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The following video is the retail panel at Rent TV's Inland Empire State of the Market Conference. Hold on May 9th, 2023. It is comprised of John Reed with CBR E's, national Retail Partners, west Todd Huber with Paragon Commercial Group, Jennifer McClain Harimoto with the City of Ontario. Greg Gia Capozzi with Newmar Merrill Companies, and Brad Umansky with Progressive Real Estate Partners, Bradman of real estate partners, and we do more retail and lease transactions than any, any other firm from within 30 miles of Where you're sitting. Make sure to get that mic close to you guys so we all can hear it. Got it. Todd, Todd Huber, director of Development at Paragon Commercial Group, um, based outta El Segundo, have an office up in Palo Alto. Uh, do value add retail, really in the grocery anchored space, and then also some of your single tenant deals that we'll go through. Um, but really excited to talk about the IU where I've spent a lot of the last three years. Great. Good morning. Thank you, Steve, for hosting this in the City of Ontario. First of all, uh, my name's Jennifer Hira Moto. I'm the economic development director for the city. A lot of what I'm going to say today is going to sound like a commercial for the city, uh, and I can't help it. Uh, there's a lot to be excited about as far as development here and opportunity. I just wanna shout out as well, uh, Amber and Denise, they have been here and they will continue to be here all day. So thank you ladies for representing us. Excellent. My name is Greg Jacuzzi. I'm with, uh, Newmark Merrill Companies. We are a community focused, um, and community first developer, real estate owner and property manager for retail properties across Southern California. Uh, we also own and develop in Colorado and Illinois. And thanks for having me, Mr. Reed. I got your slide up to start off the Slide. Awesome. Uh, John Reed, c b r e, uh, national Retail Partners West Team, specializing in, uh, retail investment properties throughout California. The west. Uh, the Inland Empire represents probably one of our most active regions, uh, since 2012. Sold over 150 deals in the IE for, uh, for over 1.3 billion. There's the slide right there. Those are some of our, our recent deals. Uh, kind of a a variety of asset types from strip centers to anchored centers to single tenants. But activity is still strong out here. Jennifer, let's get, uh, let's get, uh, you to do your slides. Great. So I think that you've already heard about some of the development that's happening in the city, and a lot of the, the office, the industrial, the housing, it's all folding into what we're seeing on the retail market side as well. Uh, so Ontario itself, just so you know, um, this is exciting times for us. I've worked for, for a few cities. We have resources, we have great leadership. The city just had a, a sales tax measure approved. This is a 1 cent sales tax. This represents a hundred million a year in new revenue, a hundred million dollars. And so what we're doing with that money is we're reinvesting it back into capital improvement projects. And for you and for us, what that means is development projects. Uh, we're actually acquiring property for the purpose of redeveloping it. And, uh, we have a little map that Steve can't see. I I can't find it. I'll, I'll, I'll circle Back you. That's okay. Um, so really there's four different areas I wanted to highlight for you today. Um, who knows, Ontario, you're here, right? So that's good. You kind of know it. All right. That's a starting point. You found it. Um, so we have downtown Ontario, uh, the Toyota Arena, Ontario Ranch, and, um, underutilized commercial centers. So I just wanted to highlight those four, four areas real quick when we talk about opportunities. Um, so the first step is downtown Ontario. If you've driven through Euclid Avenue, it's a very ex, it's a confusing experience. Um, it, it's pretty, you have this really great green belt. It's historic, but you have these property owners that have been absentee for a long time, and the city has not really seen the activity there that it's wanted. So what the city has started to do is acquire, uh, some of these, some of these blocks, some of these properties, um, and partnering up with developers. So what we see now is we have three separate projects that are in entitlement. For the most part, these are mixed use. Um, our game plan is simple. We just want to find a way to revitalize those downtown historic buildings, infuse new residential, and also try to get a workforce or daytime population. So this is one of the mixed use, um, developments that's going to break ground this month. This is Hutton, Ken. Um, one of the comments that we hear about the mixed use and the retail, which is something that Citi wants. Citi wants new retail. Uh, the, the residential developers, they consider the retail a lost leader. But if we're going to make a case for ringing in New residential, we really need to see some sort of quality, uh, res uh, retail amenity. On the next slide, um, this is just a, a quick look at some of the underutilized shopping centers. If you drive along Hope Boulevard, mission, Euclid Avenue, you can see these. Um, and in one case, we had a former Kmart Center. The city actually reached out to the developer and or the owner and said, Hey, what are you guys planning to do? We'll buy it just to see if we can