President, do you have any other personal goals that you want to accomplish? You know, going forward, I, Yeah, I mean, my goal right now is really to build back Murphy Development's portfolio. We were probably at half a billion of worth, and I really would love to get another development deal and a handful of other renovation deals in, into the portfolio. We are working on a build a suit at Scripps Ranch. That's something I really wanna get and nail. Um, but, you know, we're, we're a family company. We're gonna continue to grow, um, organically it's maybe we have five deals coming in one year, maybe we have one deal coming in. So I'm flexible with that. But I am, I wanna have a good quality of life for my kids and for myself. Um, I wanna balance my work with my personal life and that, that's always a goal. And it's challenging to do, but that's gonna be my, my goal is to stay centered and to have a, a work life balance while still managing a company and leading people and, um, being successful. Well, great. Kaylyn, it's been a real pleasure talking to you, getting to know you, getting to know more about Murphy Development, and we hope to see you again soon. And believe me, we, we both do events down in the San Diego area and they're all commercial real estate related, so we definitely want my, might wanna call on you to come and November 21st. Yeah. Expect to, to Call. Well, that's, that's your next one is in Carlsbad. But, um, yeah, so we definitely appreciate the time And be best of luck, you know, with the new projects, the new markets. We'll certainly, uh, do a follow up. Y you know, give it like a year and do a follow up and see how they're coming and how things have changed, especially after the election and everything. So, you know, again, have a great day. Thank you. Uh, I got, I'm, I'm, I'm tapped out on our questions. Yeah, you're, you're, you're outta question. So again, Kate, thank you for your time. We really appreciate. Thank, keep An eye out on those deals. Alright, Stalin, take care. You've been watching Commercial Real Estate Talk with Steven Arne, sponsored by commercial real estate inspectors, Fidelity Mortgage Lenders, and Paramount Property Tax Appeal.