REDMF

Business owner

[REDMF @caisson68]

My RE developer rules:

1. You don’t need to make all your $ on one deal

2. Maximize your “at bats” b/c:

3. Some deals will pleasantly or painfully surprise you.

4. Lots of guys miss big profits due to lack of staying power

1/2

[REDMF @caisson68]

My most recent McDonald’s visit was a depressing and soulless experience…Chik Fil A (where our teenage son works!) is the exact opposite.

[Jonathan Maze @jonathanmaze]

Why do brands like Chick-fil-A, Culver's, In-N-Out, Raising Cane's, etc. outperform the big, publicly traded companies?

John Weiss, senior advisor with the investment banking firm Harrison Co., noted a few reasons at the Restaurant Finance conference:

They "manage for the next generation, not the next quarter" and "focus on the lifetime value of a customer" and don't spend too much effort on operationally complex limited-time offers. They take care of employees who do a better job in the restaurants, giving customers a better experience that drives sales over the long term.

The large public companies "focus on cutting costs to improve margins" and have high turnover. Their operations suffer, customers have a bad experience, and sales and margins decline.

The private companies have long-tenured CEOs, which leads to consistency in operations. Public company CEO turnover "is more of a problem than hourly turnover."

Wendy's has had four CEOs in three years.

The private brands don't use kiosks and focus on hospitality. Public company franchises use kiosks aggressively. (I'll also add that some of the big public companies, notably McDonald's and Taco Bell, are aggressively going after drive-thru AI).

"At McDonald's, it seems as if they've almost abandoned cashiers. You're forced to use the kiosks. Those kiosks don't smile."

Some of the private companies also don't do delivery, notably In-N-Out. Raising Cane's also doesn't have formal arrangements with delivery providers.

While delivery provides incremental sales, "some of those public companies that have sold their souls to and outsourced their business models for third-party delivery companies are learning to regret it. Wingstop may be an example. Those third-party delivery companies really don't care about your brand image."

I agree with a lot of this. I do believe that brands have made a deal with the devil on third-party delivery, especially for franchisees. And by the end of next year almost none of your McDonald's orders will be taken by a person, given that the company plans to implement drive-thru AI.

Those fast-growth chains don't make these types of compromises. You have a better experience when you visit them, and so they're worth the money you spend. So they're thriving.

[REDMF @caisson68]

“The still small-headed Barry Bonds”…my god that’s beautiful, truly an all-timer of a description by @Dejan_Kovacevic 😂

[Dejan Kovacevic @Dejan_Kovacevic]

My 21 TAKES, a weekly bulleted column, bemoans a really bad decade for Pittsburgh's three big-league teams ... plus a bunch of thoughts on #Steelers #Penguins and more

► READ FOR FREE: https://t.co/JUr3ZGFR0m

#DKPS #HereWeGo #LetsGoPens

[REDMF @caisson68]

Hot: Senior housing (the demographics over the next 10-15 yrs are astonishing)

[Amanda Orson @amandaorson]

Real estate hot or not

Hot:
- Cash-flow and DSCR-focused deals over pure appreciation
- Affordable Midwest and similar markets where entry prices are lower
- Taking advantage of large institutions stepping back from existing homes
- Single-family rentals that are affordable / cash-flow positive
- Smaller-scale build-to-rent or scattered-site rentals
- Value buys with negotiation room in softer markets

Not:
- Aggressive house flipping or rapid appreciation plays (rates >7% kill the math)
- Competing in the mass single-family buying spree of 2020–2021 (institutions have largely pulled back)
- Broad multifamily value-add in formerly hot Sun Belt markets with recent oversupply
- Office or legacy retail
- High-volume, all-cash institutional-style portfolios
- Assuming prices will keep ripping like the pandemic boom

Basically the COVID era “buy anything and ride the appreciation wave” has fully shifted to “find cash-flowing single-family rentals / be selective.”

What have I missed?

[REDMF @caisson68]

Sitting in a nice airport bar and people watching is now a better experience than the airline “Lounge.”

