Brad Olsen- "Ripples and Bridges" (Part 2) (#114)

[00:00:09] Speaker A: Hi, I'm John Koh, and welcome to Icons of DC Area Real Estate, a one on one interview show highlighting the backgrounds and career trajectory of leading luminaries in the Washington, DC area real estate market. The purpose of the show is to highlight their backgrounds and their experiences and some interesting stories about their current business as well as their past, and to cite some things that you might take away both from educational standpoint as well as lessons learned in the industry and some amusing and sometimes interesting background stories. So I'm hoping that you will enjoy the show. Before I introduce my guest, I'd like to share that both this podcast and the community I started in 2021, called the Iconic Journey in Cretever, is now part of a new nonprofit organization with that same name. The new company will offer opportunities for sponsorship to grow the community, both in membership and in programs. It also allows you as listeners to show your appreciation for this podcast, which has delivered episodes twice monthly since August 2019 with a charitable contribution. Transitioning the community and podcast into the nonprofit organization is underway. The community, which is open to commercial real estate professionals between the ages of 25 and 40 years old, is currently up to 65 members and growing. If you would like to learn more about either joining the community or contributing to the podcast, please reach out directly to me at John coenterprises.com, separately, my private company co enterprises. Now we'll focus only on advisory work for early stage real estate firms and career counseling. If you have interest in learning more about its services, please review my [email protected]. thank you for listening. Thank you for joining me for another episode of Icons of DC area Real Estate for the second of three episodes with Brad Olson. Brad is my 40 year mentor in the business and started an international advisory firm. This episode, he will discuss the growth of his one man business, Atlantic partners, and talk about the clients he worked with and some of the most interesting assignments he had from those clients. He intersperses his ripples and bridges theme that we discussed in the last episode within his client building as well. So without further ado, please enjoy this wide ranging conversation with brattles. And how'd you come up with that name? [00:03:19] Speaker B: So I wish I still had the paperwork, but I played with 100 names, every combination I could think of. I didn't want it to be my name because I always thought that was too arrogant. The people who named their companies after themselves, I probably should have because that was my name, but I played with a bunch of things. I realized what I really wanted to do was to raise money across the Atlantic in partnerships and ventures, and Atlantic was an obvious choice. And then partners was really sort of out of the blue saying, well, it sounds like there's a real group here. It sounds like it's a company. In the end, to be completely fair, I did have partners, because when we created the company, Louise and our two grown sons became shareholders in the business. But on November 1 of 95, I signed the paperwork, create Atlantic Partners Limited. I had two clients. Royal Lund was going to pay me a monthly retainer and Greystown was going to pay me a monthly retainer. But in fairness, I had no real business plan other than what I was going to do for those two clients and had absolutely no clue as to what the company would look look like. Even five years down the road. Coming out of the 90 to 94 crash and the pain that it had caused, I figured out, and I accepted the fact I wasn't going to get. [00:04:49] Speaker C: Rich. [00:04:52] Speaker B: Just as you were kind to say that I could create a business and you'd bring money. Others told me, why don't you set up a company and raise money? And what I realized is all I want to do was establish a business of my own so I could do things my own way without somebody in London telling me, somebody in London or Washington DC, or Chicago or Boston or New York telling me what he or. [00:05:16] Speaker C: She thought I should be doing. [00:05:18] Speaker B: I never again wanted to have to be at the mercy of somebody who didn't understand what I wanted to do and how I wanted to do it. I wasn't thinking of work life balance. [00:05:32] Speaker C: I was just trying to figure out. [00:05:34] Speaker B: A way to do things my way. But as it turned out, the work life balance happened. Both our grown sons, one was living in Colorado at that point, the other one in Chicago. They both ended up moving here. So we now have both sons and ten grandchildren, all based in North Carolina, although one son's in Germany in the army, and other granddaughters starting at american university law school in the fall. So they're not physically right here, but. [00:05:58] Speaker C: They'Re all based here. So we have the whole family here. [00:06:01] Speaker B: And I could spend time. When I wanted to spend time, I could spend time, and I didn't have. I mean, I don't even know what. [00:06:07] Speaker C: A mission statement was at the time. [00:06:09] Speaker B: I'm not sure anybody did, but I did have a mission statement. But from the beginning, I was committed to working. And again, I've said this many times, but to work only with people I like, trust and respected on projects where I could add value and have fun. By having fun, I meant to doing things that I enjoyed. So it was critical to me that I got to do what I wanted to do with the people I wanted to work with. And I wouldn't work with everybody. I wouldn't work with people I didn't. [00:06:37] Speaker C: Like, trust and respect. [00:06:38] Speaker B: I wouldn't work on things I didn't think I could add value to. I wouldn't work on things if I thought it wasn't going to be fun. And I will tell you, John, that my friends in industry thought I had gone crazy. They literally thought I'd gone off the deep end. No one could do what I set out to do. They'd never heard of anybody. I was doing it out of a. At that point in time, apartment in. First apartment was in Raleigh, and then I moved into an apartment that Greystone bought from New York life. And then we finally bought out. But I've never had an office the entire time. I've worked out an extra bedroom when no one else knew about WFH work from home. Nobody had any possible to be remote work. I was working from an extra bedroom, not only not in Raleigh, I was working out of an extra bedroom in a suburb of Raleigh. And I was trying to build an international business. It was an insanely ridiculous idea. If I thought seriously about it, or if I'd had to justify it to somebody else in a business plan, no one would have backed that idea back. [00:07:45] Speaker A: How did the business evolve from two clients that you were doing asset management for one and then investment advisory for another? Basically independently. And then how did the talk me about the next step on how the. [00:07:59] Speaker C: Business started growing from that? [00:08:01] Speaker B: So in the step back and then forward again in the late eighties, everybody was going to the Netherlands to raise money from the Dutch. I would see Pat Callan of Reef at the airport, cross paths coming out of one. I'd come out of a meeting. He'd be waiting to go in the next time. Everybody was in Annells. But then when the 92 treaty change came and the crash of the marketplace, basically everybody gave up on the Dutch. As far as direct investment in the US, obviously, if you're wanting to reit. [00:08:32] Speaker C: You were doing road shows over there. [00:08:34] Speaker B: But in terms of real estate investment, nobody was spending time with the Dutch. But I hadn't given up on them. It wasn't just that I enjoyed working with them or that I spent a lot of time with them, but I had this crazy idea, which was the dutch pension funds had too much money to satisfy their real estate portfolio requirements in a country of 13 or 14 or 15 million people. When there were all these other dutch pension funds with capital, they had this enormous amount of capital and a relatively small landmass. I figured that they would have to come back to the United States and that when they came back, they would take advantage of the new tax treaty. And if I could figure out a way to solve their problem from a tax structure and provide them with access to product in the real estate world. I had a market, I had a business, I had a model, I had an idea. [00:09:30] Speaker A: Had you stayed in touch with your friends during this whole time? [00:09:33] Speaker B: Constantly. In the second half of the nineties, no one spent more time in the Netherlands than I did. [00:09:39] Speaker C: No. [00:09:39] Speaker B: No, I can't prove it, John, but I did not see another real estate person in the US over there. Like I was over there. I was over there four, five, six times a year in front of all these people listening. And again, people find it hard to believe I was listening, but I was listening to them, trying to figure out what they wanted to do. And it sort of raises the question of why the Dutch were big players in the US marketplace. And you and I have talked about this from time to time about who became active investors in the global real estate market and why. And essentially, what I just told you about the Dutch is true of virtually every major exporter of capital in the global real estate market. Their home market had more capital than it had real estate. And so we can go down chapter. [00:10:29] Speaker C: And verse of each one of these. [00:10:32] Speaker B: Of late, the Canadians have been among the most active, you say, well, they got a lot of real estate. Yeah, but their real estate is limited to a small number of real cities and the capital markets. Big pension plans. They've had massive pension growth since they adopted a plan requiring people to contribute a significant employers to contribute a significant percentage of income to a retirement system. So Canada took more money than it has. Real estate, has to go outside Australia, same store as Canada, huge pension system, great land mass, but not much developed land. A handful of cities they could invest in, so they became exported. The one that was the most famous in most of the nineties was Singapore. Government of Singapore investment Corporation. Again, by law, they could not invest in Singapore real estate. And they had trillions of dollars to get invested in stocks, bonds and real estate. They were going to invest in real estate. By law, it had to be outside of Singapore, so that money had to go someplace else. It went to the US, it went to Europe, it went to the rest of Asia, Japan. Similar story in terms of capital, great real estate, Tokyo market large, but again, more capital per capita, or let's put it to say, more capital per investible square foot of real estate than they could get invested. Germany is sort of the outlier. And the story of Germany is a little different. Lots of capital, typically not pension fund capital. It's private capital, insurance company capital. And the problem with the german real estate market was historically it was owned by families, and those families never sold. [00:12:16] Speaker A: It's the feudal system. [00:12:19] Speaker B: So essentially, coming out of world War Two, if they own real estate, they held onto the real estate because they had rapid inflation. The forward deutsche market was worth nothing. And so the only thing they had value was real assets, gold and real estate. And so families typically bought real estate not for themselves, but for future generations, which is what I've run into with my german family office clients. And so even though Germany has a market that looks a lot more like the US because it's a number of cities with lots of real estate, the fact of the matter is it too has had more capital than it's had real estate. [00:12:58] Speaker A: I wanted to ask you, Brad, one other country that puzzles me as to why they're not a big, huge international player and they supposedly have the wealthiest country in the world per capita, and that's Norway, because of their oil wealth and stuff. Why haven't they become major international real estate players? [00:13:18] Speaker B: The oil fund is, and that's of late, because they didn't have capital. The original oil fund is relatively new vintage by our standards, yours and mine. And they had limitations how much they could have in real estate out of that total value. And they have started investing. They've done a fair amount of investing across Europe and in the US, but not nearly to the scale that you would imagine. And that, I think, is primarily because they've had limitations on percentage allocations to real estate, but also limitations on how they could structure those investments. But they don't have a pension system. Once you get beyond the oil fund, which is essentially a national pension scheme, there aren't a lot of major corporations based in Norway that have pension plans. Denmark is a much better example of exporter of capital. Again, small land mass, lots of pension capital. Sweden's sort of in between Norway and Norway. Between Denmark and Norway. And Finland's actually probably the most interesting of the Nordics because it's got capital and they started looking outbound. But they were late players to it because they weren't part of the western system in the same way, because they were, it looked east toward Russia for a long time. [00:14:42] Speaker A: Interesting. [00:14:42] Speaker C: Okay. I understand. Now. [00:14:45] Speaker A: I just. Every country has its own dynamic, obviously. [00:14:49] Speaker C: Yeah. [00:14:49] Speaker B: So anyway, so, I mean, bottom line. [00:14:52] Speaker C: If it hadn't been for Rodney Pollard. [00:14:54] Speaker B: And Don Conover, there probably wouldn't have been a Lexington or would been the Lexington that I imagined. But then after those two, I've managed to work amazing projects with incredible clients, far, far beyond my imagination when I set up Atlantic partners, but I think reflective of just the business model. As crazy as the business model seemed in 1995, I found clients who embraced it. They loved the idea that they were working with me. [00:15:29] Speaker A: So who was your first dutch client? Atlantic partners. Then you mentioned the Dutch. [00:15:36] Speaker B: Yeah, it's actually, again, ripple effect of people we let go when we had to downsize. Rich Ellis. So one of the people we let go was Paul Boneham, who had become a pretty close friend of mine. [00:15:53] Speaker A: And he worked at Prudential for a while. [00:15:56] Speaker B: He worked at Prudential initially. Right. [00:15:57] Speaker A: That's when I met Paul. [00:15:59] Speaker B: I hired him from Prudential. Yeah, we've been in. [00:16:05] Speaker A: He was there when I started at Prudential. [00:16:07] Speaker B: 85 or 86 in the Chicago office. [00:16:09] Speaker A: Well, I was through 79 to 80 in Detroit. And Detroit reported up to Chicago. [00:16:16] Speaker B: Yep. Paul and I got to know each other in the early Richard Ells days, and then we hired him as Lexington. And then we had to let him go when we downsized and let go a ton of really good people, he landed on his feet really well. Paul retired a couple years ago. He'd been a senior guy at Benthal Kennedy. But shortly after I set up at LaNC Partners, I was in Chicago. Paul said, we need to meet the people at Amlie residential. Paul had a very close relationship with a bunch of the guys at Amlie, which was at that point a publicly traded Reitzen. Amley was looking to grow its overseas capital sources. So when we met, they said, can you help us raising money? And I explained the tax treaty. They were all a bunch of lawyers. A bunch of them were lawyers anyway. And I said, we should be looking at the Dutch because you guys have a structure, your public REIT, but you could create baby reits. And I gave him that sort of story about the dutch structure. And shortly after I had met with Amlie, I was at an. A fire meeting in Amsterdam. I met a guy named Erwin Stoudheimer, who had just become the head of real estate at MN services. MN services was, in typical dutch fashion. There's an operating or investment arm of each of the pension funds. So MN was essentially the real estate investment services arm of the dutch metalworkers pension, one of the big dutch pension funds, industry wide pension funds. They had done it. So this is 95. 