see something better than a vacant K-Mart. Um, it turns out legacy partners, they made a bid. This is about 13 acres. Um, this project's in entitlement right now, 5,000 square feet of new commercial and about 350 new residential units. Again, and working with the developer, they were apprehensive to bring in more retail. It's difficult for them, but for our work, uh, really making that case to the residents that they're getting something, uh, besides just more residents, was an important part of that narrative. On the next slide, um, just for the convention center, so just down the street, the convention center, this is an important amenity and a testament to what the council has been able to do, um, and, and leverage our, our assets here with the airport and the convention center, we're working on expanding it, actually doubling it. This is using, using those Measure Q funds. But with that, um, we continue to need more retail. So anyone who drives up and down Holt, all I see is opportunity. If you can find a way to assemble some of those underutilized pieces, let's talk. Uh, we really wanna figure out how do we deliver better amenities so that when somebody goes to the convention center, they're not driving to a neighboring city, um, to have a, a drink or a bite after. Um, I feel like I should land the plane. You tell me, Steve, but, um, we can get to the Toyota Arena in the next up. We'll go, We'll, uh, move on. Okay. I'll take a pause there. But as I said, I'm nothing but a walking commercial for Ontario. There's a ton of good stuff happening. Uh, my point is try to get you interested in it today. Excellent. Thank you. Well, we, we, it's, like I said, it's a colorful panel. Lots of slides, lots of properties, but, and we've got somewhere to show you too. So, but let's get into the discussion and let's, let's start, like I have with the other panelists. For the drivers, you know, the tenant and leasing, you all can chip in in your different lanes from, uh, underwriting properties for sale to reping tenants to, uh, you know, the developments you guys are building for. But tell me about the leasing market in the Inland Empire. Is it strong? How's velocity and what are the main tenant drivers, the types of tenants you're seeing that are looking for space in the ie? Brad, why don't you start us off with that? A lot of questions there. I'll just try to keep it relatively brief. Um, the market is as strong as is has been from a fundamental perspective, uh, with vacancy at about 6%, which is the lowest it's been since the mid two thousands. But that is in a mar In the mid two thousands, they were building five to 8 million square feet a year, and now we're building about a million square feet a year, and most of that million square feet is all pre-leased. And so we're really at a place where the market is tight. This was what 2019 was like. Uh, and it's, uh, we're seeing rising lease rates. Um, and so it's, we're definitely seeing a, in a strong place. I'll let the rest of the, the panel give their feedback, and we can always come back to the, some of the concepts. I would not dovetail off that. We, we, between Greg and us and other developers here, we're, we're building a lot of, or redeveloping a lot of retail out here. And the tenant interest's been really strong. I mean, we've just built 125,000 square foot center, 116,000 square feet of that was leased before we, we started our work on it. So incredible leasing momentum. Rising rates has been over a three year period where we've seen a lot more interest. And then once these tenants are getting open, they're coming to us almost immediately and saying, we need more room, we need more space. So I, the, the leasing story in the IE is really strong right now from a grocery anchored and, uh, kind of call it your single tenant drive through. Um, story is incredibly strong and happy to get into specific tenants, but I'll, I'll let Greg Chapman. Yeah, absolutely. So, um, I think we're seeing all of the major, uh, food groups of retail tos, uh, interested in the Inland Empire. Um, I really can't think of a category outside of super, super luxury or coastal retail, uh, that is not growing in the Inland Empire. And, uh, some of the key drivers for that, um, simply affordability, um, in Southern California, outside of the Inland Empire in the major markets, you are always tearing something down in order to, uh, build retail. And, uh, the cost of that is just unfeasible for a lot of, uh, tenants including grocery stores and, um, department type stores or, or, or soft goods. Whereas out here, uh, we're, we're building on, uh, you know, Virgin land and, uh, that affordability means that, uh, a lot of different retail users are able to expand their footprint out here much more rapidly than they are in the major metro areas of, uh, orange County and, uh, Los Angeles. Yeah, I would add from a, from an investment property standpoint, if you look at the, you know, if you look at tenant activity, that's where you're gonna find buyer activity. Really the, you know, a big chunk of the, the investment buyer pool, particularly the 10 31 exchange fire pool, they really rely on the, on the tele on the tenant to tell them if it's good real estate or not. You know, a lot of these, a lot of these operators are, you know, national and regional operators, so they do their diligence. If, if they're, if they're, you know, fine with the site and sign the lease and