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Hey, Welcome to this next episode of Commercial Real Estate Talk with Steven Arne, uh, where we have what we hope to be very interesting and compelling conversations with top leaders in the commercial real estate industry. And I'm super excited about this show 'cause our guest fits that bill, uh, major property, major multifamily property owner, uh, throughout California, and now the East Coast, Henry Maner Chairman, and CEO of Universe Holdings. But before we bring in Henry L let me tell you, let us tell you about a little bit about us, the co-host, and about our show and our sponsor. So lemme bring in Arnie Garfinkle, my co-host. Hey, Arnie, how you doing today, buddy? How you doing, Steve? Good, good. Spring is in the air. I know you're Busy These days. Keeping busy, keeping busy. So anyway, the All Star Group is a commercial real estate lending company. Uh, that's how we started. We're doing a lot more in conferences and conference producing. Uh, the focus is mainly commercial real estate. Uh, we do our annual commercial real estate lending conference, which is coming up April 18th in Long Beach at the Western Long Beach. And you could submit loans live to our panel of 15 lenders, and they compete for the loan. That's what makes it very interesting. But we also produce events for others. We produce events for rent tv. We do one for the Click Conference, which is a, uh, uh, conference for the hospitality industry. Believe me, we're busy. But, uh, anyway, tell us a little bit more about Rent TV and you, Steve. Well, thank you, Arnie. I'm Steve Bloom, founder and, uh, chairman, CEO of rent tv.com, our 25-year-old news and media business for the commercial real estate industry. Many of you know our website covering news and our email newsletter covering news on a daily basis throughout California and the Western us. Uh, we also put on our events, uh, which is coming up our state of the market conference for Orange County at the Irvine Company's venue facility at Spectrum Terrace. We have s covering office, retail, multifamily, industrial, and finance. Still time to sign up. It's next Thursday. Uh, we own the website, sublease.com, and we also created this video platform, the review, where you are watching this video, uh, which is growing, uh, exponentially. Uh, so with that said, uh, we have other business to conduct. We have some three great sponsors that make these shows happen, so we want to tell you about them. Uh, the first one is commercial real estate inspectors in Southern California. Their skilled inspectors provide critically needed information in easily understood terms, as well as inexpensive and simple solutions. Whenever possible, let commercial real estate inspectors help you protect your deal. Call Tiffany Simington name is on the screen, and book your next inspection today. 8 1 8 9 5 7 4 6 5 4 8 1 8 9 5 7 4 6 5 4. Who's next? Arnie. Our next sponsor is Fidelity Mortgage Lenders. Fidelity is a private lending company specializing in commercial real estate, founded in 1971 by Chuck Shon. It is known for its unique terms, fast funding, no prepayment penalty, 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. Excellent. Arnie, next up is Paramount property tax appeal with inflation causing cap rates to increase and 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. Call West Nichols with Paramount Property tax Appeal at 8 5 8 7 5 8 9 5 1 5. West Nichols, 8 5 8 7 5 8 9 5 1 5. Great sponsors, Arnie, but, and anything, even greater guest coming up. That's right, Henry man. Henry Chairman, CEO of Universe Holdings. Good afternoon, Henry. How are you Gentlemen? How are you? We're excited about this. Uh, we got a lot of questions for you. We're gonna get through a lot of business stuff and then we'll get into some personal stuff as well. So why don't you start? Yeah, we got a lot to cover. Thank you again, Henry. Great seeing you again. Great for doing all, you know, grateful for all the panels you've done with us over the years. So good to do this, uh, more intensive interview with you to learn more about you. Um, so let, let me start. Let's, why don't you, uh, give our audience an overview of Universe Holdings. Any other businesses, you know, related businesses you may be involved in? You know, things we'd like to, you know, general stuff like portfolio size, geography guiding principles. Yeah. Okay, great. So, uh, I started in real estate approximately 37 years ago in my, uh, college date. I started actually my junior year working at a small real estate firm and got my agent's license and basically, uh, dabbled in it before I graduated Cal State Northridge with degree finance real estate. And, uh, I even got a board of Real real estate award for writing the best essay back in 19 3 84. It was a $500 scholarship. Wow. I was so proud of it. I, I told my family back then, this a little guy, you know, come to write a essay and give a presentation to a board. I was like, kind of like 110. I was the one who won it. And, uh, they asked me, uh, at this interview like, you know what you want do? I said, I wanna become a broker about the business. And, uh, at the same time, I, I wanted be a big owner one. And, uh, and I said it with such conviction. There was this Jewish lady on the board, I sort her name re but you know, we loved that, you know, such conviction. It's a young man. So I knew I was gonna win it back. So that, that was it. And I set my vision and eyes on getting that done. And, uh, I started in brokerage, uh, working at a small firm. And then when I graduated college ca North in 1985, I said, where is the best place that I can go work and learn the, the business? I wanna go to the number one third. I don't want to go to some mediocre shop. And I talking to you guys, you know, there's a place called Marcus and Millichap. It's really like a bootcamp. And, uh, they, they working really hard and they teach you everything. And it's like a commando training center. And this is where the best of the best goes. These guys are really good, but they're really tough. So I said, okay. They Were known for bringing in a lot of young people, you know, young. Yeah. Fresh blood and training, right? They were. So I was, yeah, I was 22 years old, you know, I was a fire in my belly. I was, I had a ton of ambition I wanted to succeed and, you know, said, so I went for an interview and, uh, it went really well. And it was this young guy, his name was Patrick Omo, a blessed memory. And he said, you know, uh, you're gonna come here. You're gonna blossom like a flower, you know, come join us. What? I said, pretty invitation. So I went on board and, uh, basically, uh, joined in and we have fantastic training program in Orange County Research. So many memories back. And, uh, uh, I, I started working there and didn't make any money for like 12, 13 months. It was terrible. Just kept making cold calls and, uh, you know, getting by the principles. I think I went to hundred meetings my first year, put like 50,000 on month card. Did you have a specific geographic