96, maybe 96. They had done a deal with Beacon Capital in downtown Boston, an office building using the domestically controlled REIT structure. This was probably the second new acquisition by the Dutch that I had heard of. Abp had done one, and mn did this one with Beacon. And so Erwin was saying, well, yeah, we really like the structure, but we would like to get exposure in the us multifamily sector. Well, that's all AML did. And so essentially what I did was to work with Alan Swede at Amlie and Erwin Stadtheimer at MN and their lawyers to create what was essentially cookie cutter crook economy of domestically controlled REIT structure, go around and buy individual assets. So AML had a relationship with a us insurance company that would agree to take a passive 5% position in each one of these baby reits with Amlie and the metalworkers fund each taking the remaining 95, 50 50. So 47,547 five. And the structure could be replicated indefinitely. So they did a first raise of capital, first tier of capital from MN, got it invested, and ended up doing two more of those tranches of capital going around buying up assets. [00:19:15] Speaker A: How much money did you move in there as part of that investment, just out of curiosity? [00:19:20] Speaker B: Yeah, I dont know what the total capital would have been over time, John. Probably between two and 300 million us equity, if I had to guess, of new capital. And one of the benefits of that once I got to work with Bruce Gellman. Bruce was the lawyer for Amla. He was at Mayor Brown at the time, and then moved on to Kirkland. He was a fantastic lawyer, understood the business side of it as well as the tax side. And I think one of the premier lawyers for structuring these transactions with foreign investors, the Dutch in particular, but foreign investors into us real estate. So that was sort of the. Okay, I get it. I work with the Dutch, I understand the treaty, I understand the desire, I'm right, that they want to come back. And then birth example, had already made the deal in Boston, wanted to come back to the US, but it had to be on that structure. And I was spending all this time in the Netherlands and had been spending time in. I never stopped going, other than my six month sabbatical. I kept going through all the. All of the time of the Lexington company and then Richard Allison, and now I'm on my own as Atlantic partners, and I go into. So my next sort of storyline is blue sky Group, which is the pension fund arm of the cattle and pension funds. And I was dealing with Jan Vanderpoel, who ran the international real estate for Blue sky, for the tale and pension funds. And I had first met Jan, I don't know, certainly the late eighties. Fantastically interesting, wonderful person. I would see him every time I was in the Netherlands. His offices were in the same basic geography neighborhood as my client gak. So when I went to see Gak, I would stop to see Jan on the way in or the way out. He had been trained as a tax lawyer, which turned out to be really important as this treaty stuff became relevant. Interestingly enough, when he was in private practice, one of his tax clients had been Donna Summer, the disco singer, who represented some royalty issue with how they were taxed in the Netherlands. [00:21:28] Speaker C: Anyway. [00:21:28] Speaker B: So I don't know. I probably met with Jan twelve to 15 times with no prospect of any business in the short term. They've been very active as direct investors in the US. In fact, I didn't realize this at the time, but they been major players in the Raleigh market. They owned a portfolio ahead there. US entity was based in Raleigh, but this is sort of bridge building. With Jan, I was spending time listening and hearing and getting to know each other and this whole notion of building this relationship of trust. And then it was 97 or 98. Jan finally decided they sold everything in the US, but he decided he wanted to come back to the US for the reasons which I've enunciated. He knew we had to. He needed to get real estate, but he figured he needed ammunition to go back to his investment committee to convince him to go back to a market that they'd forced him to sell out of. [00:22:19] Speaker A: Interesting. [00:22:20] Speaker B: And he decided he needed a consultant with the credentials to convince the investment committee. And he said, Brad, I'd love to work with you, but what I really need is one of these gigantic us pension fund consultants that's advising all the us pension funds on what they should do. And I want to hire you to help me hire a consultant. So essentially, I got my first assignment from Buskai Group was as a consultant to hire a consultant to find a consultant. So we ran a beauty contest and ultimately Jan chose the Townsend group as his pension fund consultant. Townsend was already by then either the largest or the second largest pension fund consultant in real estate. But as far as I know, they'd never done a. Never had a foreign client. So I think I brought them their first client from overseas. And then I worked with the Thompson team and Bluesky in this sort of middleman role to help create the strategy that Townsend could sell to Blue Sky's investment committee. And the strategy was essentially a 50 50 waiting, public and private real estate. So reits and private real estate. The private real estate to be owned through the domestically controlled REIT structure. And that they would use the public sector until they could get to that 50 50 waiting. So they would own all reits until they could move money into private reits. To get into the private real estate side. And as I say, given Jan's tax background, they were very much aware of the provisions of the treaty. [00:23:54] Speaker A: So were they investing in common stock. [00:23:56] Speaker C: Of the reits, or were they doing it? [00:23:58] Speaker B: Absolutely common stock? Well, they were done common stock. They were buying liquid assets in the REIT market so they could move that money into prior real estate when they wanted to. [00:24:07] Speaker C: Okay. [00:24:09] Speaker B: And that. That then becomes my next story. I got one more dutch client that I'll mention, then I'll go back to the story of in that chronological form. But now I need to fast forward 20 years talking about my last dutch client, which is Bauenvest. So Bauenvest is the real estate arm of the dutch construction pension fund industry. The pension fund for the dutch construction industry. For that reason, they were one of the most important of the dutch pension funds in real estate, because their pensioners were the construction industry. Kind of like Afl CIO, the teamsters. I mean, construction industry wanted to get building investment trust. Right, exactly. To build more buildings. I targeted boundvest as a potential client since the late eighties. I first met their head of real estate when I was visiting my client at Wilma, at his home outside of Leiden, the Netherlands. And he said, oh, you want to meet the guy from Ballenfest? Rob Huyge is my neighbor. This is Rudy Blumen said, I'll call Rob. I was at Rudy's house. I'll call Rob. He lives right around the corner. Rob will come over. So Rob Hoyn comes over and introduces himself. He's dead of real estate for Bowenvest. Rudy's telling him what I'm doing for Wilma. I'm telling him what I'm calling everybody else. So now I meet. Next time I'm over, I meet Rob. And over a series of visits, he's retired or he's moved on. I think I met three or four different heads of real estate, including a guy named in Porto, who had been at Richard Ellis. When I was at Richard Ellis, he was at Richard Ellis Anderson. [00:25:43] Speaker C: I met all these people. [00:25:43] Speaker B: And probably, and then I would meet all the real estate people and all. I probably met at least 20 people from the real estate team of boundaries over more than 20 years. I liked them all. I formed close relationships with them. Ice Plantinga, who headed up the north american investment team for many years and now the chief client officer. One of these people, great relationship with, never did business. I remember him introducing one of his colleagues and saying, Brad probably knows more about dutch investment in us real estate than any dutchman. If you have any questions about what the Dutch did or when they did it, just call rad. Despite all these efforts, I'd begun to think that this was one of my bridges to nowhere. It was never going to result in any business and it would have ended up as a bridge to nowhere if I had retired at the end of 2020. But in 21, Nicola Klein Bogg, who was the head of corporate marketing, and George Stevennett, who's relationship manager for institutional clients, retained me to help them develop a strategy to attract canadian pension plans to invest in the Netherlands. And they co hosted the last of my industry dinners, which was in Toronto in June of 22. John, when I invited you to come up to Toronto, the dinner was co hosted by Bioinvest and Bell partners in Rockwood Capital. We end up with about 100 guests. It was my, I called it my farewell dinner, but it meant I finally had got to work with Boundef. So now I'm back to blue sky group. Jan van der Poel Tax Treaty. [00:27:11] Speaker C: We'Re now about 2000. [00:27:13] Speaker B: So I had done the deal with Amlie and MN multi asset portfolio individual reits. I knew Bluesky wanted to come back to the US and that they needed the structure of domestically controlled reits. So I had a light bulb went off. I had this idea that it might be possible to create a commingled fund using a series of domestically controlled reits, own the assets of the fund to attract dutch capital in a commingled vehicle. As far as I knew, no one. [00:27:47] Speaker C: Had ever done it. [00:27:48] Speaker B: I may be proved wrong. Somebody, as soon as somebody hears this, they'll say, oh Brad, you're stupid. You forgot about so and so. I had never run into it and none of my dutch friends mentioned it. So I'm assuming I'm right that the one didn't exist. So I prepared a short outline of my idea. It was only two or three pages long and I made a short list of us advisors to approach with my idea because I couldn't do it by myself. I needed a player, I needed a manager. My contacts at AEW and Prudential, they were on my list. Steve Collins, again, back to my contact with Steve. He knew the people at principal. He said, let me introduce you to principal. So in the end, I approached those three firms, Aw, prudential, and principal. All three liked the idea, but both Aw and Prudential had some reservations. Pru had some of its own business. Internationally, Aw had some issues. Julia Lawler, who was the head of what later became known as principal real estate investors, ran real estate at principal the time. And Greg Hauser, who ran the equity side of the business, basically said to me when I went to Des Moines. [00:28:53] Speaker C: We have no idea what you're talking about. [00:28:56] Speaker B: We don't know anything about dutch investors. We don't know anything about domestic control, restructuring. But we want to raise capital, and if you think this is the way to do it, we're willing to give it a shot. So basically, principal said, you tell us what to do, and we'll do it. Jay Davis. For their equity team, it took almost two years. But Jay, working with my friend Bruce Gelman, my tax specialist, and Jan Vanderpoel, a tax lawyer by training, created what was called a principal enhanced property Fund co investment Capital. About 100 million from principals general account and 100 million from KLM's pension fund, pooled in a commingled vehicle. Exactly my idea. But with the sophistication that Bruce Gellman and Jan Vanderpoel were able to bring to it, and by the time of the GFC principals fund had assets that had totaled some $2 billion. All from this little germ of an idea that I have. Jay used to joke that I was a one man company with $100 billion company working for. I will say again, I may be wrong when I say it was the first one, but as far as I'm concerned, coming up with this idea of figuring out a way to commingle capital using domestically controlled REIT structure was the most innovative transaction of my career. Every fund after that used that idea. [00:30:30] Speaker C: Again. [00:30:31] Speaker B: I don't take credit. They may have been there before. Nobody I knew had one. None of my dutch funds, dutch clients had ever invested one. So it ended up being the way everybody did it. And it was logical because you had to have the domestically control risk structure to attract these foreign capital. Foreign pension fund capital wasn't just dutch. It applied to virtually all foreign pension funds. [00:30:50] Speaker A: Including the Canadians. Right. The Canadians, too. [00:30:53] Speaker B: Canadians go basically right down the line. And there are definitions of what a qualified foreign pension plan that came later. You had to qualify as a foreign pension plan. And there were all kinds of restrictions on that. But what was interesting was that the principal debt side saw that we're making progress on the equity side at that point. Pat Halter and Todd Everett were running the debt side of principal. [00:31:16] Speaker A: Sure. [00:31:16] Speaker B: And they said to me, hey, Brad, wait a second. Can we do something like that in Europe? Yep, just can we do debt? And basically the idea we came up with was essentially to create a structure, not using domestic infill rate, but sort of an ad loan structure to attract capital from german banks that were already trying to invest in the US but having trouble finding assets. Well, principal had, as you know, had this fantastic network around the country, and they could source deals everywhere. And so essentially what we did, what I did was introduce them to the german banks who were looking for product, and principal would underwrite the deal, and the german bank would come in as co lender and principal would carve out a piece. That Germans would carve out a piece. And we did, I suppose, over the course of two or three years, we must have done three or 400 million of those co investment loan deals with german banks. [00:32:12] Speaker A: So step back for just a moment at explaining how you. I mean, you made these relationships. How did you structure your fee structure around all this? I mean, how did that all kind of evolve? [00:32:25] Speaker B: In almost every case, I wanted to be paid something currently because I didn't want risk. This goes back to my risk averse personality coming out of that crisis of 94. So I think in the 26 years I had Atlantic partners, there might have been one year when I started out, not knowing where the dollars were going to come from. Every other year, I had a combination of retainers that were more than enough to offset my limited overhead, and then there would be a bonus structure built into it. So it was retainer plus a bonus. In almost every case. I think I might have done. I think I can think of one situation where I was willing to take the risk and go without a retainer, but I almost always had to have retainer. I just. I didn't want. I didn't care about making a lot of money. I just didn't want to lose money. [00:33:20] Speaker A: So that started with your first deal with the Royal London folks. You had a retainer right then. [00:33:25] Speaker B: That was straightforward from them. And the same thing with Greystone retainer again, and a performance fee if we raise capital. [00:33:32] Speaker A: So that was the theme throughout. There was no change, never changed that model. [00:33:36] Speaker B: So I want to do one more comment about Pat Halter in principal. And then I do want to jump back to Greystone? So you know Pat and Todd from business? [00:33:47] Speaker A: Yep. I did several deals with. With principal. [00:33:50] Speaker C: Yeah, yeah. [00:33:51] Speaker B: So Pat was running debt. Todd was his first lieutenant, essentially. And Pat became head of real estate. And then Pat became head of global investors, stocks, bonds, real estate, everything before he retired. Anyway, so Pat went with me on these trips to Germany and Europe generally. And Pat jokingly used to refer to our trips as the Brad Olson death marches because we covered so much territory and had so many meetings. And in fact, Pat did end up in the hospital with exhaustion when he got back from one of those trips. I think that's why he pointed the phrase. I'm sure it wasn't my fault, but I love working with the principal guys. They were all midwesterners like I was. It felt like family. I love working with those guys. [00:34:30] Speaker A: Des Moines, Iowa. [00:34:31] Speaker B: They were fantastic people. Absolutely fantastic. So I want to come back. I want to come back for a second to Greystone because maybe we finished this one