have a developer like these guys build the site for 'em, there's gonna be a buyer on the other end that buys the property because of the long term lease and the credit of the tenant. So it's, that's really what's driving the investment market. You know, particularly out here in the IE is a lot, there's a lot of, uh, newer built product that we don't see in like Orange County or LA or San Diego, because there's just not a lot of land to develop New Hill boat product. Yeah. Brad, You can chime in whenever you feel like it's just, you know, just grab the mic. Um, so I will say that it is a, although it's a strong market, it is definitely a softening market. Um, and what I mean by a softening market is there are fewer transactions getting done. Now, it's hard to tell if that's because retail or demand is less, or because they just can't find the spaces that they really want. And that's one of the huge differences from retail, from the other product types, is you can have a 5,000 square foot space in one center and a 5,000 square foot space in the other center, and one is old and ugly and the other one's grocery anchored. And you can, you could give that space away for that old and ugly space away for free, and that tenant is not gonna go into that space. And so that's why the retail market is always a really challenging market to kind of figure out. Um, and then the other thing I would, uh, I would offer is that, that, although Greg, you made the comment about it being more affordable, I would, I would argue that in places where we're seeing Dev new development, it's, it's from a co perception of underserved from the new retail concepts. So it may not be underserved from a grocery perspective, but if your grocery outlet are smart and final, you realize that that's a hole where you can actually generate enough sales, um, and effectively cannibalize some of the other locations to create opportunities. So I think that's why we're seeing, you know, every time we're seeing a new project going up, it's a, with a whole host of retailers that weren't in that trade area, um, beforehand. And so that's, that's what, you know, I like to say retail is like Rocky Road ice cream. There's just a lot of ingredients. Hmm. Speaking of that, from a rental rate point of view, what, what would be the range for the nicest and newest and the hottest market versus, you know, BSC property, you know, the, the one you couldn't give away for free and the one across the street, what would that range be? Um, so we are seeing more leases done at the $4 a square foot plus triple nine charges for the, for the top quality retail space. Um, it was probably just not too long ago that, like we may, we, we did one in a year, and now all of a sudden I'm seeing a lot more of 'em coming across our desk. Now at the same time, for kind of that more b b property, we're seeing rents, but rents at $2 a square foot, but those may have been properties that were a buck 50 a square foot not too long ago. And I know, Greg, I think you guys have beat those numbers, and I don't know about you if you've beat some of those numbers, but I'd love to hear from you guys on some of the, uh, and obviously John, you're seeing rent rolls with some of those numbers, but let's, uh, you guys Try again. Yeah. Greg, what are you, uh, projecting if you could share? Well, Actually we're a hundred Percent lease, so I can share some of the last leases that we were, uh, we have done on the, uh, the Rialto project that we're gonna be showing in a minute. Um, we're, uh, well over $5 a square foot plus triple nets for the shop spaces. So, um, that I think though, is a lot, largely a symptom of just lack of available good product. And, um, I think that that's probably a little bit above market because we are the only project that delivered in, in South Rialto with shop space available. So, um, I think, you know, that may have been a little bit of anomaly, but, um, I can, I can also share that confirming in our existing portfolio, which we have assets in, uh, Corona Riverside, Moreno Valley, um, uh, Ontario and others, um, that, uh, rental rates have definitely been pushed up even on the B and C properties. Now, how is your Inland Empire properties in New Martin Merrill own shopping centers in lots of Southern California markets and Backies, how, how is that comparing to what you guys are seeing in San Diego, LA Valley? Uh, in terms of activity in the ie, I would say that we're probably more stabilized in our inland Empire properties, uh, than we are in some of our, uh, outside of California properties. Uh, but it's consistent with what we're seeing in, um, orange County, Los Angeles, and San Diego, uh, where there's just a lack of available products. Um, and we're, we're benefiting from that. Jennifer, what are you seeing, uh, from the city's point of view in terms of, uh, retail inquiries and, and how are you marketing those spaces? You're doing that in-house, you've got a broker team on that. How, how are you marketing those? So, at, uh, most of these developments are done through a private developer. Um, all of them are in fact, so at this point though, they're still working on obtaining their financing. That project that I talked about for downtown, the, the C block development by Hutton, Kendra, uh, we had hoped that they were going to break ground six months ago. Uh, but because it's taken so long to get financing, it's been delayed. Ultimately, though, it'll