area that you focused on? Yeah, I was, uh, I was working in the valley. It was like Northridge, which was in my market area back then. So I, I struggled with that. And, uh, and like, maybe you should leave, you know, this isn't happening. And, you know, Harvey Green Will, uh, was very fond of. Yeah. Uh, he said, you know what, I'm gonna hang on to you and, uh, you know, we've gotta give you another shot. Make it happen. So I put my head down, said, I don't think anybody has to say I'm gonna make it. And, uh, you know, by the 13th month, I closed my first year and, and, uh, there was a good career start. What about from there? I went on tore 15 years. I was there for 15 years. Big, probably a billion dollars worth of deals, which is a big number back then. Today's not a big number, but it was back then. And we learned the trade. I was around a lot of, uh, different clients, high net worth families, individuals, institutions, foreign investors, pension funds, the whole works and dabbled in multifamily. I did shopping centers, I did industrial buildings. I sold a couple of hotels. Uh, I sold a number of office buildings. So I really learned the trade and, uh, became very good contract negotiation and the whole closing process and financing and, and all that. And I read avidly. And then, and then I saw, uh, in the 93, 94 period where the RTC uh, RO days started, which I, we probably never seen. Never say never. Right. And you were pedaling these deals. Uh, at that time, clients had 20,000, the door, 30,000 the door. And sometimes were like, this is incredible. You know, 80% financing, 20% down, cost savings, home savings, you know, 20% cash on cash type deals. And, uh, and some clients I would go see, say, you know, this is not good enough for me, 20% cash. I said, I'm, I'm, unless are you serious? I said, well, you know, if you don't wanna buy this, I would buy it. He says, well, you can't buy it because if you could buy, it would be broken. I said, you wanna make it back. So, uh, so I got so mad that, you know, these guys were making fun of me. And, uh, I said, wait a second. I know, I know this game probably better than they do. I'm just younger, right? How many, how many less smart than they are, and have a determination. So, uh, I put my first PitchBook together, I bought a 1600 building. It was mainly family. I, I think I had to raise $120,000, which was, uh, you know, in your friends And family you said, Huh? Yeah, friends and family. Friends and family. Just Friends, family with my brothers, my, my, my, my mom, my father. So this real estate deal. And, you know, I had a whole weekend to raise the money. And, But you said you were always planning on being an owner even when you were started brokerage, right? So you always had that in your So that was, yeah. That was in your belly at the Time. So, so I mean, I had, it happened finally, I think, well, You saw the opportunity, right? To jump on that RTC situation, The brokerage cycle. I started buying and I did for four years. I still did both. I did brokerage and I did this indication. And finally I said, you know, uh, I don't want to do brokerage anymore. Although very successful at it. And I'm grateful to market and road chef, and all the people who mentored me and all the friends, uh, who were there, I said, you know, I gotta go. I can, I went to regional manager's office at that time. I said, you know, it's not for me to grow because I think I can buy an own three, 4,000 units, uh, in, in a few years. And they're like, okay, do you really believe that? I said, I do. So I gave my notice and, uh, opened up our office, uh, 23 years, 24 years ago. Uh, and we And how did, how did you come up with the name universe? How did, uh, where did that name come from? Yeah. Uh, my father, uh, uh, a blessed memory. Uh, he had a very broad vision at that time. He was in a textile business. And then their company was called Univers Textile. 'cause he believed in a universal vision, Uhhuh. And he also believed in doing business in many countries. He did business in many countries, in fact, in our home country in Iran. And he was a distributor. And they brought merchandise from all over the world, and they were distributed. So we had this global vision. So our decided to name our management company to global integrity. Real, because why? Integrity? Because I noticed that what clients value most when you went to see them was a, that you could produce, you could close your deal, you deliver and be integrity and integrity. You know, people thought that broker back, you know, not everyone, but you know, people thought that, you know, most brokers have integrity. So I built the firm on that basis. And I said, you know, uh, I go to my father's vision. I said, we're gonna call the principal company univers holders. And the idea was to do business across the US one day, which we are doing today. And the idea was to go global one day, which we are doing today. Today we're doing business in two countries. You know, we have properties in Israel place I love and cherish and admire. I go to four, five times a year and have kids now working with me. We have an office in Miami with two, my son. There's another son, uh, in New York. And, uh, we have a, I have a son-in-Law, actually in Israel. So, uh, it's still not huge compared to a lot of guys, but, uh, a lot bigger than a lot of other people. You're, you're doing quite well, I wouldn't say, but I'm gonna, I wanna ask, I wanna take you back to one thing. Which association of Realtors did you submit that essay to? The San Fernando Valley Board of Realtors. South Southland Region. Yeah. On, on Val Goa Boulevard. I still remember the interview. No, no. I guess, uh, 'cause I'm a member of the board there. Oh, okay. So I, I, I had a feeling it was the, the same one, because they're probably one of the most active, uh, realtor associations or all of California. Right. So, uh, it's very interesting. I didn't even know they did that back then. I don't know if they still do that. Right. And, uh, and one of the things at the time when Marcus Mocha was, I wanna talk about this because I'm looking at myself. Yeah. The screen here is, uh, and in those days at Mark Mocha, there was no such thing as No, no, no tie, no suit. Everybody had common in a suit. Yes. Oh, look at us. They, they, they even made wear white shirts. I, I still remember this. And, and a nice tie. So I got into this, and, uh, when I started the company here 24 years ago, I made a, uh, rule that whoever works here, we have 22 people in this office today. Uh, we still wear our suits. We still wear our ties, and we dress up and people compete here who's know the best well dressed man or woman of the day. And, uh, you know, I, I can respect that Henry. 