today. It's a fantastic story from my perspective. Interesting side story of all this. So they hired me to go find the money in Europe and because of all the work I'd done in the Netherlands, that was my primary focus initiative. So Jan van der Poel, whom I've mentioned from Booska Group, when I wasn't getting any business from him, we're still providing introductions. So he told me that the Phillips pension fund, this is the pension fund of the electronics company, had a significant portfolio of us assets, us real estate, and they were thinking about hiring for the first time ever a domestic us asset manager for their portfolio. Jan providing the introduction to the guy in the Phillips office in Eindhoven. And that was the first chapter of what became a very interesting story. So I went to meet him and I had two initial observations from that meeting. First was he had a very odd, a very odd habit of speaking in lyrics from rock and roll songs. So I would ask a question and the answer would be started with lyrics from the Rolling Stones or the Beatles or some other rock and roll whatever, or we'd be having a conversation. Then in the middle of the conversation he would start quoting lyrics from rock and roll song. I found out later that he was the lead singer in a rock band in school and that he just always thought in terms, terms of rock and roll slots. Second, he told me, he showed me what their portfolio was and it ranged from Hammer Village in Raleigh, which was the best infill shopping center in the Raleigh market, shopping centers in parts of the United States I had never heard of, let alone ever visited. I mean, it was strange stuff. So, example of my brutal honesty that Louise always talked about. I said to him, it looks as though some of those locations had been selected by somebody throwing darts on a map of the United States, because how else could you have found those locations that came back later in terms of how it all happened? But he seemed to have appreciated my candor, because relatively soon after that meeting, after we submitted a proposal, he selected Greystone as his us asset manager. So, I'd succeeded in bringing Greystone its first foreign client. Well, surprises followed immediately. My first surprise, that was within weeks after Phillips had awarded Greystone the asset management assignment, Don and New York life had some sort of falling out and decided to liquidate the Greystone entity completely. So I had to go back to Phillips and tell them that the asset manager they just selected after the research effectively no longer existed. My second surprise was that the guy at Phillips, after getting this bad news from me, turned around and asked me, hired me as his consultant to find the replacement asset manager. So I organized the second search. Phillips selected Reef as their asset management, with the proviso that they hired Jeanne Murphy, who had led the pitch for Greystone and was no longer going to have a job because Greystone was gone. My third surprise came several years later, when this same head of real estate with whom I've been dealing was convicted of committing forgery, money laundering, bribery, as well as participating in a criminal organization. [00:38:13] Speaker C: Oh, my goodness. [00:38:14] Speaker B: Four years in prison as part of a massive investigation, which, naturally, sent shockwaves to the dutch pension community. He and another guy, it was one of these things. So when I thought back about how they found these assets, I was thinking, well, maybe he found these assets because somebody paid him to find the. I don't know. That never came up in the investigation. But it was. [00:38:36] Speaker A: Did you have to testify, or were you involved? [00:38:38] Speaker B: I didn't testify, fortunately. Anyway. So, that was my other story about Greystone. Story. It was a short lived relationship, but I couldn't have got started without it, so it ended up being extremely important. [00:38:53] Speaker A: How much business did you do with prudential then, over the old time relationship that was printed? [00:39:00] Speaker B: Principally. [00:39:02] Speaker C: Principally, yeah. [00:39:04] Speaker B: So we did. We did, as I say, three or 400 million of debt. The equity piece. We brought in capital from three dutch pension funds. They had a marketing team in London at that point, doing non real estate stuff. We knew some pension funds in the Nordics. They got some money from the Nordics for that fund. I didn't raise that money. And once they got the fund up and running, basically the marketing, they raised money. They used their ill marketing team to raise money in Australia. And so in total, I guess over a period of years, probably on the equity side, we raised. [00:39:42] Speaker C: I'm going to. [00:39:42] Speaker B: Guess something close to 500 million for that fund from, from the three dutch funds. Blue sky gave them more, PGM gave them more, JK gave them more. Yeah, I would guess it was about, probably about 500 million on the equity side and about three or 400 million on the debt side. [00:39:58] Speaker A: And then why did it end? They just stopped raising? [00:40:02] Speaker B: Yeah, basically. Basically it ended. I have this history of succeeding to the point where the internal people think. [00:40:12] Speaker C: They don't need me anymore. [00:40:14] Speaker B: So the principal marketing team saw how successful this vehicle was and said, we don't need Brad to raise money in the other parts of Europe. We get the story now and we're principal and we'll sell to those people. And again, it's a recurring story for me. It happened multiple times and it was fine. It was all part of the business. I couldn't have done it without them. And then when they could do it without me, they chose to do without me. Still maintaining great relationships with those people. But it was a different kind of business from that perspective. [00:40:50] Speaker A: So, Brad, let's talk about your relationship with Gordon Grubb, who's your local partner investor there in Raleigh Durham. [00:40:58] Speaker C: Sure. Thanks, John. I mentioned Gordon Grubb and Grubb Ventures earlier when I was talking about what I'm doing in my quasi retirement, what I call my quasi retirement. You've made some fun of it, as have others, that it's not real retirement. So I call it quasi retirement. But I want to go in a bit more detail about my relationship with Gordon and my work with his company. I first met Gordon through introduction from Blair Booth. That was one of the ripples I talked about coming out of my assignment with the dutch client Wilma. And at that time, Blair was working with the GBA affiliate here in Raleigh, Goodman Seeger, and I was advising the Atlanta based advisor to Radamco. Radamco was a large dutch investment fund which is trying to expand its holdings in the US. And Blair knew that Gordon's family was in the process of selling off a portfolio of properties it owned in North Carolina. And my client was. My dutch client was interested in expanding into North Carolina. And so they underwrote the portfolio, submitted a very competitive bid. We thought we were in the poll position. We thought we're going to end up with the portfolio but this was 1998, and we were all surprised by the russian debt crisis. And when it hit, my client, which is a global player in stocks, bonds, and real estate, had no idea how the crisis would play out, didn't know what it would mean in terms of real estate anywhere in the world, let alone North Carolina. So it pulled its loi. The grub family ended up selling the bulk of that portfolio to Invesco. But the family liked how I had handled things, including how we had handled the withdrawal of the Loi in an open and candid way, explaining exactly what had happened and why. And the family surprised me by asking me to come on as an advisor to the family board, which I did for a couple of years. And then about two years later, I told the family that I thought it was time for Gordon to separate from his brother, Clay. Clay was operating out of Charlotte and continues to do so. He's gone on to achieve great success in real estate. But Gordon and Clay had very different attitudes about risk. Gordon was older, had been through more downturns. And whenever there was a question before the board of taking more risk or taking less risk, Gordon opted on the side for taking less risk and play more risk. So Gordon took my advice, and with some help from me and Gary Joyner, a lawyer here in Raleigh who has since passed, he set up growth ventures in 2020 in 2002, and I've been advising him and grub Ventures ever since. Gordon and I do a little bit of everything. I was on a call earlier with him today about a potential acquisition, but the one transaction I would mention was the creation of a joint venture with Walton street. The venture was formed to develop a multifamily project inside the Beltline here at Raleigh. Project was started in 2016. Gordon had had looked to start it earlier, but the market was oversupplied and capital was hard to come by. But in 2016, when almost everyone else had put their pencils down and stepped away from the market, I was able to bring Jay Weaver of Walton street, one of the original founding principles of Walton street, to Raleigh. And he liked Gordon. He liked the team, he liked the deal. And so they launched this joint venture when no one else was building in Raleigh, or almost no one else hit the market exactly right. So when demand had increased, supply was reduced, they were the best game in town. Delivered it, leased it up, and then sold it in January of 2018 at what was then the record price for Stick Bill multifamily in Raleigh. For me, this was an example of my ability to help Gordon move from typical friends and family capital to the institutional side. He subsequently negotiated a joint venture with Jamestown on my german contacts to develop a very large scale adaptive reuse, mixed use project just outside of downtown, downtown Raleigh. And that project's underway right now. [00:45:06] Speaker A: It's great. So it was really the introduction through the dutch investors to that, to the family originally when you first met them? [00:45:16] Speaker C: Correct. It was sort of a combination of two ripples. It was the ripple of the dutch deal, a dutch client to Blair Booth. And then even though Jay and I had met in Chicago, we didn't know each other well, but Walton street was the lessee on the ground lease project of one of my german clients. We'll talk about in a bit. So I got to know Jay quite well through that project. And because of those two ripples that Walton street and Grub ventures came together in 2016. [00:45:45] Speaker A: And then either subsequently or prior to that, you formed a venture with Jamestown and grew up on another project. [00:45:52] Speaker C: Right? Yeah, that came much later. Orden had tied up a significant site downtown, just outside of downtown Raleigh, which was going to require a true mixed use opportunity, office, retail and residential, and a large scale project. And Gordon has great expertise in multifamily and office, but had done relatively little in the retail than service retail as part of an office project. And no one does a better job of adaptive reuse, large scale place making than Jamestown. And so I helped Gordon negotiate a joint venture with Jamestown to develop this new project, which is called Raleigh Ironworks. Again, about ten minutes outside of downtown Raleigh. Still within Raleigh, still within the beltline, but outside of the downtown market itself. [00:46:50] Speaker A: Yeah, I did. I will put this out for the listeners on our show notes. But I looked at the graphics and the pictures of this project. Very unique, very interesting. I don't know if I've seen anything quite like it. It's, you know, an adaptive reuse. Like, you know, maybe in Chicago there might be something like this because there aren't structures like this. It's a real interesting industrial finish, you know, and then read that adaptation. [00:47:23] Speaker C: Yeah. And the main buildings were the former offices and working facility of a group called Peden Steel, a steel fabricating company which had done much of the steel of major buildings and monuments in downtown Raleigh. Peden families still exist. And you'll get a kick out of this, John. I moderated a panel with Michael, or interviewed Michael Phillips, the president of Jamestown, at a ULI capital markets event in South Carolina last year. And we talked about Raleigh, our works, and the Peden Steel project, and a member of the Peden family came up to me afterwards, introduced himself. He was in the audience and was intrigued to hear all about what had been happening to his family's former steel plant. All very interesting stuff. [00:48:14] Speaker A: That's cool. Very cool. So in addition to that relationship, you brought an opportunity to Baronshire Harvard, which was a major REiT, I guess, unlisted Reitzen out of Texas. Talk about that relationship and how that developed. [00:48:30] Speaker B: Brad. [00:48:31] Speaker C: Yeah, really two sides to the story. To Behringer Harvard. It started again with the Dutch. One of the dutch investors that had committed to principles fund was PGGM, which is the pension fund for the healthcare professions in the Netherlands, and it's the second largest pension fund in the country. They were impressed by how perfectly the structure worked for a dutch pension fund to invest in us real estate through that commingle fund of domestically controlled reits. So they asked me, came to me and said, Brad, could you find us a manager who would do the same kind of structure to invest in multifamily? At that point, principal was not interested in doing single sector funds. So they said no. They declined, but said, feel free to go out and talk to somebody else. Well, in the years after I had done the transaction with Amlie and the metalworkers, Bob Aisner and Mark Alfieri of Amley had left, along with a couple of colleagues from Amlie, to join Behringer Harvard in Dallas. Behringer Harvard, as you said, john, specialized in the non listed REIT sector, and they had created a non listed REIT to acquire multifamily properties. We're raising money from private investors, but they wanted to add to that capital with institutional capital. They came to me and said, could I do the same thing for them at Behringer Harvard that I'd done for Amlie, which is to say, bring in institutional capital to grow their platform. So I had PGM investor that was looking for a manager to use the domestically controlled REIT structure to acquire multifamily properties in the US, and a manager which was acquiring multifamily, led by a team that had experience in structuring domestically controlled reits for dutch investors. Again, sort of ripple theory. I had two things that come together from opposite sides of the spectrum, but the net result was that between 2009 and 2017, this entity in which PGM had invested in three tranches of capital, and which was added to by Behringer Harvard's private capital through the non lister reits space, they created a portfolio which was ultimately sold to affiliates of Greystar in 2017 in a transaction that was then valued at about $4.4 billion. So the little venture ended up in a very big venture. And the other part of the PGGM work, which I want to mention is that it brought me into contact with Peter de Haas, who was a property strategist at PGM at the time. He'd gone on to do a bunch of different things, but today, some 20 years later, he's one of my closest friends in the industry. Peter's based in Rotterdam and he and I talk every week or two. And basically Peter does a lot of capital raising, advisory work, similar to what I had done. And so from time to time, when something comes across my desk that sounds interesting, but not something I want to do because I'm not taking on new clients, I'll give Peter a call and say, peter, how do you like the idea of helping somebody raise capital in Europe? And Peter will pick up the baton and run with it. So it's worked out quite well. And he's just a fantastic guy. [00:51:39] Speaker A: He's a dutch version of Brad Olsson. [00:51:41] Speaker C: Then he's the dutch version of Brad Olson. Different in many respects, but we share a lot of commonalities. That's good. So the relationship with PGM, the creation of that venture, was enormously successful for Behringer Harvard, and it was important for Behringer Harvard because it really put them on the map in terms of this capital for multifamily. But it, it wasnt the most unique thing I did for Behringer Harvard, and that had to be helping them enter the european real estate market for one of their opportunity