be up to the developers, um, to, to seek out new retailers for that. We have our in-house team, but, uh, brokers, you know your business better than we do. We're we're just kind of cheerleaders on the side. Um, but as far as, you know, some of the, one of the projects that does keep me up at night, um, we do have a new, new development around the Toyota Arena. This is with AEP development. This is, uh, leveraging the 11,000, uh, seat Toyota Arena, which the city owns. It's profitable, they do very well. Um, the city also owned, um, and owned several of the parking lots around there. Adept development is going to, uh, develop 700 new residential units and 70,000 square feet of commercial. And this is going to be kind of like a downtown Disney LA Live experience. Um, they're working on obtaining financing as well, but that's a lot of commercial to fill up. Um, and that's also adjacent to Lewis Collection. They have a project off of fourth in Haven. Um, we also have a lot of new residents that are coming in there too, so Adapt is about to hustle, but I think their first, their first goal is getting financing for the project. Got it. Any other thoughts on the leasing market, Todd? No, I, I, John, We we're fully leased in Riverside. Now, I'd, I'd say the rental rates we're getting there right in the range that, that we were talking about that we're topping out, call it four and a half bucks, five bucks a foot. But we know because the center's right around a spin for sale, that those lease rates and those renewals are kind of getting close to two bucks a foot. So there is a big discrepancy. We're bringing new product to the market. We're in superior location. All the utilities are brand new. The build outs are brand new. So there's a lot of factors when you talk about retail leasing rates, the tis you, you give out or don't give out, um, that really impact those rates. But I'd say the rates we're seeing in, in the IE, are now competitive with our product and the San Fernando Valley, or in, uh, orange County. So it's, it's really strong. It, it's a great story. Well, uh, Greg, let's get into, uh, Rialto. Yeah, absolutely. So, um, this is, uh, the Rialto Village, which is located just north of the 10 freeway on Riverside Avenue in Rialto. Uh, it's between and, and hang on that slide for just a minute. Um, it's between the old, uh, Walmart building, which is to the south, and has been re tented with Ross DeeDee's and AutoZone and the new Walmart, which we developed, uh, from, well, really 2001 to 2014. It took us 13 years to get that, uh, under construction because of, uh, uh, Walmart. Um, and, uh, and so we developed, uh, the Walmart in pads to the north. And then, uh, the city was kind enough to give us the opportunity to, uh, purchase the city owned property between the two. And that's where you'll see that, um, Rialto Village project, uh, right there in in Kohler on that slide. Um, and this is kind of an interesting project because we had to lease it, uh, uh, three different times. Uh, the first time we leased this as a, uh, theater deal, and, um, the theater will remain un unnamed. But, uh, we ultimately, uh, backed out of that deal, um, over, over an issue of what would happen if the, uh, the theater chain went bankrupt. And, uh, our fears were, uh, were, were confirmed on that one. So after that, we, uh, leased it as a, uh, traditional grocery project with a, uh, 60,000 square foot grocer. And ultimately that got turned down at their committee, um, during Covid. And, um, and so our last iteration here, we actually, uh, enlisted the help of, uh, some, some of our friends at C B R E, uh, Brian McDonald, Walter Payel, and Hannah Curran, uh, who helped us bring in, uh, sprouts, Burlington, in and out. And, uh, and the rest of the current lineup, uh, that you see there. So this has been, uh, kind of a four year journey, but we, uh, did end up a hundred percent leased. Um, we signed our last lease on this, uh, about, uh, a month ago. And, uh, most of those leases were si were signed during the pandemic. And, um, so that's just a, a testament to our, our leasing team. Uh, this is a, uh, photo of, uh, one of the setbacks that we had, which is our construction site turned into Lake Rialto. And, uh, and the entire dry utilities team was, uh, uh, equipped with snores here, but, uh, um, that took us a while. We've never actually had to pump water out of a, a property, but the entire property is below grade. Um, so it was pretty much that, that reflects what the entire site looked like. Um, but we were able to, uh, actually maintain our schedule despite that a hundred year, uh, rain event. And we'll be having the great o uh, grand opening, um, late summer this year. So we're starting to deliver, uh, to tenants this month. Excellent. Great slides. Thanks for sharing that. Uh, well, What are the biggest challenges? If you have a tenant that's locked into the space, they want the space, you come to terms, what's the biggest challenge in closing the deal and getting 'em in? Uh, Todd, you take that. I think I'm, everyone here would say financing right now in the last, On the tenant side. Oh, On the tenant side? Well, On either side, are you talking about financing for the tenants to build out their space? No, the 10 or the financing for, So question is on the tenant side, what's the hardest part of closing a deal? I really, the story's been super positive for us. We haven't run into anything