'cause I'm no, You know, In New York City, and I, you know, I was gonna put on the suit and tie, but then my audience, they just, You know, it's funny you say that because my father-in-Law, may rest in peace, was that way. He had that same old school, you know, he, he owned a steel company and, and I had my office inside his building and in the real estate business back, you know, you would come in, you know, like if you aren't meeting clients, it was really, so I come in somewhat casual, and he would say to me, he goes, if you're gonna work in this, if you're gonna be in this building, you gotta wear a suit and tie every day. And I did. You gotta respect that. So, yeah. Yeah. We still have a casual Friday here. Right. But casual means you can't wear loafers. You can't wear blue jeans or T-shirts. You still gotta dress stylish. Right. Business casual. Yes. You know, I, I didn't dress up with this. Uh, this is how we come to work every day. And, you know, synagogue, I go to synagogue and I, I pray with dominion every day, you know, morning at night and afternoon, you know, I'm in front of God. So in front of the king, you gotta dress for the king. You can't just That's true. You go see, uh, president Biden, or President Trump, or you know, Putin or, or whatever you want, whoever. You don't go down your Bluetooth, you know, you dress appropriately. Exactly. Yeah. And you feel more powerful. It's a great, It's a great culture. And, and, and young people would be amazed to hear this, that today, you know, when you appear in front of people dressed up, because 95% of the people are not dressed up. It really makes the impression on people, people that you gotta choose. Well, what about yourself? You dressed for the occasion. You are, you are. Right. Let Me, uh, and let me set the table a little bit. So now we were talking about the, the launching universe. And now Propel 30 years, right? Mid nineties, 30 years ahead. 30 years. So where, where is it now in terms of, uh, portfolio size, number of properties and units and, and geographic scope? Yeah, I mean, today we've done about two and a half million worth of transactions. It is on our website. We are, we've got 120 transactions. We are in 12 mar uh, 12 different markets. Uh, three different states. We are in Florida, we are in New Jersey, and we are all in California. Uh, we also are another, a country in Israel. So our portfolio is, uh, just around 1.5 billion today. Or probably with the market down, probably investing that for probably like 1.2 billion. And, uh, you know, it's like a, it's like a moon. Like a moon. It waxes and it way, you know, because we're selling, we're buying, uh, you know, there's lot going on. And, uh, up to recently, the past couple years, we were not really a seller. We were more of a long term holder. The game was buy, add value, refinance, and then add value again and refinance again. Three, five. So there's deals we have here today, which we refinanced eight times. And, uh, I'm just looking at some, some at a table. We did for one of our long-term investors. And I just couldn't believe my eyes with some of these deals, these guys made 15 to 20 times more than the money they put in you going back to 10, 15, 20, 30 years ago. So it's amazing this multiplier effect that real estate has. You don't notice it when you do it every day 'cause you are in it, right? Yeah. But when you sit back and say, okay, let's just see what, what we did for this investor and, and for this institution, and you go back decades, you see crazy results. Henry, let me ask you what, I mean, you've done a lot of transactions. Which one stands out in your mind as the one that got you to where you wanted to be? There's gotta be a project that you go back to and go, that's the one I remember when I left, uh, brokerage 24 years ago, I had only 400 units. And, uh, and that year was the year 2000. And, uh, I had to prove to myself being, uh, intoxicated on commission income. And, and we still a family. I think back then we had three or four kids. Mm-Hmm. Uh, a lot more to say. A lot more grandkids we get. And, uh, there was a big not to crack. And I said, you know, I had enough money where I could support my overhead, but I said, you know, I need more. So I said, my, my magic mark or goal was to get to a thousand moves. So 2000, we bought, uh, a 450 unit building in, uh, Carlsbad, San Diego, which was our first four into that market. Uhhuh at that same back, uh, that happened 2000 1 0 2 actually. And with that deal, that deal changed the company. It took us to a whole different level. We broke a thousand million mark and went over that. And pretty quickly we realized that it's just as much work to run four 50 units versus running 10 units or 20 units. Yeah. Right. It's a lot more profitable. And, uh, and I would get in the car drive to San Diego two hours, either the whole day, uh, oversee the renovation, oversee the staffing, hiring, firing the people strategy, how we get back at home at night. 10 o'clock just went on like couple days. And I still do it. I don't, I don't do it to that extent because I have really great people now who Right. Worked together for the last few years. They really fantastic thing. Ally, do you Still own that asset? No, we sold that and, and, uh, did extremely well. Right. Uh, made a lot of profit. And then that led to a 369 purchase in, uh, in San Diego, 30 Mesa. Then we bought another couple hundred units in La Mesa, and then we went to in an empire. And that was really the game changer that, that got us over, over that hump. But I still been at that time, very involved in la People don't understand this, but, uh, compared to other markets, it was very hard to scale the business just from Los Angeles. So the average unit size only about 19 per, per apartment. Right. So we loved that, that back then, and we stuck with it. And we still kept buying the small stuff. Right. 30 units, 40 units, the 50 unit. But, uh, we realized, uh, I think it took me a number of years to really see this because being sort of br and taught the George Markets philosophy, investment, and or following ethics, the companies I still admire, we a lot of ethics. Sure. Uh, they, you know, they refused to leave California. They, you know, they, they, they still believe in Seattle and there are billions and billions of dollars. I mean, at one, at some point I think had over 70,000. But, and they, uh, so I stuck with that philosophy where there was barriers to entry where you would go very hard to build and you go to supply from Spain markets. So for that reason, we didn't buy outside of California for a long time. But, uh, three, four years ago when Covid started, and I realized that if I wanted to scale the company and take it to 10, 20, 30, 40,000 units, you know, Godwin one day soon, and I think it's coming. Uh, we can't do it just being here. So we started to buy New Jersey, started to deploy it up where the average unit size is 300 units. You know, it's not 19. So that's, uh, the scaling came in. And then, uh, basically, uh, with less regulation, uh, being a better, better legislative environment, you know, being a red state, although jersey's not a red state, but the fundamentals are very good. So we started to follow fundamentals and, uh, you know, sort of still stating that we haven't bought in Texas yet. We haven't bought in Phoenix yet. We, we've been looking, and thank God we didn't buy in the last two, three years. 