funds. So up until this point, I had never taken money the other direction across the Atlantic. All of my work had been focused on bringing money into the US, never taking money out of the US. Id provided introductions to certain people who were looking at european realistic, but never really done anything to facilitate the movement of capital from the US into Europe. But Bob Asner, who was my original contact from Amlie, who was at Behringer Harvard, a number two guy at Behringer Harvard, came to me and said they wanted to go to Europe. They had this opportunity fund. The other opportunity funds were doing stuff in Europe. Would I help them go to Europe? I thought long and hard about it because it really was different than everything I'd done. But I told Bob I would take them to Europe. But there were three conditions. They had to start in countries where I had experience. They had to use a joint venture structure because I believe strongly that cross border investment should be done through local joint ventures. And they had to partner with people I knew. So my theory behind this was that inevitably property investment involves problems. Something comes up, it's an illiquid asset class. The market cycles are hard to time. And what I wanted to make sure was when, if a problem arose, it would be with a local partner who I would jokingly say would answer the phone when Behringer Harvard called. And my thought was that if I put them into a joint venture with a partner, I knew the odds were much better that that partner would answer the phone if there was a problem. That was the whole. The whole thesis behind taking Behringer Harvard to Europe was local, local market, local joint venture, a local partner. And our first transaction was to acquire an apartment building in Hamburg with a local partner whom I'd known for several years. And then ultimately the opportunity fund ended up investing in Germany retail with a partner I knew well, an office building in London with a partner I'd known since the early Richard Ellis days, and a portfolio of various assets in central Europe. Again, through that partner I'd known since the eighties. And then ultimately they ended up hiring a team that I introduced them to to open an office in Hamburg. So multiple ripples all over the place. When I think back to Oregon Burger Harvard, it was great, interesting work. Sort of met all of my criteria, people I like, trust, respect and projects where I could add value and work to have fun. And it was wonderful to work with Bob and Mark again, Bob Hesner and Mark Alfieri, and to work, to meet and work with Robert Behringer, the founder of the company, his son Brad and his son in law Michael Cohen, and the rest of this fantastic team in Dallas. Sort of little stories that you like to hear. John there were lots of surprises coming out of my first trip to Europe with a client. My favorite though was that we went to do that multifamily deal, the apartment deal, in Hamburg. And we discovered that it was not at all unusual in the german market for landlords to deliver apartments with no kitchen. This is sort of unbelievable in the us context, but to understand it, there's this very severe rent control law and regulations in Germany which essentially meand I that if a tenant signs a lease in 2024, you can't get him out of that apartment until he dies. If he wants to stay, he can stay until he dies. Now there are limited rent increases built into the law so that there is a little bit of rent increase that comes in, but you can't get the apartment back to market rent until that tenant decides on its own that he or she will vacate either because they die or they get married and they want to be replaced. So the result of that is that it's not at all unusual for residential lease in Germany to last 1015, even 20 years. And on that basis, the landlord says, heck, if you're going to be there forever, these are your expenses, not mine. So in a brand new construction apartment project in Germany, it is not at all unusual for there to be no kitchen. The tenant has to cover that. But in the case of our Hamburg deal, the building had been built basically just after World War two. It was well located, well constructed, interesting project. But I remember walking into apartments in that building as part of the due diligence and thinking that I just come out of a time machine. When the dial had been set for around 1950, literally, the kitchens had not been touched since the project had been built in the late forties. It was like going into the Smithsonian and looking at what did stoves, what did ovens, what did refrigerators look like untouched. Literally, in all those years, I would say that was probably the most interesting thing. And then the other part of that was because of the rent control loss. You couldn't do in the residential market what we do in the US, which is set the initial rent based on what the market is today. And then when the market recovers and the leasing fires in a year, increase the rent there again, because you're locked into whatever rent you set first. There is no free marketing at discounted rates to try to lease up vacant space. You basically keep that space vacant until somebody gets around to paying the rent that you set at a higher level, because you know they're not going to be able to increase the rent until that space is vacated anyway. All very interesting differences between the way the multifamily market works in Germany versus the US. [00:57:57] Speaker A: Is that countrywide or is that just. [00:57:59] Speaker C: Oh, yeah, for sure. And then worse, in certain markets, Berlin has even more stringent ones. In fact, in Berlin, which has a. The country has a major housing shortage, which is not surprising given the way we view impact of rent control in the US. But very recently, the city of Berlin just bought thousands of units from a cooperative housing authority so they could take them off the market, literally take them out of the private market, so they could control completely how the apartments are rented and at what rents, theoretically, to create more affordable housing. But the net result, of course, of taking units out of the market is that you create less opportunity, fewer opportunities for those tenants who are in the market. It's been a real issue in the. [00:58:43] Speaker A: German market, I would think that somebody forward thinking would legislate that law out long term. [00:58:51] Speaker C: The problem, John, is who votes. And the people who vote are the individuals who are trying to find a housing in a former rate. And they convince the legislatures that the problem is the landlord, not the private market. By contrast, the Netherlands had moved away from restrictions for a period of time. And now, for political reasons coming out of COVID and the recession, they're moving back toward regulation, which has the exact opposite effect. At least most of us believe the exact opposite effect of what they're trying to accomplish, which is to create more supply at affordable rates. [00:59:27] Speaker A: So how did Behringer, Harvard underwrite this restriction? And, you know, I mean, I know that cost of capital in Germany is much lower than the United States. So I guess you have very low returns and low expectations over time. Is that kind of the thought process or what? [00:59:46] Speaker C: It's a combination of things, John. The one opportunity that the legislation provides is that if you make significant physical improvements in the space, you can increase the rents accordingly. So the model for this acquisition was there would always be a relatively small number of units that would turn over, literally because somebody died or got married and moved out. And you'd go into that kitchen that was built in the 1950s and go ahead and put in modern kitchen, basically create a market for a modern apartment or apartment with modern amenities, and set the rent at the new level, and then that rent would grow at the statutory level. But you get that one time bump for the units as you redid them. And there were enough units that you could imagine over a period of time. Again, I'm exaggerating that no one ever leaves. People do die and people do get married and move out, and they need a bigger apartment. So every year in a project like that, there would be some level of rollover, nothing like the US, and you would increase the rents in those rolled over units and create added value. But you're right, you underwrite differently than the US. It's typical in Germany that the underwriting is current cash flow oriented. There's no sense of what's the IRR or multiple on equity return. On equity, five or ten or 15 years out. It's really, how much cash can I take out of it? And as you say, at the time we were buying, interest rates were low, and so you could make an attractive levered return. And if you built in this notion that you're going to be able to create added income, increase the NOI, and then sell at the low cap rates, in three to five years, having reset the rent on, let's call it ten to 20% of the units, that growth in income, which is substantial because the rent on the renovated one would be substantially higher than the rent you were buying at, create enough value increase that it worked for a us opportunity fund. [01:01:56] Speaker A: So you made good returns in the overall. Were you involved in round tripping deals? [01:02:00] Speaker C: Yes, yes, I was there with them, actually was there with them when they round tripped everything they did in Europe, and for the most part they did fine. Again, it was market sensitive. So if you got in at the wrong time or got out at the wrong time, the returns wouldn't have been what you expected. But in general, I would say that their trip to Europe proved acceptable. Challenges exist because of market conditions and the changes in the us market. As you remember, John, the non Lister REIT sector went through a major upheaval, and Behringer, Harvard, like all the other managers who were doing non listed reits, got hit by that as well. [01:02:40] Speaker A: It's interesting, if you were to compare an investment strategy that you made in Germany with the one in the United States, that's analogous to it with regard to product type, how would you have compared it, Hamburg being a very mature market? I don't know if it was a portfolio around the whole country or was it around Europe, did they go to other countries as well? So I assume there's a variation in investment strategies for market there to some extent, yeah. [01:03:11] Speaker C: I would say that the single biggest difference of comparing Germany with us was this notion of rent control and relatively low growth in the rental levels. But the flip side of that is because it was almost impossible to build new multifamily in almost any major german city. In a location like the one they bought in, there was virtually no downside risk. You wouldnt have the oversupply issue that you have in the typical growth markets in the United States. So the residential market, capital market in Germany is dominated by families and institutions who were essentially buying a bond. They were buying because they knew that, that, that the rental level would never go down, because if you ended up with a vacancy, you would fill it right away. And they were content, they are content, have been content to clip the coupons on that bond like investment and put it in their portfolio and never do anything with it. They didnt have to worry about it. They werent trying to achieve maximum irrs or trying to multiply their equity. They were just looking at a bond. They were trying to take what was okay at the bottom. Residential yields would have been 2.5, something like that. But at that point, the german bond was zero. So if you're a german institution and your alternative to a bond at zero is to buy German residential at two and a half. Two and a half look pretty good. [01:04:44] Speaker A: I guess I'm trying to think, if I'm an investor in Behringer, Harvard's funds, why would I want to be invested in Germany, to be investing in the United States with more growth prospects to it? [01:04:57] Speaker C: So the reason, John and I'll make it simplistic, but the reason is simply that there was virtually no opportunistic, very little value add capital available in Germany. So if you could find a value add or opportunistic investment, you were not competing with local capital. [01:05:18] Speaker A: Got it. [01:05:18] Speaker C: And so in the case of the Hamburg deal, which is I would call value add, the play there was that you were going to have rollover and the value creation was putting the money into the units, which was not a german model. The german model would. The typical german investor in the deal in Hamburg would have said, oh, great, ten rolls over, we'll release it tomorrow at basically the same rent as today, or slightly better, but we're not going to put capital in the. We're not going to get that capital back in the mindset of the german investor. So we'll just keep doing what they've been doing for 50 years, which is releasing an old crummy, an old apartment that hasn't been upfitted at whatever the market says the rent is for. A 1950s kitchen. That was the german mindset was there. [01:06:05] Speaker A: For tearing down buildings and redeveloping. [01:06:08] Speaker C: No opportunity, almost no opportunity to do that. Zoning and planning makes it very, very difficult to do what we would do in the US. [01:06:17] Speaker A: Let me sidecar with a moment with an earlier guest of mine, Bern Murphy, who wrote a book called Le Deal, about his dealings in France and subsequently Germany and England, about rezoning retail property there. He had tremendous difficulty, and in fact, there's a part of his book talking about dealing in Germany. At one in Saxony, which I guess is one of the states there. It was. I think it was Schmidt who became the prime minister, basically threw him out of the realm and said, we're not going to bring retail to this property. [01:06:59] Speaker C: We just aren't going to do it well. But the reason for that, John, is quite simply the model of german retail. It's changed over the last 30 years or so, was strong local downtowns in a little village. It'd be a grocery store and a half a dozen other stores. And the last thing they wanted was for out of town retailing to kill downtown shopping. Now, John, we've seen it in the US. We know what happens when you go out of town and you got a nice, really nice little downtown village feeling retail. And then some US developer builds 200,000, 300,000, a million square feet 20 minutes out of downtown. Nobody shops downtown anymore because they want to go to the modern fancy job. And that's what the german zoning and planning restrictions are designed to prohibit and prevent. [01:07:47] Speaker B: Yep. [01:07:48] Speaker A: And he had a trouble, but he eventually did build one there. Took time. Anyway. It's just this whole zoning thing there is very restrictive. And I guess his overall observation was, the US is forward thinking, the Europe is past thinking. They want to keep things in place. They're not thinking about growth that much, at least from perspective. [01:08:14] Speaker B: True. [01:08:15] Speaker C: I would argue though, John, it's why they've got some great historic buildings in their downtowns, of course. And our old home of Chicago had some spectacular old buildings, almost all of which were torn down and replaced with buildings that have no architect, have relatively little architectural history associated with them other than the really high end ones which are done by great architects. It's a trade off. It's definitely a trade off, no question. [01:08:44] Speaker A: So let's talk about another relationship. You got introduced somehow to USAA. Talk about that relationship. [01:08:53] Speaker C: Sure. Well, you and your audience know Len O'Donnell from his days in DC. That's right. Len is now and has been a great CEO for what is now called Affinius Capital. They bought the real estate business from the holding company, the parent company, USAA, the insurance company. I worked with Len for a number of years after he joined. I loved his guidance, his energy. He's a great CEO. But when I first started working with the USA, he was not the CEO. Pat Duncan, Washington and my relationship with USA again started with this ripple that flows out of my relationship with Steve Collins around 1999 or 2000. Steve, always at Larsen volume and Gould there in DC, was pitching USAA to sell one of their buildings in the district. He was competing against the JLLs and the Richard Ellis by then CBRE, and he wanted to show USA that he could reach foreign