where I'd say we gotta a close deal in the ie. You've got tenants that are rolling out here that I, to me, are more realistic on when we call it ti allowances or buildouts. It really, if you've got a property they want to be at, there's a way to skin that cat. Um, on Riverside, we were starting basically from scratch, right? So we had tenants that were in boat early, we could coordinate with them. We got over a lot of the humps that come about when you're back filling existing space, which is the coordination side of who's gonna put in the grease interceptor, who's gonna bring the utilities. A lot of that we could figure it out because we were starting basically from scratch. Um, so I, I, I don't have a lot of negatives out here other places. Sure. But in the deals we've done out here, it's been pretty seamless. Uh, hey Jennifer, I wanted to circle back cuz I got the Toyota you wanted to talk about the, so I just wanted to deal with the visual on here that you were describing. So I don't you to circle back and describe, uh, the Toyota development. Sure. So just south of this as well, it's not pictured, but the 15, uh, 15 story building that Mike Rat maker is going to build. So this is just south of, um, what you see pictured. So essentially, I mean, this is really going to build out, uh, that entire arena development and we're looking at future phases as well. So, um, some of these pads are owned by Louis, some are owned by Newhouse. These are all under development, even north of Ontario. Um, again, those are Lewis, these are all new, new home construction. So all of this is really just an opportunity for more and more and more commercial. Uh, and we're also looking at building out not just, um, a the commercial but an entertainment district, aah, Nashville. Um, so we're really thinking very boldly in Ontario. So that's what's happening at the arena district right now. And you're shaking your head that concerns me. No, take my Head amazed. Okay, good. I'm excited, I'm amazed and I think it's just awesome and I admire the vision. It's just fantastic. Okay, then you can get the mic back. Ontario Ranch, Jennifer, Ontario Ranch too. Oh, So Ontario Ranch. So I mentioned, I've worked in a few cities and I think one of the reasons I'm so excited to work in Ontario is it is very amazing to work in a city where you are essentially building out an entirely new city. Um, when you drive through Ontario Ranch, uh, and I, I guess I, I won't mention some of the, um, the new industrial users like Nike, uh, but when you drive through there, it's, you see, you know, you see this era in transition. You see the dairy farms, you see the largest Amazon facility in the world. You see these new single family homes, and then you realize there's a ton of opportunity for commercial. Um, so it's 1.4 million square feet of commercial. This has been something that's been in the works for the past 20, 25 years. Again, a testament to the leadership and the council vision on this. Um, and so we're starting to see these developments come in. There's been a consortium of builders of nine builders. They're investing a lot in terms of putting their sewer infrastructure and everything else that's needed out there. Um, but we're still struggling too to get the tenants that we wanna see. Um, the, I'm, I'm no different than literally every other city where we wanna see a Trader Joe's. Um, and so we wanna try to get a Trader Joe's, I guess Amazon, um, fresh had signed a lease for one of the centers out in Ontario Ranch. Uh, they pulled out. So if anybody can help us bring a Trader Joe's, you would be, uh, you would get a key to the city. I don't know if I have the authority to give that, but, um, pretty much sure that I can. So we continue to see our struggles, but when, uh, in, in trying to attract the retail tenants, but when you really look at the opportunity there, it's amazing. Those folks that are moving in from la, those millennials, uh, that can't afford a home in, um, wanna grow their families in LA County or Orange County, they can come here, they can come to Ontario Ranch. These are the demographics that we hear the retailers are looking for. So it's, uh, a very exciting opportunity that we see in Ontario. Excellent. Well thank, thank you for sharing those slides, Jennifer. Uh, great. Uh, brings to life early what you guys are doing. Uh, we got maybe 10 50 minutes left for this panel. So I think we've covered leasing, I think we've covered development. Let's talk about capital markets. Given all, you know, all, all the ingredients we've just put into the, uh, sauce here, John, why don't you start us off? Sure. Uh, tell us, uh, the velocity, Velocity is down, uh, The types of properties that are actually making it across the line. The financing. Yeah, So generally speaking today, you know, the smaller the price point, the easier it is to get sold. And that's just because there's a, there's a lower likelihood that financing is gonna be involved. So your smaller, you know, single tenant, triple net leases properties, your newly built strip centers, your high quality grocery anchored shopping centers, those are gonna be your most liquid assets today. Um, anything that's off of that is, is much more difficult. Uh, the reason those three product types are the most liquid is if you look at the single tenant space, the buyer pool primarily gonna be driven by 10 31 exchange. If you look at the, the high high quality