'cause we would've paid, we paid after what's happened with rates and how value we adjusted. So, uh, uh, you know, we try our best. Right. All right. Well, I wanna shift, uh, I want to skip back a little bit. 'cause we were talking about the deal that made, you know, when you look back on that took you to the next level. We always find some of the good stories and some of the best lessons are from, uh, you know, looking at the deals that after you got into it, you wish you took the hook out and threw it back into the water. Can you, uh, share with us any of those stories? Gimme some more color. Well, a a deal you bought that, that you wish you hadn't after you bought it. Yeah. Yes. I wish I had. Yeah, I basically, uh, there was one for, we, uh, a friend of mine, a very close friend of mine, was building a massive project in Las Vegas, uh, back in 2005 60, which was the higher market. And he invited us, my wife and I, to the grand opening of this massive furniture Mark called the Wood Market Center at the time. And, uh, I'd been to Vegas casually and uh, uh, I saw this got really affected by it. And I had sold the San Diego building back then, and we had a 10 31 exchange. So we said, you know what, lemme go through some properties here in Vegas, which we did. Uh, long story short, we bought a 300 plus unit deal there. And, uh, I realized very quickly as the market started to turn that this was not, this is not what we should have been. And, uh, I remember my wife telling me that you shouldn't really be in this market. I said, why, why do you tell me this honey? Now why something? Where were you before? Uh, and, and, and, and I, and I called, uh, one of my trusted rabbis who I thought to this very day, he's in, uh, you know, early eighties, very, very wise. And he said, don't buy them. There'll be no blessing that market. And, uh, by then we were hard. I didn't listen, we closed. And, uh, you know, things did not work out well with that deal. And, uh, we, I decided that, you know what, never, ever again do I want to be in that market. It's not for me. Maybe this is something spiritual. Uh, not everybody has mole or good luck in a certain market, right? But what, what, what was it? Very fundamentals that I had been bred with, which was supply constraint part to build, et cetera. We got away from it because in that market, none of that existed. And it was at the height and, you know, it was, it was this boom and bus markets right. And went up and the kids came right down. So I said, I, you know, we're not, we're gonna get away from that. We're gonna go back to fundamentals. Right. So let's, let's talk about fundamentals. Wait, hold on one sec, car. No, no, no. Let me, let me get into this, this point. Let's, uh, because when you're looking at a project and you're looking at a new project, what do you go through to decide how I wanna get, get involved in this one? What are you looking at? What, what, what's the process that Henry goes through to say, this is the next one? First of all, when we buy a deal, we have to, uh, be convinced that there is a story. Everything is like a storybook. Uh, what is the story? What's the motivation of the seller? How long have they owned it? Why are they selling? And what can I do that they did not do? Mm-Hmm. So that's, that's a number thing we ask ourselves. We don't have a story that we can't sell that deal to our investors. We need to have the proper conviction that this is gonna do well because we just don't need to do another deal for the hell of doing another deal. So we can have a chunk of, you know, thousands of units. That's not the idea at all. So, uh, that's the number, that's the number one key requisite. Number two is really driving the real estate, getting out of the car, walking around, seeing the neighborhood going there at night. Not, not at six, but at nine or 10:00 PM going there early in the morning, watching the foot traffic, people coming and going, obviously diving into CoStar and, uh, ax access and all the fantastic tools are available today, day and age. And really starting the trends and doing a lot of research and developing that first condition. And really, uh, following your gut. A lot of us are gifted with a tremendous six sense gut instinct. And, uh, my best advice is, you know, for younger people watching, for guys my age or older who've done it for eons and neons that don't go against your gut. So a lot of times the gut feeling and you know, sometimes when you have a property tied up and you find new information, you have to decide if you gonna walk, have grace will exit. And always that he want time. Are you gonna come back and say, you know what, uh, I'm over paying for this and because of what things I've found I need to look at price adjuster. And uh, you know, sometimes it's hard to do that 'cause you've already been knee deep in the deal. You spend 50, a hundred thousand dollars in diligence. Uh, it's better a to go back and see if we can make it work. If not, it's better to just come out. So, so let me follow up on that. Do you get really deep into, you know, all the costs and all the revenue going five, 10 years in different scenarios and then get a return on equity or an IRR and, and then try to play with it a little bit to make the numbers work a little bit more? Do you get caught up like that? Or is it more of a, of like you said, that gut thing? Do you, I mean, you know, sometimes we see people say, all right, for this fund we, it has to show a 15 IRR, for instance. And if we don't make that play with the numbers enough, we say no, or Yeah. Or do you see an upside in that area where some of that stuff doesn't really matter? Right. Yeah. Uh, I mean, working, uh, and having institutional partners, it is in a sense, it's gonna be big blessing because these guys or these ladies, whatever you wanna call mm-Hmm. They don't have any emotions. It's hard raw numbers. They look at data, uh, they don't wanna lose their jobs. They want to be safe. So we've learned from them, uh, to really follow that mentality of really looking at the hard numbers. But many times we've done deals with and did not wanna come in, we did with private capital or with our own money, or a combination of it, the two. And we were right, because, uh, you can't predict every trend and every demographic, demographic trend or cycle unless you get out of your office, you get off your desk and you go knock, you know, you go knock on doors and you, and you find the facts. So, you know, then we have done views based on a gut feeling before having good data where some of, maybe some of the deal sense we had is not shown the data. Right. But what we gotta avoid ourselves from doing is getting emotionally involved in the deal. Yeah. And, uh, and, and doing something that doesn't make any sense. That's a real decision to be able to stop and say, you know what, this doesn't make any sense. Now when you do a deal, uh, and I know you have background with B of A, 'cause you, you worked, uh, in, in, in some capacity with them. How do you finance the