investors and he would do so through my connections. We didn't win the assignment. I don't know who got it, but at that time, the pitch I participated in, I met Susan Wallace from USAA. Susan was running the equity side of the business for USAA at that point in time, and my paths would cross. Susan and I would cross paths again. We got to know each other well during the. Each of us was involved with a fire. Susan knew what I'd done with principal, she knew what I was doing with Behringer, Harvard, and in late zero, nine or early ten, she asked me if I could help USA access Capital in Europe. At that point in time, USA had a couple of foreign clients, but the bulk of their money was domestic. So Susan asked me, could I help? And it's sort of, again, back to my business model. I turned her down. I said no. I told her I didn't think it was a good time to be raising capital in Europe for us real estate, and that I just wasn't comfortable taking their money as a retainer, given the fact I didn't think I could succeed raising capital for them. So about a year later, I guess, well, a year and a half later, February of 2011, the market had changed. I saw an opportunity for us, so I entered into an agreement with USAA that would last until 2017. Susan retired about then, but she remains a close friend to both me and to my wife Louise. And shes a fantastic person. I love working with Susan and we did some really interesting things over that six year period of time for various of their vehicles and with various investors. But I'd like to highlight an investment that I helped them secure for their government building fund. John, you'll know the government building fund owns a bunch of buildings owned by, occupied by federal and state government tenants, including a number there in the district. But I help them secure an investment from a french investor, french institution into their government building fund. And to me, it's particularly interesting for three reasons. First of all, it's the only transaction I ever did. It involved a french institution. This is a french insurance company. The French are different than the Germans are different than the Dutch are different. They're different than everybody. The market is dominated by banks and insurance companies. They do not have a traditional pension system. As we ran into, I ran into in the Netherlands or Canada anyway. So it's my only french deal. Second, it was without a doubt the most international, most multinational deal of anything I've ever done for USA or for anybody else. So just to recount the parties involved, so I've got a french insurance company as an investor. The portfolio manager at the french insurance company is a finnish woman who was introduced to me by a swedish friend who was living in Paris at the time. So I've got, got, if I count the US, I got uS, France, Finland, Sweden. I mean, it's crazy. It all came about because of my relationship with Steve Collins, which came from a dutch client. So it's all. It's incredible, incredible multinational. This is like throwing all the ingredients into the pot and coming up with a stew. But it's also the. The perfect example of my ripple effect. Building bridges, my notion that I'm not focused on today or tomorrow or next quarter, even next year. My whole thought process has been, find people you like and spend time with them, as you and I have done. Sometimes they end up with something, sometimes they don't. But in this transaction, from the time I met the person who basically initiated it for me, who introduced me to the finnish investor at the french insurance company, from the time I first met him, the time we closed the transaction with the French, it was 27 years. So 27 years is my all time record for, from start to finish, how long it happened. And it happened because of Eric Sonden, who was the swedish guy living in Paris. I'd first met him in 1989 when he was the executive director of something called Sepa, the Scandinavian International Property association, sort of an a fire work for the Nordics. I just rejoined Richard Ellis in 89, as I've said, and he invited me to come up to Stockholm to talk at their annual meeting about us markets. Over the years, Eric changed jobs, he changed residences multiple times, but we stayed in touch. He and his wife Cecilia, go back into my story a little bit later, but I introduced Eric to the people at USAA, and we were having a. A client event, a business development event at a really neat restaurant museum in Paris. And Eric introduced me to this finnish woman, Mina Miralan, who came to our event, and it turned out she was just assigned the responsibility for expanding their real estate holdings outside of France. And the USA's government building fund fit her parameters perfectly. She was looking for low variation, stable income, and it worked perfectly. So all those things came together. The other funny story in terms of Mina is the year or two later, she was at my dinner at Expo Real, and we'll talk about dinners, but I assigned seats. I told everybody where they had to sit, and I put her next to a banker from California who was working with USAA at the time. And it turned out he was married to an Ameri. He was married to a finnish woman. So by sheer coincidence, I put her next to an American who spoke Finnish, and almost no one spoke Finnish. Speaks Finnish. It's not a language you pick up readily. And by the way, back to the DC connection. My first trip to Finland was with Esko Koronen, who had joined us in the DC office and Esco's Finnish, so we're going around Finland. I'm traveling with an American who spoke Finnish, which was incredibly unique at that point in time. Anyway, back to the USA. As I had done with Behringer, Harvard, helping them recruit a local team. I helped USA open its first office in Europe by helping Susan recruit Maxim Belo, who was a German living in Munich. I got him to move to Amsterdam, and he became responsible for expanding USAS relationships with european investors. And again, sort of. You asked this question before, I think about principle, but in three cases, principle, Behringer, Harvard, and USAA, I helped them develop a capability that meant they didn't need me anymore. Max has done a fantastic job for USAA. He's still there. We talk regularly, we see each other. But they didn't need me after they hired Max. They didn't need me the same way after they hired Max, which is fine. We had a great run. I had a lot of fun with them. It was good. [01:16:46] Speaker A: Fascinating. So that was to 2017. And then another woman who I actually asked for commentary, and I'm going to share her notes. Hired actually right out of college in 1990. Her name is Lily Dunn, and she evolved through her career and became the CEO of Bell Partners now, which is a North Carolina based investment company. Talk about that relationship and how it developed. Obviously, you knew Lily from way back, so she stayed in touch with you, I assume. [01:17:20] Speaker C: Oh, Don, this one involves your alma mater, University of Michigan. So I first met Lilly in the fall of 1989. We transitioned from Lexington to Richard Ellis. And our CFO, Nancy Goble, had graduated from Michigan, I don't know, ten years earlier, son. So she and I went up to the campus to recruit. We were looking for new analysts. It's all part of that expansion that Richard Ellis wanted us to undertake. So we met and subsequently offered a job to this incredible young woman. Bright, engaging, wonderful personality. Her name was Lily Friedman at the time. And you're right, you know, as Lily Dunn, she's now a president and CEO of Bell Partners. So Lily joined us after graduation in May or June of 1990. Fantastic team player from the beginning. I loved working with her. Super personality. Took as much responsibility as we give her a Don. Jerry and I all enjoyed working here. Great relationship. But then this market turndown happened. I told you we had to let people go. We were forced to downside. We didn't go. A bunch of analysts we hired in 89, 90, including Lily. So she's been with us for less than a year, I think she's got a career in real estate with Richard Ellis, and we call her in the office and let her go. The story could have ended there, but Billy remembers this story a little differently than I do. But I'll tell you the true story and let Lilly tell her version of it separately. But at that point, Don Bodell, my partner, was close to Trammel Crow people in Chicago, and Trammel Crow residential had set up, and so Don arranged for Lilly to get an interview at Trammel Corps residential. I hoped her get a job there. Lily will tell you I did it. I've told her it was Don. She remembers it was me. She may be right, I may be wrong, but I'm going to give credit to my partner, Don anyway. So she went to work for Tramble Corps residential, which ended up being Avalon Bay. She had 20 fantastic years at Avalon Bay before she was recruited by Bell Partners. Bell Partners, as you said, based in Greensboro, North Carolina. Lilly lives near you, up there and outside the district. And she said, fine, I'll come basically as the CIO, but I'm not moving. So she opened an office in Alexandria, and she still worked technically out of Alexandria, but we'd stayed in touch when she was at Avalon Bay, especially in the later years. At Avalon Bay, she had responsibility for raising capital for institutional funds, so we would compare notes. Will and I stayed in touch, and then she moved the bell and she asked me to help them raise capital. At the time, I was still doing my work with USA, and I didn't like having clients that had overlapping strategies. So just what I'd done. Initially with Susan, I turned Lilly down. But I did tell her about the global property market conference in Toronto and encouraged her to come up there with me 1 November December. And at one of the opening receptions, I introduced her through my canadian pension fund contacts. Two of those pension funds ended up in Bell partners Fund five as Lilly was expanding their institutional business, creating another closed end fund. But by the time Lilly was ready to start raising capital for fund six, I had no conflict, and Lilly retained me to help her in Canada and Europe. We raised money both places for fund six, both in Canada and Germany, and then she retained me again for fund seven. I retired by the time they got around to raising capital from fund eight, but we'd had a really good run for five years or so, and it was all because that was the bridge I didn't burn with Lilly, with the former Lilly Friedman, now Lilly Dunn, with no expectation in 1990 1990, 219 95, 2000 that we'd ever do business together. Just because she's a fantastic person. And we had a great relationship. We kept in touch. And as a result of that trip to Ann Arbor in the fall of 1989, Lily and I did business together. And the investors to whom I introduced, Lilly and Bell partners, I guess, have done. I guess she's probably raised more than a billion dollars from those investors over the funds that she's had. I have to say she's one of the most remarkable people I've ever met since I graduated from law school 50 years ago, she's one of my favorite people. She's had unbelievable success. She's the first family, the first non Bell family member to run the company as president CEO. She's won every imaginable award in the multifamily space. But she's still the same down to earth, wonderful human being that I methadore in 89 in Ann Arbor. Don't get me wrong, she can be tough. And I've told Lily that despite our personal relationship, she negotiated a tougher deal with me than any other client because that's what she wanted. She was doing the best for her client, and I wanted to work with Lilly and want to work with Belle, and I was willing to. To make a deal with Lilly that I wouldn't have made someone else. But she's fair and honest. I have stories about Lily that would go on forever, and she's. Candidly, she's almost like family to me. I sometimes refer to her as my niece. She's the same age as our older son. And as Lily knows, I would do just about anything for her. And I continue, even after retirement, to provide guidance, help, whatever. She's the classic mentee who became more important than the mentor, John. She's lapped me multiple times in terms of career, and I'm delighted every time she laps me. She's fantastic. [01:23:17] Speaker A: It's interesting that she worked so long for Avalon Bay. You never did business with her there. [01:23:23] Speaker C: Well, they were big public Reit, John. They didn't need me, or so they thought. [01:23:29] Speaker A: So they didn't need foreign capital, per se. [01:23:31] Speaker C: They had foreign capital, but they were avant bay publicly traded Reitzen. They were, they had dutch investors in the parent company, in the REIT. They knew all the foreign players. And they did. They did, they did some side by side investments. They were mainly investing for the REIT, but they did side by sides. And that was one of the things Lilly did, was they helped them grow a third party investment management business at Avalon Bay, which is how she became active in afire. We would see each other at afire events. [01:23:58] Speaker A: I see. So because of their strength in the market, they really didn't need your help. [01:24:06] Speaker C: They didn't work with people like me. No, it wasn't just me. I think they had their own investor relations team and they had Lilly, and they thought, okay, we can cover what we need to cover. [01:24:17] Speaker A: Interesting. [01:24:18] Speaker B: So that's great. [01:24:19] Speaker A: That's a great story. And I'm going to share Lilly's comments. Me, and I'd also like to say that, and I hope she's going to listen to this, that I would love to have her on as a guest for the podcast. And I've asked her once before, but she just said, I just don't have time right now. [01:24:37] Speaker C: So I believe it. I believe it. She's incredibly busy. Not only that, she's got four sons and, you know, they've got lives too. So. Yeah, I get it. [01:24:49] Speaker A: So we've so far talked about the Netherlands, not as much about Canada, but about France. You haven't said much about Germany, so maybe go into a little more depth into Germany and your german investors. [01:25:01] Speaker C: Sure, John, a little bit background on my work with german investors. So I started going to Germany shortly after I rejoined Rich Ellis in 1989. Scott Morgan, who was the head of the Frankfurt office at that time, encouraged me to broadened my horizons beyond the Netherlands. He thought german investors, german institutions, were getting more and more interested in the US. He saw capital moving into the US through various vehicles. So he organized my initial meetings on my first trip over, including the head of one of the largest open end fund managers. So the german real estate industry is basically dominated by a series of open end funds, basically call them real estate mutual funds, run principally by the major banks and then close end funds. Syndications, we would call them as our 1980s version of syndications, closed end funds organized by either one of the banks or by private managers like a Jamestown or a TMW. And then institutional investment is either coming out of a handful of the insurance companies, you would know, Meog alliance, those groups, or by a series of professional sector pension funds. So the doctors have in each federal state would have a pension fund, the lawyers, the accountants, the auditors, the dentists, that you name it. Some of those aggregate across the federal state lines. Some are just literally the state that includes Frankfurt would have a lawyer's pension fund for just lawyers and that federal state. Anyway. So I first met through Scott, and then I was in Stockholm for that SEPA conference. I mentioned Chris Jarvis from Richard Ellison's Berlin office was there talking about german markets. And I built these relationships within Richard Ellis, Germany. And then a few years later, a fire started doing one day conference, a day in Amsterdam, a day in Frankfurt, over a series of years. And that gave me more exposure to german investors, but I still haven't done any business with them yet. I would say that my experience with the Germans in those early years, I couldn't help but contrast what I was hearing, seeing, doing in Germany with my experience in Nella. It's interesting, when you ask the Dutch about the Germans, you get a view, and then you ask the Germans about the Dutch, you get a view which seems to be completely contradictory to one you heard from the Dutch. But the first thing I noticed, and it was striking, was that far fewer senior german real estate people