retail strip space buyer pool is primarily gonna be driven by 10 31 exchange grocery anchored space, similar for a portion of the buyer pool. And then there's just kind of the smarter capital that exists out there that will buy grocery anchored product. That's really the, you know, that's the darling child of retail and the larger price point deals. Um, but financing has made, made our market much more difficult. Uh, you know, I felt good like about two months ago and then this Silicon Valley bank thing hit and there's just a lot of concern in the, in the banking industry and that's, I think that's caused our mar our market to go on hold a bit. And then from the 10 31 exchange side, you know, because of the weather early on this year, a lot of the exchange buyers got a, an extension for their ID period until October of this year. So there's a lot of exchange money that's just kind of on hold, been on hold for the last couple of months. I, I sense over the last about three weeks that it's kind of freeing up and we're seeing much more activity on the listings that we have. We're seeing much more bod activity on, on the, with the clients that we work for, bring property, uh, projects to market. And then some of the stuff that we've taken to market, we've actually seen very strong activity on, even though there's disruption in the financing markets. So, I mean, How the deals out have closed would've been the, how, how have they financed it? What's been the LTVs? Have they, you know, how, what's the sure Source? Yeah, I mean general, generally speaking, lower leverage. Um, you know, for instance, like the Meadows Village Center, that was on the slide that I had up earlier that we just closed that on Friday, that's, you know, right around a six cap for a, a grocery anchored center in Temecula. Uh, that buyer closed that with cash and is gonna finance after the fact. He was actually the seller on the Foothill Village Plaza deal on the same slide. So we moved him from a non gross anchor property into a, a gross anchor anchored property. You know, his financing on that, he'll be low leveraged once he, once he pulls the trigger and refis, it's probably landing somewhere in the 50% range. And I think he's getting, you know, he's getting quotes probably somewhere in the mid five, mid to high fives. And he's long term, you know, he's, he's moving his portfolio from non-grocery anchored back into more grocery anchored. But generally speaking, you know, the lower leverage you are, the better off you're gonna be. Uh, some of the other deals we've recently got done where financing was involved, same, same story, similar low leverage, um, depending on where, you know, interest rates planning somewhere in the mid five, mid to high fives, local banks, Small life goes, banks are a little bit, you know, right. Yeah. Morely these days. Yeah. Credit unions, that's uhhuh credit unions, that's a small life, small life cos and credit unions. Some, some of the regional PL banks are still lending, a lot of 'em are not. And then some of the larger banks are kind of taking a hold as well. Right. So it's just, it's tricky out there right now. All right. Todd, net buyer, net seller, uh, Net buyer. Um, we, we'd love to be buying more. We do have some stuff on the market to sell, but I, I think at the end of the year we'll look back and say we're a net buyer. I, I was just listening to the office panel. I think anyone who can figure it out right now, and some of that is scrambling with debt and with equity. I, I think you're gonna be better off here in two years. Not to the extent they see it in the office market cause there's just been a lot of headwinds there. But our goal is to be net buyers and I think a lot of our time right now is focused on, on the ie Well, What, what are you experiencing when you're looking for properties? You know, there's the global, but then when you're actually going after properties, what are you experiencing as you're going after and trying to Yeah, I think I'll, I'll start at what properties are out there and, and I think what we're seeing is we're underwriting a lot of, like empty call it like hometown buffets, restaurants kind of outdated single tenant buildings. And then we're out underwriting a ton of a hundred million dollar plus deals and, and kind of where our sweet spot was called in that, call it 25 to $60 million range. That size is now increased. There's no one there, there, there's just not a lot of people putting kind of their grocery anchored core deals, value add kind of shopping centers with call a drug store and a grocery store and some pads. There's not a lot of that on the market right now. So it really is kind of a bifurcated market. And then on the sales side, we're, we're the, the single tenant, call it, we've got two Starbucks in northern California on the market where those deals would've traded it, call it three seventy five, call it 10 months ago. Those will trade probably at five now. So those deals have moved a lot versus the grocery anchored space, uh, a center like that we're building right now probably has moved 25 to 50 basis points on your exit now. So there's a lot more movement in the smaller deals and there's just not a lot of people playing on these big centers. And a lot of that's driven by financing. Um, and, and so financing is really key right now when we're underwriting it and it's moving every day. This is not only from us underwriting