deals? Or do you just do pure equity? Uh, everything we've done in the last, uh, 13, 14 years has been 90%, probably 80% ready. Uh, the lesson we learned from the 2009 market meltdown or the great recession was no leverage. So what, whatever I, I bought since 2009, 10 has been very leverage anywhere from, believe it or not, 35% LTV to no more than 60. Yeah. And, and we, we've stayed away from that. I'll come back to the lesson we learned from this cycle, which is a whole other weird cycle. Nobody ever see the, like this one, uh, we, we spent a time on that. Uh, but, but, uh, with that, with that mindset, then we go, we raise all the money either privately from a high net worth family office, friend of family, or call rich guy, rich people like of word. Uh, and then we show to our institutional partners so many times a combination of, uh, you know, 50 institutional 50, private 90 10, uh, 90 institutional, 10 private. And, uh, we've also successfully deployed, been able to use, uh, prefer equity has been, you know, a good Yeah. Some of the value relationships we've had. And, uh, it is good to have crucial partners because they have weekly or bimonthly calls with us. They, they, they read everything and there's another set of eyes watching you. And I don't mind that. Right. No, that's always good because, you know, helps Keeps me accountable, it keeps my staff accountable. And we are, we are, we are held to high standards. Right. And, and it's good to have that, you know, versus a deal that just your money and, you know, No, and, and you know, I'm in the lending field, so, you know, uh, when we're looking at a transaction, a lot of times we're looking at it to make sure that the property's gonna earn an income. And sometimes the lenders are looked at as the bad guy. Well, no, we're not. We're another set of eyes for you to figure out a way to make sure you don't, you're not missing something. We wanna make sure you could pay us back on the loan. So, you know, I, I get it. I totally get it. Now with interest rates, right now, things are adjusting a little bit. So how, how are you handling that? Or are you just kind of cooling back a little bit? Yeah, I think, uh, I'll summarize it as such. I don't ever remember seeing great real estate fundamentals in multifamily. Forget about office. That's a whole disaster. Yeah, that's, Yeah. But let's, and, and we, retail is pretty good right now. Let's talk industrial is wonderful. So our data center, and so our hotels after the pandemic, but talk about raw multifamily today, the fundamentals are very strong, you know, minimal concessions if none in Southern California we have zero inventory. We have some employed, yeah. Uh, zero Israel, uh, people fight over stuff there. But, uh, but, but best occupancy, best rank growth. We, we had, and everybody's talked about a research on 17 now, 17, 17 times now, the past three years. And we haven't had a research Yeah. Been really, really good because there's so much stimulus money, the economies built, there's still $10 trillion trickling through. And we have, and we haven't seen, you know, the end of it yet. But in this cycle, with all this debt maturing, and with all the people who went out in the great brilliance, particularly institutions and social partners who were pushing us 3, 4, 5 years ago, let's go get a debt fund deal. You know, we wanna lever up, we wanna, uh, we gotta juice up that IR mm-Hmm. And, uh, we did that once, uh, on two deals. And thank God we got out right before the pandemic. And, uh, we made some money. We didn't lose any money. 10, I said, never ever again do I want to be involved with the three year debt fund execution on rivalry type deal. And we saw, looked at, uh, many deals in Phoenix back in 2000, 20 1022, darling, everything was going same in Florida. Friends were going 20, 21% a year. We sat in our conference room, meet couple of the analysts guys who work with me on, on the operation side. And we said, you know, this just can't lapse. Yeah. Rates can't go 0.1%. And I said, what is this 85% leverage with the three views? And okay, oh, the rate is three and a half, today is two and a half. I said, well, what if, what if rates go up? Sure enough, that happened. Yep. It's happened today. And you know, thank God 95% of our portfolio is on fixed rate debt with no imminent, immature. We have some stuff maturing in 2020 6, 27, 28, but, but our leverage is so low, we're not really worried about it. But we had, we do have a couple of properties that luckily enough have rate caps on them. So we are insured against the rising rates. But this challenge and this cycle has been, those rate cap reserves have gone up 10 times. You know, it used to be 38,000 a month by a $42 million loan. Today is 120,000. So, you know, your cash flows getting trapped, sitting with the lender, millions and millions of dollars. You can't really do anything about it. And all you have to do is try break Almighty Corporation to come down or for the fed, you know, to, to change their mind. And, uh, it's tough, you know, even though we're not really losing any money, we'll sort of be forced to put money into a savings account that, that sits the lender to buy the, the next rate cap. And, uh, that, that, the lesson I learned from this cycle is the problem, you know, in the last down cycle, if you are in trouble on a property, you could restructure with a lender or go get a new loan, you could borrow in 2000 8, 9, 10 at four and a half, 5%. Right. Today you can't, it's gonna be like almost 5, 7, 6, 6 and a half. And then you have these regional banks basically out of business. You know, they're not, they're not really initiating loans. Yeah. So the, the lesson we there is that never, ever again borrow on a valuable basis. You know, go lock up that debt, throw the keys away, get a 10 year loan fixed five years of io, get a 20 year loan, a 30 year loan. Yeah. The longer to the term the least you're locked in. Right. And don't, and don't get stuck with this stuff because, well, lemme Ask you a couple, Most guys I talked to my age or even older I, me, they've never seen this. It is like a whole new phenomenon. Um, so with each deal, um, is each deal a different partnership then for, uh, where universe is part of it and then you have the other partners as part of the deal? Everything we've done up to now, uh, has been on a one-off basis. We have done one fund, uh, that bought five specified properties. We're about to hopefully launch another fund for buying start opportunities in the market, but everything's on a one off basis. And we basically tied it up and, uh, put up our own cash raise money for our Right. The family office side and also from, from our Probably gets easier raising the money. It's a lot of work. Ra raising the money, I'm sure for each, I call it getting back on the treadmill. Right. Right. So, so then how do you, do you ever sell properties and and how does that, what, what, what's the trigger for the decision to sell If we sell something? Uh, is because we don't like a trend in the market. You know, we, I sold a portfolio