What's your Wunderkammern?

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This blog is mine. From Austin Kleon:

If you happened to be wealthy and educated and alive in 16th- and 17th-century Europe, it was fashionable to have a Wunderkammern, a “wonder chamber,” or a “cabinet of curiosities” in your house—a room filled with rare and remarkable objects that served as a kind of external display of your thirst for knowledge of the world. Inside a cabinet of curiosities you might find books, skeletons, jewels, shells, art, plants, minerals, taxidermy specimens, stones, or any other exotic artifact. These collections often juxtaposed both natural and human-made marvels, revealing a kind of mash-up of handiwork by both God and human beings.

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Always Doing Both

“The master in the art of living makes little distinction between his work and his play, his labor and his leisure, his mind and his body, his information and his recreation, his love and his religion. He hardly knows which is which. He simply pursues his vision of excellence at whatever he does, leaving others to decide whether he is working or playing. To him he's always doing both. ” ~James A. Michener~

as seen on Instagram via solo_with_gopro

Good Deals find Good Money

Freshman year in college, I met a friend. The friend's dad was a commercial real estate developer. I had always wanted to learn more about commercial real estate given that my dad was in the hardware business, owned his stores and as well as a few strip centers. I offered to take my friend's dad to lunch. He actually took me to lunch. We visited his office. Met his small staff: an office manager (the type of woman who you know is the one who really runs things and makes sure it all stays together) and "the engineer" who also wore hats as an architect, surveyor and a lawyer. Three people, the manager, the engineer and the developer.

The conversation zig-zagged from "how's school?", to naive questions from an eighteen year old, to real nuts and bolts lessons from the trenches of a life long commercial real estate person.

Boom times in Deer Valley, UT. Major failures in Vail. Huge successes in Chicago and the midwest. Now, if only the city would agree to that damn traffic light and bypass at project so and so.

"See now" the mentor said. "Your dad has to open the stores everyday. Someone has to unlock the doors and let the customers in. I did not want to open the doors everyday, I wanted to own the doors and collect the rent."

He continued with more stories of leases and financing and lore. His excitement was relentlessly contagious.

"The yield, I do it for the yield." (Yield what's that?) He grabbed his HP off the desk. "Look, cap rate. Capitalization rate." He punched the numbers in the calculator. Rent, net income, price, value, yield, cap rate.

The specifics pretty much went over my head. However, the lesson sunk in. Income streams create value. Income streams are created by location, tenants and buildings. By the enterprising developer, of course. (And, if I really understood it correctly, I would never have to work in a hardware store the rest of my life.)

His projects were big. Even by today's measure. He was on the leading edge of developing these new projects that are now commonly referred to as Power Centers or Regional Centers. Not malls. Kohls. Bed Bath & Beyond. Dick's. Best Buy. Target. All in one project perfectly located to draw shoppers from all directions from up to 30 minutes away. And not to mention the in-line retail spaces that were really just gravy.

These projects were 10, 20, 50 million dollar deals. I could not even fathom the dollars. When he showed me the numbers the last 000 were not written. Everything was short form for million. 1,000 was $1M. 20,000 was $20M. Wow, I thought.

"But, but, but.. where, I mean how do you come up with money?" I said. He replied "That's the easy part. The money finds me. I create the deal and the money comes."

Uh. OK. Sure. My 100 was $100, not $100,000.

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Many years later, after being in the CRE a while myself. I decided it was time to do my own deals.

How would I finance them? Where would the money come from?

I remembered that first CRE lesson as an 18 year old hippie (yes, I had a ponytail at the time).

Just to be sure, I asked a CCIM friend what the best deals would be to get started in and get financed. He said it does not matter. What, all these people are crazy, I thought. Millions of dollars easy to get? I asked him to extrapolate.

"Good deals find Good Money" he said. "There is so much money out there. Sitting there. Just looking. Waiting. Looking for a home. A good deal."

A good deal, he explained, was one that was fundamentally strong. Good location. Good building or bones. No hair. (environmental or title issues etc.) Good tenant(s). Good price. Nothing over the top. Just good all around. Solid.

Even better if it had upside: below market rents, extra land, below market purchase price, etc..