were comfortable speaking English than their dutch counterparts. And it made it harder. It was harder to access the senior german people than I had found in the Netherlands. So there was this reluctance, if you were a senior, if I was trying to reach a senior german guy in real estate at one of the open end funds or insurance company or one of these specialized pension funds, they were reluctant to meet. And I'm convinced part of it is they just didn't want to speak English. [01:28:05] Speaker A: Was this before the EU was formed? [01:28:07] Speaker C: Oh, no, no, no. This is much. This is much later. Yeah, we're, you know, we're into. Well into the late nineties, early two thousands. So the world is, it would, it would seem, opened up. But with the time I spent in Europe, in the, let's call it from 85 to 2000, well, to the present, I developed a theory about english language skills in various countries. I have these pet theories, none of which has been proved correct, but which I find entertaining. I decided that the larger the country in terms of its population, the less likely it was that their people were going to be comfortable speaking English. It's true of Germany, it's true of France. It's true of Spain, it's true of Italy. And my theory is that in the large countries, it was feasible and economical to dub english language television movies into the home country's language. So if you're in German and you're watching us soap operas or us series, it was in German. It was dubbed. And, you know, if you go on. If you go on Netflix now, when you watch a dutch movie, they'll have subtitles. They'll have dubbing again. What I found was that in the large countries, they dubbed into their local language in the smaller countries. Now, when's Portugal, the Nordics, they use subtitles. So if you're a dutch person, you're a dutch teenager, you're a dutch kid, you're a dutch adult, and you're watching us television or a us and english language movie. You're hearing the english words and you're seeing the dutch words underneath. So your mind is you're learning English as you're watching them anyway. So that's. To me, it ends up being an interesting difference between the two as the next generation came into place. Obviously, English is more widely spoken. So among this next gen, not our generation, John, but the one after us and the one after that, they're very comfortable speaking English. There's another huge difference, and again, this is one which has shifted in the years I've been going to Germany. But the Germans were incredibly more formal than the Dutch when it came to personal relationships in the Netherlands. I was on a first name basis from the very first meeting. Almost without exception among the Germans, even among coworkers, the younger person, the junior person, would never use his colleague's first name. They could have worked together 20 years and it was still Mister Coe, Mister Olson, the senior person was always deferred to in that way. And so when I got there, and I'm John, you know me as well as almost anybody, I'm very outgoing, open, whatever, and I've been used to dealing with the Dutch. But then I quickly learned that the Germans were different than the Dutch. And so I adopted the german convention. I never use someone's first name until he or she told me to use the first name. And I have all sorts of funny stories. We could take another hour telling german cultural stories, but I will say it's a small thing, but I think that my german contacts appreciated my cultural sensitivity, the contrast between me and the other Americans who were knocking on their doors. At least among the older Germans, I think they appreciated the fact that I was sensitive to how they did things. Anyway, my first german client. [01:31:42] Speaker A: Straighten you right up front on that, or did you pick up, did somebody straighten you out right up front or did you pick up on it? Just, you know, from observation. [01:31:52] Speaker C: Combination of two. John. I had german guides, german cultural guides, in terms of the rich ells, people who would have been clear in using first last names for when they introduced me to people. But then it became really obvious early. And the most obvious ones are just. They're almost comical in terms of how serious, serious this convention was for the Germans. Anyway. [01:32:16] Speaker A: I sense that the german people are, and this is, I've read culturally about them, just very rigid in their culture. They're very. You know, everything's precise, you know. And the Swiss are like that, too. Just everything is very organized. [01:32:30] Speaker C: So you're falling into a trap that I fell into before I went to Germany the first time. You're absolutely wrong, really, in very meaningful ways. And we think of Americans as being free and independent thinkers. But we'll stand in a line at McDonald's or a train station or wherever and wait our turn. There is no line in Germany. So if you go to board of. Go to board an airplane in Germany and, you know, it's literally a rugby scrum to get to the front of the. To the gate. If you. If you go to any restaurant, any fast food restaurant, it's a real. It's a real. It's unusual. It's. It's increasing, increasingly common. But in the early days, there was no such thing as a line. We joke, you know, we. You need to distinguish between the swiss punctuality and rigidness or whatever with Germans. The Germans will all tell you their trains never run on time. We think of Germans running the train. No, the swiss trains run on time. The german trains do not run on time. So this. We have this theory coming out of Hitler and the fascists and all this, that everybody's lockstep doing that is not true of most Germans as it relates to those little things like standing in line. It is true of this formality to which I referred, but it is not true in sort of day to day living that you and I would have anticipated. [01:34:01] Speaker A: Interesting. [01:34:02] Speaker C: Anyway. That's right. Anyway, my. My first german client was TMW, which is a fund manager advisor, which ultimately was bought by prudential. It had. When I was dealing with them, they had dual headquarters. They had a magnificent, magnificent headquarters, their main headquarters in Munich and their us headquarters in Atlanta. They advised a number of institutions, including one of those large open end funds, DeCA, that was buying in the US. And working with Steve Collins again. We helped TMW acquire 24 45 m street northwest for Deca there in the district. I would say that in that transaction, we got to work with some great people from Deca, because we were. Although TMW is between us, we knew the German. I knew the german people. Louis Steinmetz, Hans Haug were at Dec at the time. Both of them have became and have stayed as good friends. Uli's now got a senior job at Deutsche Bank's real estate arm. And Hans was a senior guy at Heinz in Europe and now heads up development for Patrizia which is another large Sherman manager. And candidly, the best part about the relationship with teamw, the work with the people. So at the Deca side and then on the TMW side, David Paul, who is in Atlanta, was there and remains a very close friend. He's now at gtIs. Just great, great people. There's another one of these. I've talked before about how much I enjoy accidents. Accidents have had a huge impact on my career. And the summer of 2000, I had another one of these amazingly fortuitous accidents. I will admit sometimes the accidents happen because I let them happen where I put myself in position to let them happen. And that was the case in this situation. It was the summer of 2000, maybe early summer of 2000, I was in Frankfurt. And somehow or another I found out that the main newspaper, the Frankfurter Allgemeine Zeitung, which is the daily Frankfurt newspaper, sort of a cross between the New York Times and the Wall Street Journal. It trades all across Germany, even though it's printed, and main city is Frankfurt. Anyway, they had a weekly real estate article and the real estate editor was a guy named Jens Friedman. And I'm in Frankfurt and I say, all right, I need to meet this guy because he's writing about real estate. So I managed to get a meeting with Jens and we hit it off immediately. And we're talking about, this is 2000, so we're talking about german interest in us markets, the state of our markets, what's going on? What should Germans be thinking about? And he's making some notes and he's asking me good questions. [01:36:47] Speaker B: And he said, you know, Brad, if. [01:36:49] Speaker C: You'D like, you could just like, send me some comments about the us market and I'll put it in a future issue of my paper. Brad being Brad, the remainder of that week long trip to Germany. In the weeks two or three weeks after I got back to the US, I wrote and I wrote and I wrote and I sent my draft to Mister Friedemann. And it was like, oh my God, Brad, I had no idea you were going to send me anything like this. I can't possibly include this in one of my articles. Would you mind if I serialized your paper on us markets and ran it over the next three weeks of the newspaper under your byline, not mine? [01:37:34] Speaker A: That's great. [01:37:36] Speaker C: So in the late summer of early fall of 2000, my treatise on the us real estate markets appeared in the most important newspaper in Germany for three consecutive weeks, just in time for reprints to be available at the stand that the newspaper had at Expo real that October. So again did they translate it to German? It was translated. They had it both in English and Germane. So whoever picked up the paper could read it in either language. I don't make too much about it because I was spending a lot of time in Germany calling a lot of people. But the articles came about as they say almost like as an accident. But they definitely helped put me on the map with german investors. People saw the article and knew who I was and either reached out to me or when I reached out to them they said oh yeah, I know who you are. You're the guy who wrote that article's articles. The Fazden. You must know what you're talking about. So let's talk again. It would not have happened except for the fact that I reached out to Mister Friedman and he gave me the time and I took the time to write this piece anyway. [01:38:48] Speaker A: Now Brad, in every european country that wants to invest in the United States and you make a nice little extra bop from that just write an article and posted in all the leading newspapers. [01:39:04] Speaker C: I asked but you know any event it's that again for your younger listeners. This notion that you can make accidents. The accidents aren't all bad and you can help make accidents happen which are positive. So that's sort of my story there. It was great. So my second german client which is HCI capital which is a syndicator and fund manager based in Hamburg found me rather than me finding them. And this is sort of by now I've built a position in the german market. People knew me. And Albert Georg who was then the number two person in real estate at HCI had been born in Germany but had been grown up in Colorado. His dad was an architect who moved the family to Denver area because of everything that was going on in Germany in the sixties and seventies. And so Oliver with a high school in Colorado he went to University of Colorado for college. But then all of a sudden the wall comes down and the german world looks very different. And he figures that there must be interesting opportunities. His father done real estate in the US. So Oliver goes back to Germany in the. I'll say late nineties probably late nineties figures he can do real estate business. Taking advantage of the opening of the churn market. And I don't remember the precise details but I think Oliver got my name from Jim Federate a fire and reached out to me and said HCI, this syndicator, german syndicator was trying to bring capital from Germany, german private investors to the US. As we've been talking about. He said they'd enter into an LoI to form a joint venture with a group out of New York called Colonnade Properties to acquire a project called Douglas Entrance, an office park in Coral Gables outside of Miami. He wanted to know if I would be willing to review the Loi and give him my thoughts. This was, you know, Brad, we know you know german new testament. We know you know the US. Would you mind taking a few minutes and looking at this Loi and letting us know what you think? Well, what was expected to be a minor consulting assignment ended up with them retaining me because the Loi was a disaster. It had been negotiated. Even though Ollie Oliver had experience in the US, he had not done a deal like this before. And the new York partner had had figured out a way to make it more attractive to them, to the us partner. Anyway, so I went back to them and I said, you need to do ABCDE. And they said, can we hire you to be our negotiator in the transaction? And they ripped up the Loi and started all over again and ended up buying the deal, doing very well with it, and then retained me to help them find more deals in the US. And we bought a majority interest in 203 north LaSalle. John, that you will know where DLA Piper's offices, headquarters were. And they. And then I also helped them create them. They create a series of funds of funds which they marketed to. They were. They distributed their closing funds through local distributors. So financial advisors, anyway, so they want to create a series of fund of funds. They did fund of funds for the BRIC countries. They did fund a funds of opportunity funds. And I helped them create those funds and help them market those to. To their distributors, also help them market this closed end fund they created for 203 North LaSalle. So I talked about how the Germans dubbed their us movies and television shows. What I found out was that when one of these german syndicators would create a marketing program for their closed end real estate fund, they would frequently have videos. So HCI created a video for the marketing of the closed end fund for their acquisition of 203 North LaSalle. And in the video, they interview me on the top floor of 203 North LaSalle, looking out across the city. And I gave them my thoughts about the market and the building and why it was a great opportunity. And then it was several months later that they sent me the video. And of course, the video has now been dubbed into German. I have no idea whether they got it right or not, but one of my german friends saw the video. And he said, brad, I don't know if you know this, but the guy who dubbed your language, they have dubbed your interview is the guy who does Tom Selleck's lines in Magnum PI. So I was immortalized by the german Tom Selleck, I guess, in that video. Anyway, so the group from HCI ended up becoming the office of Behringer, Harvard in Hamburg. [01:43:57] Speaker B: This group included Al R. Georg, Olaf. [01:43:59] Speaker C: Fortman and I Kabut. And they became very close friends to this day, very close friends. And then that Oliver. Georg, I'm going to switch to my other current german client. It was September of 2020, and I get a call from Oliver. He said, brad, he's now working at a basically a brokerage advisory business in Germany, in his hometown, which is Bremen. Brad, I'm working with a german family office and we're buying sites and developing multifamily here in Germany. And the family office, the woman who's running real estate for family office is saying she'd like to come to the US to do multifamily in the US. I've told her that she doesn't want to call one of the brokerage firms. She needs to call Brad Olson because you'll give her straight advice, as you did for us at HCI. Would you talk to her? So this is September 20. I was intending to be retired by the end of 90, but Covid intervened. And I said, sure, I'll talk to her. So I get on the phone. This is, again, nobody can move anyplace. We've got Covid restrictions. I get on the phone with the woman and she tells me about the family, and she tells me about what she's trying to do. And for the next six or nine months, essentially, I'm giving her an oral version of the treatise that I wrote for the FaZ 20 years earlier. I'm telling her all about the ups and downs, the pluses and minuses, the how tos of investing in the us real estate market. And as it relates to multifamily, of course, I had the experience with Belle. I had the experience with growth ventures. Well, I was able to give her a lot of information. And as we came out of COVID I'm getting now to retire. We're jumping ahead to my retirement story, but I'm getting ready to retire at the end of 21. And she said, okay, I