of nine properties in LA last year and the year before, and it's probably the best thing we ever did because our rates were gonna go variable a b these were properties in LA and I saw the writing on the wall with, uh, this horrific left wing limited behavior from, from, from legislators where these covid restrictions came in. And, you know, we could raise rent for four years and basically the government gave tenants a license to steal money. Right. You know, you don't have, what is that? Don't have to pay the rent. I go to a grocery store. Well, I can't use in California. I can just walk out and not pay. Right. $900. So, so don all, so, so it's an upside down world. It doesn't make any sense. And, and we said, you know, watching and seeing the New York playbook, how Manhattan and the boroughs went through this and overnight, uh, even renting vacant units, you couldn't rent and market anymore. You have to go back on the rent control. We said this could happen here. And this guy Weinstein has tried. Now how many times he's back at it again, this is, you know, Weinstein, uh, 0.3, 0.4, I don't know. Yeah. Yeah. He keeps trying to, yeah. So, So, so what if that happens? And, and, and then we sold, uh, a building that, uh, recently one of our 11 buildings on the market closed in Englewood. We have more, we're selling, uh, you know, we have blown up basis and we have a sewer debt. If you have a sew book today, you can sell a good price if you don't have a, well, Englewood, inglewood's a hot market right now because of all the stuff going on there. So you bought in there at the right time. You bought the right time. But, but the strategy has changed because we had a philosophy back then to group a lot of small buildings. Right. You had a portfolio down there, right? Yeah. Yeah. And uh, and today we've run much larger and much more, uh, institutional I guess. And we figured that it's better to own a big property, you know, three, 400 units or a hundred plus and have, uh, you know, enough people there. And then if you wanna buy the smaller property, we could buy around that one central location. And that's what we've done. So we've been getting out of these smaller properties and we're exchanging into larger assets and we're going through different models. But you're still, would you still buy in California? I mean, we hear, we still hear from people that say, if you own here, 'cause it's so supply constrained, even with all the issues, it's still in the long run a great asset if you manage it. Right. Yeah. Uh, in LA we've stayed away for the last two years. I think I bought one dealer in LA about two years ago. That was the last one. But we are very bullish on San Diego. We love Orange County. I love L Empire, like very much county is are darling, you know, Santa Barbara County, Santa Maria County, even Northern California today. We think it's a good spot to go to. Not the radical cities like Berkeley, Oakland, San Francisco, where there's homelessness and bad fundamentals, but other parts Knownorthern, California barrier where rent got beat up because of Covid and they're way on the market and covered yet. So we still believe in the rest of California. So when you sell, it's really not because there's something in the original, uh, partnership that said, all right, we've hit this return, we hold it for this many years, or something like that. It's more about opportunity. Yeah. What you see in the market. Uh, I think it sounds like he even goes by his gut too. It's just, just, I don't get a feeling this is gonna continue and it's time to get out. That's, that's what I'm sensing. And, and we were gonna talk to you about markets, you know, that you're looking into. I think you've, you've delved into that a bit with your decision making process and why you're looking outside of California. But I wanna circle back on something you said because the reason why Vegas didn't work, don't you see some of the similarities with the Phoenix and Arizona market? The Phoenix and GoTo market for as long as I remember doing this for 37 years again, uh, was a boom and bust. Right. But after Covid, it really changed. So many industries moved there. So many people left Ca, California and New York. And uh, then New York is all pointed to Miami. Yeah. Uh, and uh, a lot of Californias went to, uh, went to either Colorado or, or Atlantic. Phoenix. So, uh, today is, it is somewhat supply constrained, but not really. You was still built there and uh Right. That was always the, the, the rub against Arizona. Right, right. Arizona, the bus, some of my, some of my wonderful great, very, very smart friends have bought there and I think they're gonna be okay, but probably now is a good time to go in there. Right. Okay. It's, you know, the fundamentals, uh, are not weren quite there. I think a lot of people overpaid and there's opportunity, but Phoenix is not gonna die this time. Yeah, right. It's really changed. Yeah. Nice. Okay. Well, Another question I have for you is, you know, uh, in terms of rental rates, cap rates, you know, in the markets that you're in, where do you see those moving? Where are they now for, you know, traditional one or two bedroom, you know, your, your benchmark, you know, in, in the different markets and and where do you see them going? I think the average rent in every market we've been in is right around $2,000. Uh, we've seen that total across of country. We don't really have that many units that are high price. And by that I mean, you know, five, 6,000 a month, 20,000 a month. We don't have any of that. But, uh, another thing that changed is our philosophy is the last two deals we bought and, uh, we're about to sign a contract on a major transaction, God willing to suite on the East coast. And that's several hundred units that's newer there. So the last two, three we bought this one, we're buying another one that we're working on also locally here in Southern California. These are newer properties. So our new model is we wanna buy 10 years old or young or so we're, we're getting away from the sixties product, the seventies product, even the eighties product. Yeah. We've done that, You know, more, we're now more the core to call it four plus space with some notion of you better manage, Do you do any ground up or you try to buy something and then kind of We haven't yet. Uh, it's a long time to say yet because of the amount of risk. And, uh, you look around today, there's a ton of stuff on the construction, but a lot of it's not gonna get finished. And a lot of it's gonna get proposed. I mean, we already seen many of these deals blow up throughout, uh, Southern California because look, Look at, look at those projects in downtown LA with a tag all stuff by the, uh, um, yeah. I, I, I, I drove by there last night, uh, yeah. Going to Andrea concert and my wife and I showed the building to my wife and, and, and she says, why is the building look like that? I said, well honey, let's keep guessing. You know, you show any windows. No, what is all that stuff? That's what that paint graffiti. I said, you see this is, uh, this