In other words, create a good deal and the money will come.

I have now seen it first hand. Whether it be my own land subdivision on the river that was easy to sell the parcels at crazy prices. Or a $12M Walgreens with non-recourse financing. Or a NNN Dollar General attracting multiple all cash buyers. Or a trailer park on the river with unsolicited offers.

Bad deals or marginal deals on the other hand struggle. Languish. Sit on the market. Need personal guarantees (and your first born child). Fall apart.

Finally, I got it. And get it.

Thank you Mr. Cap Rate.

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Now, what is this all about? It is about a new kind of deal. A deal that is not just about money. It is a deal that does good. Of course it makes money. But it does not have to take every penny off the table. It is a deal that does good at the same time while making money. A deal that helps people. Helps the environment. Maybe helps animals. A deal that does good.

The current lingo is "impact investment" or "social fund" or "CSR (Corporate Social Responsibility).

I see these deals as building reuse, parks from vacant lots, public art, community uses, historic preservation, corporate reuse, conservation or any real estate deal that can actually do some good besides just make money.

Do you care? If you do, call or email me to find out more. I'm not eighteen anymore.

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Making money is art and working is art and good business is the best art.

- Andy Warhol

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Transdisciplinarity

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A discipline to call our own. Andrus & Morgan is a creative real estate company that does important work on meaningful projects nationwide.

We specialize in commercial real estate reuse, repositioning and investment.

We make the world a better place by combining real estate redevelopment, impact investing, media, design, architecture, historic preservation, crowdfunding, green, reuse, finance, commercial real estate, residential real estate, non profit, real estate donations, web, technology, crowdsourcing, social media, law, planning, land use, brokerage, conservation, philanthropy, marketing, art, public affairs and CSR.

For a minute, we seriously considered blending all the disciplines above into one word. In the end, we felt that this company name was too long (laugh laugh):

The Real Estate Impact Media Design Historic Crowdfunding Commercial Non Profit Weblaw Planning Use Philanthropic Art Affair Firm

We settled on Andrus & Morgan instead.

Besides the unseen well of daily inspiration that has created all of this, Candy Chang helped me take the leap with this short two minute video about "Making your own Discipline". Thanks Candy!

What do you do?

Often times people ask me what I do. I also ask people "what do you do?". We Americans are so obsessed with labels and identification. In most cases the responses to "what do you do?" are job related.... I am a lawyer, nurse, executive, broker etc. but really that is just our job and is not really us.  We are also fathers, friends, gardeners, weavers, collectors, daughters, travelers, lovers.

We all have deep inside of us passion and reasons for what we do and why we do it. The surface only tells a part of the story.

Here is a list I jotted on one of my inner explorations a few weeks ago.  This one is titled "Love to....". (I have typed it further below in case you can't read my chicken scratch.)  So... "What do you do?" Would love your comments and emails or tweets

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Here it is typed...

Love to...

    -see potential     -make change     -be creative     -resourceful     -make money     -involve team members     -joint success     -contribute     -help     -understand and be understood     -give back     -provide for my family     -be passionate     -involved, intrigued, excited     -feel good     -see opportunity and act on it

It’s easy to make a buck. It’s a lot tougher to make a difference.

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"It’s easy to make a buck. It’s a lot tougher to make a difference." -Tom Brokaw

In lieu of closing gifts, I have been asking clients to choose a charity of their choice.  I was a little hesitant to begin this program but it has been well received.  My clients and myself are very fortunate people and are grateful for the opportunity to be able to share our blessings.

The most recent "closing donation" was $500 on behalf of KTH Enterprises LLC who selected Architecture for Humanity:

Architecture for Humanity builds a more sustainable future using the power of design. Through a global network of building professionals, Architecture for Humanity brings design, construction and development services to communities in need.

Sponsor a Day of Design | Architecture for Humanity. A $500 donation supports a designer for a week so they can solve humanitarian crises through implementation of smart design.

Special thanks to KTH Enterprises for their generosity!

"It is ever man’s obligation to put back into the world at least the equivalent of what he takes out of it." -Albert Einstein

image credit: afnizarmohd.wordpress.com