want to hire you now. I want to actually make you our paid advisor. I want you to take our seat on the board of our us investment company. Will you do it? And by then, I'm now ready to retire. I've agreed with Gordon that I'll stay on as citizen advisor. Louise has agreed that I can stay on as his. So I go to Louise and say, all right, my german client wants me to work after retirement on their behalf. How does that feel? He said, no, you can't, I don't want you working that much. Tell him no. So I go back to my german relationship. I say, I'm really sorry, but my wife says no. They're laughing and they're saying, you know, really? Your wife making this? I said, yeah, because I'm retired. The whole idea here is that we're going to spend time together. I'm not going to work. And they said, all right, so we need to figure, we need to solve this problem. So the negotiation that ensued was not about how much they were going to pay me or what my title would be or anything else. As I said earlier, it was all about how much time they could have. And so we agreed they could have 10 hours a month. But this relationship came as a result specifically of Oliver Georg, who came to me originally for HCI and then worked for Behringer Harvard, and then came back to me and said, brad, I need your help on this. So it's again this notion of the relationships, the value of relationships and networking. But the other german family office, John, that you and I worked on together came about as one of those other ripples that came out of that first assignment for the dutch investor Wilma, when Rand diamond, who was at Ruboff at the time, introduced me to David Fitzgerald in Boston. David had worked for Grub and Ellis in London before he came back to join Whittier, Whittier Partners, which would later become part of CBR e John anyway, while I was in London, he met a family in Hamburg. So I've now got my own business, Atlantic Partners. He's now at Whittier Partners, which is part of GVA, and they're trying to broaden the GVA name across Europe. So David joins me on a trip to Germany. He introduces me to this family, unbelievable family, incredibly incredible human beings, unbelievably conservative, the most conservative investors I ever dealt with, and very private. But after a series of meetings and I guess I would visit them once or twice a year, they asked me to help them source least fee positions in major us cities. So they would own the land under the building and I and the ground lessee, their tenant, would operate the building, pay them rent. They owned three of these in Manhattan. They wanted to acquire more. They owned nothing in other cities. And under this typical 99 year ground lease structure in the US, at the end of the ground lease, the improvements revert back to the owner of the land at the expiration of ground lease, no cost to the owner of the ground. So it's a very conservative structure, secure, because if the ground ten ground lessee doesn't pay, he loses the building immediately. So they always pay. There may be CPI increases, there may be fixed rent increases, but where does. [01:49:00] Speaker A: Investment strategy derive from? I mean, were they barons or something in Germany? [01:49:06] Speaker C: No, no, no. They were very successful business people in the shipping business, and they owned real estate in Germany, but their view was, if they're going to go someplace outside of Germany, they wanted to go on a very conservative basis. So they'd been introduced to somebody in New York who helped them buy these ground lease positions in Manhattan. And the goal of the family. So the brothers who run the business are roughly my age, and when they were investing, they were investing not for themselves or their children, but for their grandchildren. So they were quite willing to accept low initial yields, which is the nature of that structure, in exchange for the security, knowing that their grandchildren would have something at the end. So I was able to identify a deal for them in downtown Chicago. It was the ground under a major hotel on Wacker Drive, Walton street. This is my connection to Jay Weaver. Walton street was the groundless seat. The ground lease had 77 years remaining. We bought it at what at the time seemed a reasonable, if quite low yield. In 2008, just before the market crash of the GFC, the groundless e Wall street, end up defaulting on his leasehold mortgage. But the bank that held the mortgage had to make the ground rent payments, otherwise they would lose everything. So throughout the worst period of the last 20 years, I guess, of market timing in the US, the GFC, the ground lessee, the ground payment was made every month, every quarter. And when I was concerned about how my client might look at this, since our timing was seemingly so bad, the partners, the family fathers, said, we don't care. We're getting our rent every month. And we didn't buy it for ourselves. We bought it for two generations removed, because in 70, now 75 years, 74 years, they're going to own half a city block on the Chicago River, Racquet drive, and they're going to have a 500 room hotel sitting on it, and they're not going to pay another penny to own that hotel. So to put it in sort of perspective, John, they bought the ground under a 500 room hotel in downtown Chicago, prime location with the equivalent of $75,000 a key at the peak of the market was worth four or 500,000. The key, even in the depth of the GFC was worth 200 250,000. They got the rent every time. And ultimately the family is going to own this fantastic piece of real estate two generations removed. [01:51:44] Speaker A: Probably be land by the time that happens. [01:51:46] Speaker C: It may land and they'd be perfectly happy if it's land because we're something. And John, this is one of those areas where you and I tried to do business together in DC. You might mention some of what we tried to do there, but we tried to do the same thing in DC. Unsuccessfully. Yeah. [01:52:00] Speaker A: Well, you know, this whole ground lease business has evolved and had, you know, it's always been around in major cities and DC had plenty of them, but it only really worked in major cities up until recently. There was a, you know, I will just cite the company that's kind of emerged and they're now, I think a public company. It's a derivation of I star. Right. [01:52:27] Speaker C: Which is a derivation of burry Stern looks business. Right. Right. [01:52:33] Speaker A: The name of the public entity, I don't remember. But Jay Sugarman runs the company and basically they acquire property through ground lease positions. [01:52:45] Speaker C: Exactly. [01:52:46] Speaker A: And they structure ground lease acquisitions under buildings and to own them. And I think it's called safe hold. And so that's. And that evolved just because of the struggles in the capital market to get traditional financing done and good locations where you're looking at long term land positions, combination of those. So in down markets like now, you might look at that as an option for a development deal where you can't get capitalization. So you might buy the ground and look at that. Or look at a ground investor to help you with a capital structure. [01:53:31] Speaker C: It's good advice, John. I would say the difference between this new generation and the old ground lease and the old ground lessors like my clients, my clients never expected to sell the building back to the tenant. The current structure you're referring to is really a financing structure. And built into the ground lease is the right to buy back the improvements, typically at a fixed price or on a formula basis, so that the developer knows he can ultimately get back to 100%. My clients never wanted to get in that position. They never wanted, they weren't financing, they were buying for future generations. And that would be the difference. And then motivation. Yeah, exactly. Completely different motivation. And then I will say that I did manage to close a second transaction for this family in Manhattan. A few years back, again, working with Steve Collins, who had identified the opportunity. [01:54:21] Speaker A: So the opportunity, and I looked at this ground lease that you, as you made, and I've said, you know, if they would be willing to allow redevelopment, you know, allow for flexible structure on financing, which I think they were willing to do as long as their position wasn't violated. I think that was the issue. And there was some language that I was recommending that you didn't think would sell too well. [01:54:48] Speaker B: But. [01:54:50] Speaker C: Yeah, we looked at two or three there in DC, and retrospect, I think they would all been deals that my client would have done well with. We looked at a deal in downtown Chicago, which was a development of a single tenant, retail, on a really interesting site in river north. And they passed on it because the credit of the retail tenant was not sufficient. And in fairness to them, the tenant went out in the collapse of COVID it was a restaurant went out, but they would have been just fine. They would have owned a great piece of real estate, but they would have had operational risk. Once that tenant went out and they wanted no operational risk, they were completely passive players and they wanted somebody else to have all those risks. Let me switch gears, John, to talk about another german relationship, which is different yet again from the others I've mentioned. Companies called Kubilis, c u b I l I s, which is specialist real estate investment management company based in Frankfurt, focused solely on the logistics sector, founded by three partners, one of whom was a longtime friend of mine from when he worked at Warburg bank in Hamburg, Klaus Hawkins. We'd stayed in touch since the early two thousands and he'd switched jobs a couple different times. We tried to find ways to do things, kind of like you and I. John tried to find things to do and we'd had no success at all, even when he formed tubilis. And even though there was all this appetite for logistics properties across Europe, including Internet, I had a trip scheduled over to Frankfurt in May of 2018, and we were trying to find a way for me to bring value add capital, probably from Canada, but maybe from the US into Germany, for his value add logistics strategies. His goal was to buy older logistics, re tenant, redevelop, do something to create value in these projects. And prior to my trip over in May of 2018, he sent me a list of like a dozen assets, properties that they'd identified as being interesting. And I was scheduled to land in Frankfurt on a public holiday. I rented a car at the airport and I went out looking at the properties on his list. So I'm driving around or getting within, lets call it an hour, hour and a half of center of Frankfurt. And I looked at all of these assets and I had different reactions. Some of them I couldnt figure out for the world what that submarket was. I wasnt relying on my knowledge of the market, I was relying on Klaus. But I wanted to be able to look at the asset and have a conversation. Were these older properties, Brad? They were all existing old properties where there was some opportunity as Klaus and his team figured some way to create value from that setting, whether excess land on the site, which is frequently the case, were a tenant that was likely to vacate at an old market rent, way below market rent. And therefore you could, if you took the risk, buy it vacant, rent it, sell it, turn around, sell right away at what were then very attractive cap rates for Germane. But again, we're back to solution. German institutions did not want value add. German institutions wanted boring, even in the logistics space, boring bond like deals. They would buy brand new ten or 15 year leases. They buy an older building with a brand new ten or 15 year lease, but they would not buy a building that had rollover risk. [01:58:27] Speaker A: Was Amazon evident then? [01:58:30] Speaker C: Oh yes, for sure. [01:58:31] Speaker A: And so market change in Germany, like it did in this country pretty dramatically when the Internet, you know, took over. [01:58:39] Speaker C: I mean, was it yes and no? Yes. And that they were buying Amazon leases, but no, because they only wanted to buy secure term. They were not interested in buying a site that might be an Amazon facility. They wanted to buy it when Amazon was in and signed a 15 year lease and they had Amazon credit for 15 years. So the opportunity that clause and his team saw was to be the intermediary. [01:59:06] Speaker B: Capital, to be the capital that would. [01:59:07] Speaker C: Say, we get that. This is clear, like buying an industrial building out by O'Hare airport. John, it was going to go vacant. You knew there would always be a tenant for it. But the institution didn't want to buy vacancy. The institution wanted to buy lease term. And so the goal of all these assets was to find something where you could step in and buy it at a discount, significant discount to the ultimate value that you would achieve when you released it and sold it onto an institution that wanted a brand new ten year lease or 15 years anyway. So we went and went look. I went and looked at all these assets and one of them struck me as particularly interesting. It was an older but functional warehouse building in the same town as the headquarters of the tenant. The tenant, well known to me, well known all across Germany, a private company and its lease had only two years left and they had two renewal options, but they didn't have to declare what they were going to do on the, on the renewal for another twelve to. I guess it was twelve months left before they only came on the market became available. And every look at it say, how. [02:00:24] Speaker B: Do I price it? [02:00:25] Speaker C: How do I know what to do? Because I don't know what the lease. What's going to happen to the lease? Well, in this uniquely brad world of relationships, I knew that the tenant was a private company owned by a prominent german family. I knew that the head of the real estate development company owned by that family was a Dutchman I'd known for more than 20 years. And I figured I'd call my friend and find out what he could tell me about attendance, intentions. So the next day Klaus and I meet. We go over the list. I say, here's the one I really like and here's why I like it. I'll make the call. So I call my friend. He said, brad, the way the family works, we can't be involved in that tenant's business because that's a separate entity from my company. But I do know the CFO of that tenant really well because we are all on the same plane planning committee. So let me introduce you to the CFO. So he sends a message introducing me to the CFO. The CFO is not in Germany. When I'm there in Frankfurt. I return home to North Carolina. That weekend we head to the beach house in Surf city and the CFO reaches out to me from his office in Germany. When I'm at our beach house in Surf City. He speaks perfect English. He's probably in his early forties. Perfect English. And he said, I see you're from living in North Carolina. Where are you? Whatever. And I said, well, actually today we have a beach house. I'm in Sur City, North Carolina, on top of that. And he said, oh, sur city, it's one of my favorite places. I have a friend who has a house there. I'd go there many times for vacation. It's a wonderful place. So immediately we have this rapport based on the fact that I've got a beach house where I used to go to beach houses. He said, you know what, Brad? I don't know exactly what we're going to do, but why don't I put you in touch with our facilities manager? Because he's the guy who's going to ultimately decide whether we stay or go. So the relationship leads to. Relationship leads to relationship facilities manager. And I introduce him to Klaus. Klaus's team in Frankfurt meets with the facilities manager. They start a dialogue about what's going to happen. We get a real sense of what their plans are, and we think, God, this is a transaction waiting to happen. And Claus says, yeah, Brad, it's great, except I need a capital partner to buy this asset to make this all happen. And that's where you come in, Brad. You're supposed to be providing me with access to capital. The deal is my deal. You've made it happen. But I need capital. So I put a call into one of my contacts in New York who happens to have an ownership position. His firm has an ownership position in a logistics platform in London, which we know is looking to expand its holdings in Germany. So my contact in New York calls his contact in London, who calls my contact in Frankfurt. And bottom line, end of the day, the London