is what, almost a thousand units. Oh, It's massive, massive, massive. And uh, and there it is. And, and there's stuff like this in Orange County. So maybe guys who truly are skilled developers, they have crews, they could figure this out and make a lot of money. Or maybe in some cases it's better to just erase these buildings. Mm-Hmm. Right. Well that, that bleeds into the conversation. You know, I don't know if we'll don't have to touch on it much here 'cause I don't think you're involved in that much, but the transition of the office buildings, you know, in multifamily use is perhaps, you know, the, the cost involved in that, obviously it's active Reuse is the active Reuse. Yeah. Um, but one of the things I wanted to ask, uh, uh, of you, Henry, is, are are there stats that you really pay attention to? Like in terms of rent per square foot cap rates, you know, is that something that you, you, you pay close attention to? Or is it more, you know, the cash flow of the property and the, I Think, I think today the first thing we look at is can we get some receivable debt at the lower rate? That's number one. Golden. Look it two like the good old days. I like this term called price per pound. Mm-Hmm. If I can buy, like I bought my Florida the building class, a Tampa gorgeous building, late in the middle Equinox style gym, beautiful office, you know, Zen Garden, you know, coworking space, the dog park, you know, views all that. If I can buy it at 2 64 unit, but it's a four and a half to a five cap. So what long term buy the damn thing, you know, it is a good price per pound. So we still already trained in that decision. Looking at the price per pound. Price per foot. Yes, capital is important, but not as important if there's upside and if you're getting a good price per pound. Right. People always say it's the price you get in at, you know, that, that makes the difference in the end Still the focus is I wanna buy it below replacement. Exactly. No, you got, you've gotta wanna buy it. You gotta know you want that and you gotta feel comfortable about it. And, and you know, just everything we, we've heard so far is do your research and know what you're getting into and it's gonna be a good I investment for you and, and for your investors as well. Hey, let's start finding out a little bit more about Henry's personal life. I mean, uh, we, we, we could talk business forever, but I, I think we've covered most, most of what we needed to hear. Uh, is there anything else we haven't covered, Steve? Um, 'cause I wanna learn a little more about, You know, I think it's time too. I'll learn a little bit more about, uh, you know, what makes Henry tick. So, uh, something to shoot, shoot Out. So we, we know you were aggressive in, in college and, and that's got you into to the, uh, into the field. How big is your family? Um, how many kids, grandkids, uh, and what do you like to do when you're not sitting at the desk and in the suit and tie? Great. Uh, I wanna answer the question the following matter. Uh, I've been married to the same woman, thank God for 35 years. I'm just celebrated our anniversary. So in this day and age, female, congratulations. Decades, it's quite an accomplishment. So every day, and, uh, I attribute that as a huge success. Uh, I was just at a conference in Palm Beach, Florida, and we stayed at the Breakers Hotel, and that's a beautiful property. I love these old, yeah, nine, March 1920s. I own five of 'em actually in LA building we love. And I stayed there. I just stunned by this architecture. So I came to my rabbi, I said, you know, I went to this beautiful hotel. Here's a picture, take a look. He goes, you know what you learn from this said that, uh, great. Saying the same way that you have to up keep old buildings and make him look beautiful by putting a lot of money and time into them. It's the same thing have to do in marriage. You have to invest a lot of time. Uh, you have to invigorate it, you have to stimulate it, you have to put a lot of stuff, a lot of time, energy into it to keep it fresh and keep it great. So that's, you know, that's sort of a philosophy that we live by. Uh, you know, we are fortunate enough to have eight children, four boys, four girls, six are married, thank God. And today we have 15 grandchildren. Ah, and, uh, more on the way. Uh, and it's just the beginning. Congratulations. So, uh, you know, I, my wife keep telling me, get off the treadmill, you know, stop all this working hard, you know, crazy. This, that enough. I said, honey, they keep having kids. Who's gonna pay for it If I don't get, who's gonna pay for all this recurring expenses? So, so, uh, I guess, you know, we have, we have a lot to live for God, which is, it's a beautiful life. And, uh, I spend a lot of time with them now because they are in Miami, New York, Israel, and here in la. So we move around a lot just to be with them and, and, and spend time. And, uh, I'm not here for 14 hours in the office. I, I do work very hard, but I make it a point to exercise every day. I'm in the gym, playing tennis, two, three days a week. I swim vigorously. I run, I lift race, I speed, and I, I do it six, seven days a week, like clock. And I go to synagogue, uh, every day in the morning, in the evening and the afternoon. And I learn Torah an hour a day just to get my faculties fired up and, and, and to increase my wisdom. And I'm very involved in the Jewish community worldwide, not just La la I, I'm a board of, uh, a couple of synagogues, what we call, which are learning centers. We are heavily involved in doing Jewish outreach to, to make sure that young Jewish professionals meet each other. Jews married Jews, now they have children and they appreciate Judaism, and we try to educate them and, and that, and, uh, a huge supporter of Israel. I was there on October 7th. Wow. Saw the, I saw the atrocities, had rockets flying over my head for three days, kids, and you experienced all the trauma. And, uh, you know, here, every day we live with this and people should not forget that, right? The horrific, all the great comfort we have here in the God bless the United States of America, uh, at what happened there is truly another Holocaust. And we have to do everything we can to destroy, uh, you know, ama destroy evil in the world and bring region, uh, and bring peace, uh, to that region and to end this once and for all. So it's, it's been a very painful five months this to Right. And then, you know, with it's upsetting to see, you know, significant, you know, sizable protest, you know, against, you know what? Well, Yeah. You're, you're, you're never, first of all in this world, everybody's not gonna be happy about the same thing. Right. And, but you gotta know your core values and you gotta know, it's, it's, you know, you gotta be a good person and good to other people. And, and that's really what it comes down to. You. You can't be attacking somebody just because you don't believe in what they think. And, and, you know, and, and that's, that's what we gotta start getting away from. That's my personal, Yeah. I, I, I think, I, I think