deals, but from people we're talking to that are, are buying deals right now. They might have been SOER plus one 90 a week ago at sopher plus 2 35 today. There's just not a lot of players. So there's a lot of movement between those quote Gotcha. Johnny, we're gonna, yeah. And in the single tenant space, it really matters on the quality of the tenant. You know, Starbucks is a great tenant, but there's a ton of Starbucks on the market, so the buyer pool kind of gets lost in the equation of having that many on the market. But if you had, you know, let's say a Chick-fil-A or an in and out or a McDonald's, you know, cap rates on those deals they've moved and if, if they're larger price point, call it like 5 million plus they've moved more significantly. But if they're, if they land somewhere in that, you know, kind of sub $5 million range, they've maybe moved 20 to 30 basis points. I mean, but then you get these anomaly buyers like we just closed yesterday at Chick-fil-A and Mission VA down in Orange County at a three 70 cap. That's an eight plus million deal. So you're still seeing these like anomaly buyers show up where, you know, call it beginning of 22, end of 21, you'd have three to five of those guys at that pricing. Now you've got one, right? Wow. Greg, you, uh, you look at them for sites. So we are absolutely a buyer, uh, in this market For sites, for existing properties. We are a buyer. We bought, uh, we closed on Rialto marketplace in August. Uh, we just closed on a 85,000 square foot shopping center in Northridge, uh, last month. Um, we, What was the nature of the seller? What was the description of the seller That's a private family Had to sell, Uh, did not have to sell, but uh, it was time for that property. Right? And, um, and so I think, uh, we are absolutely looking for land. Um, we're actually seeing a lot of, uh, deals that, uh, maybe someone who wasn't a full-time developer had put together and now they can't get construction financing. So construction financing has also contracted a lot. There's a lot fewer players in the market. It's a lot more expensive than it was. And um, and if you're, uh, not a professional developer, full-time professional developer and you're gonna end up with that construction financing for a much longer window, uh, than somebody like, like Paragon or Newmark Merrill companies is, it can be very dangerous. Right. With your capital partners and you have the source of money right there. So. Right. Alright, Brad, bring us home on this topic on the capital markets. First tell me, well, how big is your firm now? How many brokers do you have in your firm? Believe we're 11. And what's the split between leasing and sales? Uh, we have about six people that focus, I'm sorry. We have about six people that focus on leasing, uh, gentleman that focuses primarily on land. We have a gentleman who focuses on, uh, gas stations and car washes. Uh, we have a couple of, uh, brokers that focus on investment sales. And then I do whatever's interesting to me. We'll save that for another time. But, so the guys that are doing the investment sales, yeah. Tell me what they're experiencing, you know, expand on what you've heard on from the Yeah, I, I wanna offer a, I wanna offer maybe three comments. Um, one is that, that the actual property has never been more important than I think it is right now. You know, the factors such as le um, credit of the tenants or not credit of the tenants, uh, l lease terms, you know, length of lease terms, you know, ACC access. I mean, there's just a buyer because there's fewer buyers in the market, they get to be much more discerning and which is why there's a lot of product that's sitting. But if it checks a lot of boxes, there's pretty good buyer interest. So that was, that's one comment I'll offer. Um, second is we really have talked a bit about kind of the newer, sexier kind of strip centers, but I think that there's a real opportunity right now in these, um, multi-tenant retail centers that have, um, that are at, you know, buck 75, 2 bucks a square feet foot quality location and, and as, uh, leases expire, the ability to raise rents. Um, I think that there's a good bit of potential there. And I think that the market is, ironically, the sellers of those properties are generally holding onto those properties, which is, I I think a bit ironic because I think that they actually should be on the market right now if they have a desire to get out of the management intensive property and get into more of a single tenant type of a property. And then, um, and Cameron is in the audience cuz you, you just, your client just bought a property that we were marketing, um, and they assumed alone. And that's something that hasn't really happened a lot in the last 15 years, but the fact that now there's a bunch of people that locked in low debt, um, and if there's the ability to have that low debt assumed that makes the property much more marketable. And John, I don't know if you guys have been involved in some loan assumptions. Yeah, yeah. They take, they take a long time. Let me, it's Pretty rare though though that they have the ability to, to transfer. Oh, right. Well, no, not really. Not This was a, this was a li ours was a life insurance company and yeah, Cmbs life insurance, Siemens, some banks you can, you can, uh, you can assume existing debt. All right. We're starting to see more of that too on some, on listings. We have two, two properties