firm bought the building subject to the lease renewal, hired costs firm to renegotiate the lease, paid him a fee for sourcing the deal, paid him a fee for renegotiating lease. And, oh, by the way, Brad gets a fee for having helped put this whole thing together. But for me, again, to me, the best part of this was this incredible coincidence or confluence of ripples from multiple places in my career over a period of more than 20 years, and again, sort of a three sided transaction from that perspective. So it was just fun. But anyway, that's my last german story. John, we can move on. I know we got other things we got to cover. [02:03:57] Speaker A: Yeah. So let's talk about BMP Paribas real estate. And that's a french company, if I'm not mistaken. [02:04:05] Speaker C: So I guess I'll end the discussion of my clients, these fantastic clients I've had by what I can confidently call the most surprising, unique assignment I had in my 26 years at Miami partners. And probably the one that best captures just how unique my business model was, how, how it made sense to me, but virtually no one else. Yes, you're right. BP Paribas is a gigantic french bank, global bank out of Paris. BNP Paribas Real estate investment Management is the real estate investment management arm of that giant french bank. And the bottom line, I'll get to how it happened. The bottom line is the french investment manager hired me, a one person advisory firm working out of a home office in suburban Raleigh, North Carolina, to help them raise capital in Europe to invest in european real estate. [02:04:58] Speaker A: So that's a story in itself, right? [02:05:00] Speaker C: It is a story in itself. And the amazing thing about this, John, is I succeeded. We secured 100 million euro commitment from a dutch insurance company to serve as the Keystone investor in BNP Paribas European Impact Property Fund, which I'd helped them put together with the dutch investor over a period of years. And even the process of that was amazingly complicated. But it all happened because of me dropping pebbles in two different ponds, each more than 15 years earlier. So the dutch insurance company, that ripple started in 2000 to 2001, when I met a guy named Rodney Zimmerman, born in Indonesia, working in Utrecht, the Netherlands. At that time, he was running global real estate in a private markets group of the Dutch Doctors pension fund. This is one of these sector pension funds based in Utrecht. I called on Rodney with my principal guys, after my principal guys, every meeting we had, Rodney was super pleasant and always ask these fantastic questions, right? And got everything. And it's like. And then he would always say, but I can't do it. I'm too busy with other things. I like what you're doing, but it doesn't work for whatever reason. And he basically developed a reputation in the marketplace as the kind of guy who you like to meet, to say hi to. But if you were, if you had to pay your children's tuition or pay your rent based on what you made from them, you wouldn't spend time with Rodney anyway. Rodney moved to ASR, which was the successor dutch insurance company after the collapse of the GFC. And again with Rodney at ASR, I would see him in year trek, or I would see him at an industry event. I liked Rodney enormously. And so again, always pleasant, always great questions. And nowadays, sorry, saying, yeah, Brad, I understand all this, but I'm not allowed to invest outside the Netherlands. I got to buy real estate only in the Netherlands. So again, over 15 years or more, maybe now we're up to 20 years almost. I've met him multiple times at multiple jobs. And as they say, I didn't give up. But one of my closest dutch friends said, ron, I've just stopped calling on Ron because he's never going to do anything with me, me. And my basic premise was, I like Rodney. I like talking to Rodney. And as I said early in the podcast, I was quite willing, have always been quite willing, to build bridges to nowhere. Because sometimes, if not often, nowhere becomes somewhere. And that was the case with Rodney. My bridge to nowhere with Rodney became a bridge to somewhere with BNP. And so after all those meetings and all that disappointment of calling on Rodney, I finally found a client and a product which ticked all of Rodney's boxes. And he and my client, BNP Barabao, reach agreement. So now the rip on the other side, on the BNP side, it also started about 2000. It's when I first met Barbara Knoflak. Barbara was at that point the CEO of SCB Asset Management, which was the open end fund business of a swedish bank, Sebaste, which is operating in Germany. So she was running a german open end, a pan european, but started german open end fund to buy real estate in Germany, owned ultimately by the swedish bank, the parent company. It's going to sound like a broken record. And I can't tell you how many times I met with Barbara, met her watching at SEB, how many times we got close. Nothing happened. Again, I didn't care because Barbara was a fantastic person and I enjoyed my time with her. She ultimately became very active in a fire, became chairman of a fire. And even if we didn't do anything, she was somebody I enjoyed spending time with. So I would see Barbara maybe not every time I was in Frankfurt, but most times when I was in Frankfurt. And then in 2015, Barbara moved to BNP Perrybaugh Real Estate as the head of its global investment management business for real estate, deputy CEO of their whole real estate, and BNP Paribas Real estate investment management, which was really based in Paris. Barbara set up a satellite headquarters in Frankfurt because she said, I'm not moving to Paris. I'll run the investment management business, but I'm going to run it out of Frankfurt. She hired some people I knew. She built up a really good team of people. And in my first meeting with her in her office in Frankfurt, she said, Brad, we have tried forever to do business together. And what I'm telling you is that now we're going to do it. I control this business. I'm going to find a way for us to do business together. This is 2015. We talk about a whole range of things. In 2016. This is the first phase of this bizarre relationship. In 2016, BNP's italian subsidiary hired me to assist them in creating an investment vehicle that was to acquire obsolete office buildings in major cities in Italy that the parent bank currently owned but wasn't using anymore or was going to downsize out of. And these were buildings. We went through the whole list of their downsizing strategy. These were billings, which we believe could be converted into much needed residential properties in these markets. These were some spectacular assets. I mean, in retrospect, it was a fantastic strategy. We looked at unbelievable assets. If you look at this, they had a little palace in Venice on the Grand Canal. They had properties in Rome, they had an unbelievable property in Florence. They had a fantastic asset in Turin, and they had these incredible, if you think of wealth management banks in Greenwich, Connecticut, or Princeton, New Jersey, to have these really neat, specialized buildings because their wealthy clients come there instead of going to New York. They own those buildings in all of the wealthy markets around Milan, including markets whose names you would remember because they're the headquarters of major italian car manufacturers or clothing manufacturers. Anyway, we went and looked at these unbelievable buildings, and then in the midst of all this, the bank changed its strategy and decided they really weren't going to sell those buildings, they really weren't going to make this thing happen. But it was during this time before we abandoned, before the bank abandoned the strategy. I introduced Barbara to Rodney at the in Rev annual meeting in 2016. In Rev is sort of a fire in Europe. Private real estate investment, indirect real estate investment vehicles is what in Rev stands for. Anyway, so Barbara and Rodney were both going to be at the meeting in Vienna. So I introduced them because we had this strategy, and Rodney got very excited about the strategy. And then I introduced the strategy to some of my canadian friends, and they got excited about it. And then all of a sudden, we got the rug pulled out from under us when the bank said, we're not selling. I still think, by the way, somebody could go back and make that strategy work, because housing is in such a shortage in those great italian cities, and unlike the US, where converting office to residential is difficult because the floor plates, Europe for decades, forever, basically has had a mandate that every office interior has light and view access, so the floor plates tend to be much narrower so you could create the residential easily. And we looked at, we actually did some planning on some of these buildings, how we convert. And oh my God, it was fantastic. And I thought there was a natural buyer market in the US youd buy utilities, convert them as condo, and who wouldnt want to have a condo in this cool location in Venice or Rome or Florence or blah, blah blah, including other Europeans. Anyway, it didnt happen. But in 2018, with Barbara's continued support, their main investment arm in Europe, based in Luxembourg, that subsidiary hired me this time specifically for what I said before they hired me to raise capital from european investors to invest in european real estate again. Without a doubt, the strangest assignment, the most unique assignment I ever had, sitting in Kerry, North Carolina, raising money in Europe for a european investment strategy. [02:13:33] Speaker A: But you never had residence in Europe, did you? [02:13:36] Speaker C: No. At one point I was asked by a german client to be their registered tax advisor in the US. And one of my other friends said, you can't qualify, Brad, because you have to spend six months a year. You have to live in the US at least six months a year, and you're outside the US more than that. It wasn't true, but it was sort of an indication how much time I was normally spending a week, a month in Europe for the better part of 20 years anyway. So I finally get a client, BNP Paribas, that has a strategy which meets Rodneys requirements, which is hes going to invest outside of the Netherlands. He liked the idea of an impact investment strategy which is aligned nicely with the insurance company where he worked. And we were really all making good progress. And by mid June of 2018, we actually had a term sheet. We had an agreement between the bank and the insurance company. Here's how we're going to move forward. And then we ran into a series of obstacles. Barbara left BNP, as did a bunch of the other senior members of the team, all the people that I knew from before. The structure got complicated because now it's been taken over, the negotiations been taken over by the French because it's now running out of Paris. And we're in this process where we thought we were at that ten yard line and all of a sudden, and there's been a fumble and we're back at the 50 or something like that. And I remember one meeting, we're sitting around with the BNP team. This is the new BNP team. So Rodney and I are there, and these people from BNP, from France and from Luxembourg. And Rodney, in all seriousness, turns to the people at the table and said, like a light bulb went off in his head. He said, do you realize that Brad is the only person from BNP we still hear from the beginning? Everybody else from BNP is gone. And it was more than just sort of a comic relief. It was, hey, I'm still here, but I'm here because of Brad, not because of BNP. Now, again, the story has multiple levels. Barbara was replaced by Natalie Charles, a french woman I had never met. And I concerned. I'm sitting, I'm working out of the Frankfurt, with the Frankfurt team. Natalie is based in Paris. She's french. She'd come from Axa. She's incredibly competent, wonderful talent with a great background. But I never met her. I'm figuring, okay, I walk in, she walks into B and P, and she's, who is this american we're paying to help us raise money in Europe for Europe? And why do we have this guy? And I don't need this guy. Let's terminate his agreement, which is always terminable on 30 days notice. I'm figuring I'm gone. I'm a goner. I'm not going to be around. But again, my ripple effect continues to come into play because strangely enough, my good friend Eric Sonden, he of Sipa, he of Paris, he of the finnish woman, he of USAA, he of whatever, turns out that he and Natalie, our close friend. So when I tell Eric this woman has taken over Natalie. Oh, I know Natalie. Let me call Natalie. So he reaches out to Natalie, says, I've known Brad since 1989. He's done this and he's done this. He's done this. He's a great guy. You're going to love him. You're going to want to work with him. So I meet madly for the first time. He said, well, I guess we know some people, the same people. And I'm told by our friend Eric that you and I need to talk. So we ended up having a fantastic relationship. She couldn't have been more supportive. Everything I wanted to do, she did. Anyway, so this is now we've been through the changeover and then Covid hits and, like, what else can happen to keep this deal from happening? But literally, Covid may have been the best thing that happened to it because Covid made both sides realize how important impact investing was and they had spent all this time getting. Now we're back from the ten to the 50. We're back from the 50 to the 20. We're making progress, but we're still short. And Covid intervenes and then we find a way to get it over the goal line. And on the 19 November 2020, the two sides signed the documents to create this impact fund with 100 million euro investment from ASR and sort of an indication of the relationship I had with Rodney. Rodney reached out to me on the 19th and he said, brad, I really want to apologize that it took us so long to get this done because I wanted to finish it two weeks earlier because I know it was your birthday on the fifth and I tried desperately to get it signed by the fifth for your birthday present, but we missed by two weeks. I hope you don't mind. So I respond to Rodney with a message, if you don't mind, John. I'm going to read the message because it's. It's all about sort of what I've been doing, what I was doing for 50 years. A note addressed to Rodney's and reminisce. For you and me, this journey did not start with my introduction of you to BNP at the in rev annual meeting in Vienna in 2016, or the meeting you and I had with Barbara at Pravada, the dutch real estate conference in 2017. It started back many years before, when you were at the doctor's fund and I would visit you in your offices there. Over these many years, we've built a relationship based on mutual trust and respect and friendship. While I am very pleased with the fact that ASR and BNP have taken this important step, I take greater pleasure out of knowing that the relationship which you and I built over time got us to where we are today. Thank you for your friendship. That was the essence of what I was all about for 50 years. And then the post note incredibly sad. Rodney died of a heart attack just four months later, two weeks after his 50th birthday. We'd spent 20 years building this relationship and finally managed to do something, and four months later he was dead. But part of that story, John, is I built a relationship with the analyst who worked on that transaction, Gideon. And I think you've got a message from Gideon, Gideon as well, about the relationship that I had built with Rodney and with Gideon. [02:19:48] Speaker A: So that ends episode two of three with Brad Olson. Following up what Brad had to say about his young analyst, Gideon, here is what he said about Brad I had just started my career, and up until that point, I had never meth an experienced and older man in the industry that showed genuine interest in a young buck. I think the biggest lesson I learned from Brad would be summarized as business is business. But you should never forget that business is conducted with people. If you genuinely invest in people, business will always be conducted in a good manner. When business is conducted in a good manner, you can can maybe even gain a genuine friendship in a somewhat cold industry. A genuine friendship can open a door to many more opportunities in life, and not just business per se. We hear a lot more about Brad's contribution to the next generations of real estate professionals and his mentorships in the next third and final episode of the podcast, along with some of the affiliations and activities which were an integral part of how he became a true icon in global real estate. Thank you for listening.