what's happened is, uh, you know, the, uh, the almo and the, and the Jewish talk about this, uh, we are living in Messianic times and it predicted that the world looks like it's completely upside down. The value is completely upside down. Nothing makes any sense. I mean, who would've believed in these, uh, values of, you know, I can't figure out, I'm a man, I'm a woman. I'm this, I identify as this, I as that the cancel culture, the war culture, you know, the, uh, the, the, the move towards socialism, Marxism, all this stuff. You know, I came, I came here from Iran at the age of 15 to a land of promise, to a fantastic country, to Orange County, California to America, and the American values. And, and today, I can't believe what I'm witness, none of it makes any sense, but it's supposed to be this way. It's supposed to be completely upside down. So, uh, we just, uh, have to do our best to change the vision, to come with a spotlight and, and make the world shine by changing the world into a better place. And I, It's, you know, people with your background that seemed to appreciate, you know, what you described, you know, the benefits of this country more than, you know, a lot of the people that are blessed to be born here. Yeah. Um, so, you know, and it's terrific what, what we're seeing, you know, especially with the, you know, the protests upset me here quite a bit. Um, but, you know, going forward, um, you know, thinking about, uh, other personal interests, you know, that, that you may have, um, and, and at the same time, I know education and being a mentor, uh, you know, is a big part of it. Um, what advice, you know, for someone starting out today, um, would you give them more? And if you were starting out today, would you take the same path or would you take a different path knowing what you know now? They recently did a survey. I, I'm an avid leader. Uh, I, I follow the news closely. I pay attention to politics. I pay attention to social trends to young people. Uh, since Covid, we've seen a few different changes. A people don't wanna work as hard, especially young people. B they think that, uh, uh, you know, nine to five is, is too old fashioned. It is, it's too much work. They don't wanna come to the office. They wanna work from home. And when people do come to the office, they come to the office in their pajamas and we just come walk around here in Century City, you can't, you can't believe how people are dressed. We didn't see this four years ago. We didn't see it five years ago. So that drive, that passion that immigrants came here with, that, you know, my father came here with, and maybe, you know, your parents, you know, we're all immigrants here of some sort, you know, some generations earlier, some generations later. If you have that fire ambition, you could still do great things in this country. It's greatest place to be on earth, you know, besides try Israel to really achieve your dreams. And my advice to young people is don't sell yourself short. If you work hard, if you have a goal and you do what you love, it's important to get up every day and do what you love to do. Don't do something that you don't like doing. If you're successful at it, get out of it. Life's too short. Mm-Hmm. Don't do something that you enjoy and you'll be very successful at it. And I think perseverance, positive thinking, being optimistic, not falling down under pressure, under, you know, outside forces. We've been, uh, in my lifetime through three to four cycles. The first one I saw was the 1980s, then the SNL crash, the great recess. And now I don't even know if to call this cycle, call it the post pandemic cycle. Yeah. Uh, everyone, everyone of 'em is different, but eventually everything adjusts. You gotta have a long vision. And today, I don't think in my, you know, under my term, I'm thinking to the next generation, next generation, they have grandkids and God, God willing, and next family will have great grandkids. And, uh, you know, we, we build things from a generational perspective looking into the future. And, uh, you can, we can do anything you want. And you know what, it's kind of interesting too, 'cause the real estate business doesn't change that much. I mean, it's, you could still start in the brokerage business broker. I mean, sure the technology's changed and there's a lot more information, but it's not that different. You know, it's still the fundamentals, it's still dealing with the clients. It's still, you know, the same goals that they had when you started. So, you know, for the right person, it still makes sense to start out in brokerage Or, yeah. I mean, funny you mentioned that I, I got a call here, uh, two weeks ago from an old friend at Eminem, uh, uh, God bless him, Dave Lincoln. He's only 78 now, almost 80. And the guy still got that power, that vigor. He is pitching a deal. Tell me what about last year? Tell me what you wanna do this year. Tell how you see the market. I'm like, Dave, I love you. This is great. I mean, look at this energy. Nothing has changed in this guy. So age is a relative number. It doesn't really mean anything. And if you read the, uh, this great book called The Great Age Reboot, it's written by Peter Lineman, sure voice, uh, and, and also three guys wrote this book. Uh, they say that the new 90 is gonna be like 50. Wow. The new 60 is gonna be like the guy who stole 25. So, uh, i, it is a relative number, right? The purpose. You believe in God, you believe in family, you believe in core values. You believe in American traditional values, not this trash that they thrown our way the past four years. Uh, you could leave a fantastic legacy, you know, and it's really my, uh, my, my brother, my blessing to anyone, um, especially young people who can put on their head straight and don't spend so much time on these, on these smartphones, right? It, it's a crazy addiction. Turn that damn thing off two, three hours a day and think, and write down and read, you know, let your mind decide. You know, go to a class, you know, open, open yourself up and keep learning and keep growing. It's a, it's a beautiful life. Well, you know what, with that, I think you gave us a great interview today and it's been a real pleasure having you with us, Henry. Kind of a drop mic moment there. So Yeah, I mean, you got, you gotta find that one last bit of, uh, advice and I think he gave it to us. Thank you, Henry. I really thank You, RD. Thank you Steve. You guys have great, and this has been an absolute pleasure. Let's do, yeah, Time has flown by fast. You, I'm sure we, lots of questions on the table, but we'll get you back, you know, uh, next, you know, down in the future to get some updates. So my pleasure. Best of luck with, with everything. It was a mitzva having you, you know? Yes, it was great. And um, have a fantastic afternoon, Henry. Take care. Thank You. Take care. Take care. Bye Bye. You all. Good luck. Thank you. You've been watching Commercial Real Estate Talk with Stephen Arne, sponsored by commercial real estate inspectors, Fidelity Mortgage Lenders, And Paramount Property Tax Appeal.