[Stephen Stone - PhD Tricknologist @Stephen19718352]

Airline lounges need to raise the visit fee to $200. They need to make the credit card annual fee $5,000. It’s getting to the point where the true lounge caste is eating in the concourse while the untouchables are packed into the lounges like sardines. Completely unnatural

[Rocky Mountain High @subsix848]

“The largest polling error in 50 years is about to happen.”

I mean, I HOPE this is the case but the problem is, the people pushing this idea aren’t objective (at all) and don’t have a track record of accuracy, either!

[REDMF @caisson68]

🎯 Right now I (GP) have a chance to roll my interest in a deal we developed into the new ownership entity when we sell, and I’m probably not going to do it bc I don’t want to have my hard-earned profits tied up for 7-10 years and UNDER THE CONTROL of a large institutional owner.

[Leyla @LeylaKuni]

This 100%

[REDMF @caisson68]

@CourtneyLC80 Perhaps travel buddy is a bit extreme; more so that they seem to want a “companion” more than someone they can build a full life together with.

[Rocky Mountain High @subsix848]

The irony of Dems wanting to destroy Elon Musk when they’re supported financially and logistically by George Soros, who’s the closest thing to Satan on Earth.

[REDMF @caisson68]

@newstart_2024 @megynkelly @MegynKellyShow When we got divorced my ex and I agreed we’d do everything possible to stay not just friendly but also engaged with each other, for the kids’ sake.

Giving your children a sense of stability is the LEAST you can do.

[Rocky Mountain High @subsix848]

Having grown up in the grey Midwest and then lived in NYC before moving to Denver 25 years ago - you can’t overestimate what 300 days of sunshine plus amazing mountain winters does for your overall mindset…

[REDMF @caisson68]

I think the answer to this question on replacement cost depends on how long your hold period/investment horizon is.

If you plan to hold for decades, in a market with strong fundamentals and growth prospects, then yes, it matters.

[Moses Kagan @moseskagan]

Question nearly everyone in the RE business is wrestling with right now:

Can you justify buying a good building at materially below replacement cost, if the going-in yield is not great (relative to prevailing interest rates) and there is not much current upside in the rents?

(If your answer is "yes", you are implicitly betting on rents rising faster than inflation, interest rates falling or cap rates falling.)

[Rocky Mountain High @subsix848]

Sometimes, civilizations die.

[REDMF @caisson68]

We’ve been developing for 20+ years and I can tell you this is NOT true.

[yc @yc989]

There is no alpha in real estate outside of development.

None. It is a levered bet on interest rates.

[Rocky Mountain High @subsix848]

The entire pit bull breed should be euthanized as soon as possible.

[REDMF @caisson68]

@jmaxmann Building is in rough shape inside…

[REDMF @caisson68]

Eh…we toured this building recently…the new owner will have to spend $ millions in upgrades/TI/carrying costs before the space is rentable…these deals are rarely what they seem on the surface (but I genuinely hope they succeed, downtown Denver needs it!)

[Triple Net Investor @TripleNetInvest]

JUST IN: A 95k sq ft office building in the heart of DT Denver is set to sell for $2.7M - an INSANE $28 per sq ft

It last sold for $24.5M in 2018 - a staggering ~90% discount in 8 yrs

Here's the crazy part:

The building underwent major upgrades recently, w/ 5 of its 7 office floors already built out and move in ready

And the property sits directly on Denver's iconic 16th Street corridor, which just underwent a $175M renovation

Denver's office market is truly experiencing an apocalypse

Stay tuned and follow for more updates on the office market meltdown

[REDMF @caisson68]

@antonia_mdprjct This is a REALLY good write up!

[Antonia @antonia_mdprjct]

This one is long overdue.

We've had this conversation multiple times through the years, so here it is memorialized for anyone who may benefit.

It's also a great glimpse into how we negotiate construction agreements.

The tl;dr is, if you have a completion guarantee, signing a GMP before you've substantially bought out hurts the project more than it helps.

[REDMF @caisson68]

@antonia_mdprjct In the real estate development business, a Guaranteed Maximum Price contract does NOT actually guarantee a maximum price (ask me how I know!)