in the market right now that have existing debt that's relatively attractive. And I agree with you, Brad. I think that there's an opportunity with these older centers as you're buy, not only are you buying them at rents that are, you know, half of the newly built stuff, you're buying 'em at half the replacement cost too and much higher yield. Like there's this, there's this, there's this disconnect in the market that if it's bright and shiny and new, you're gonna pay a premium for it. And then if it's not, you're gonna, you're gonna whack it on price. I mean, and there's a spread of, you know, a hundred to 150 basis points on cap rate between those two. If they were sitting right next door to each other where one had one was chock full of credit tenants or brand name tenants and the other one had maybe had a couple and then rest mom and pops, that one that's, that has a couple of, you know, creditor brand name tenants and mom and pops is gonna trade a a hundred, you know, 50 basis points, minimum higher in cap rate. It maybe could be as wide as a hundred and much lower price per square foot. So I think there's an opportunity for them there for those That where you finished. Did you have that? Just thought, well, you know, we're, we're running out of time. I just want to, before we ask the audience, was there any other issues retail affecting the Inland Empire, uh, that we haven't covered that you think are important to, uh, mention to the audience? I think we got 'em all that we had talked about. Uh, any questions from the audience? Got some experts here. So, so I really like your question cuz I've been, Fred, hold The question, if you didn't hear it from back there is a question about dealing with the, uh, mixed use properties when you have retail on the ground floor, overcoming some of the challenges of that. Right. So I really liked your question because I've been spending a lot of time thinking about this because Claremont, Montclair, Upland Ranch, Cucamonga, Redlands, I mean those are at least a short list of communities that I know have projects that are going just like that. And the problem is that, that the multi-family developers are so focused on the multi-family that they frequently don't understand how the retail works. So they don't think about Greece intercepts, they don't think about parking, they don't think about how are we gonna allocate commonary, you know, commonary charges. How are we gonna make sure that there's proper trash removal? So one of the things for those, some of you know that I like to write a blog and I think that there's a blog that's gonna be coming out in the near future about, uh, all of the problems with mixed use and it's gonna be a collective effort because the, the demand for the re the retailer demand is there so long as you don't, so long as you design it properly. Um, and I'm sure you guys Greg are getting ahead of that because I imagine some of your projects are, are, uh, a part of something that's mixed a hundred percent Sure. And, and, uh, a hundred percent the multi-family developer by and large doesn't understand retail. And so we have a couple mixed use projects that we're, we're working on. One of 'em is with a hotel, um, and it's just, it's funny to see how differently we think about those spaces. The other problem with it though is that the cost of construction on that space is so high that even if we're successful in leasing it, a lot of times it is still a loss leader for the project. So that's something that we don't talk about, but you go and add in, uh, extra parking for it, you go and add in those shafts for the hood lines, you add the grease interceptors in, you are still losing money on that portion of the project. Even if it leases well Be a, Well I think it is, but it's less of a philosophy. Build it properly to Brad's Client and, and what a great amenity right to your project if you have the right mix of tenants below. Because who wouldn't want to be in the building where you can get a bunch of your, your daily needs taken care of? I, I don't agree that national tenants won't go into that space cuz you can, if you go to any urban market, you see it all the time. It's just they won't go there if it's the space isn't designed properly, they don't have adequate parking access, all of those, those types of items. But the Chipotle's and the Paneras and the Dun dun, you know, the Starbucks and the Dunking Donuts, they'll gladly go there if it's the right if, if they can, if they can conduct business successfully. And that's the key. And I think Brad's, Brad parking keeps on coming up and I do think that that's the, the one thing that most multifamily developers do most wrong in, in retail. Well that's what I, that that's why you do it. Visibility, signage, access, all of these things. And sometimes, sometimes honestly, a great multi-family site is not a wonderful, uh, retail site. I think, um, that's, that's the biggest issue. And I think a lot of times we see cities pushing retail that um, you know, it's a great amenity to the building, but it might not be, uh, the most feasible retail for the customer base outside of the building. A lot of times it's the cams are triple nets on these buildings for those tenants are significantly high traditional retail. Absolutely. Great conversation, great questions. Continue it afterwards with these guys. Let's give a round of applause For the retail guys. Jennifer, Todd, John, Greg.