The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful:
Learning from an expert in commercial real estate investment, particularly in the retail sector, is one of the basics in building a strong foundation in this space. Today we talk with S.L. Van Der Zanden of CapRock Real Estate, and he answers some most frequently asked questions about investing in the retail commercial space.
Richard Wilson: Hello, everyone, this is Richard C. Wilson From CommercialRealEstate.com, I’ve got here one of our CRE Power Players, S.L. Van Der Zaden, from CapRock Real Estate. Welcome S.L.
S.L. Van Der Zanden: Hey, Richard, good to see you.
Richard: Yeah, appreciate you being here again with us. So today we’re going to go through about 20 different frequently asked questions we get on retail investment real estate, special servicers, commercial real estate industry and brokerage space, all areas that you know very well. Before we jump right into the questions, can you just remind people a little bit about who CapRock is so they can listen to these answers with that perspective and context.
S.L.: Ok. So 12 years ago CapRock was formed in the depths of the great recession to focus on distressed real estate opportunities. Over that time we’ve serviced over 5 million square feet of commercial space, of which 60% was retail and the other 40% was office and industrial. We’ve developed an expertise in retail over the last dozen years because that’s just the way things played out.
Richard: Right, right, okay, great. I’ve enjoyed getting to know you and appreciate you being a part of the CommercialRealEstate.com platform. So, let’s jump right into this. So, how do you value retail commercial property? A lot of investors who may be listening to this might be familiar with valuing multi-family properties, for example, but have never looked at investing in retail before. How do you value those types of properties typically?
S.L.: The simple answer is, like most commercial real estate, we look at the cap rate, and we also look at the cost per square foot. Number one is the cap rate, which is basically the reverse of the P ratio because you’re dividing the earnings by the price. That’s where most people hang their hat. The price per square foot then you want to look at as it relates to your replacement cost – what is it going to cost to repair the building and re-tenant it? It’s not just the physical cost but it’s getting the tenants, it’s paying for the TEI and the commissions, and getting it leased up, which takes a period of time. So you don’t want to get really out of whack. When you’re dealing with triple A properties, they sell for numbers that are way beyond replacement costs, but you have to trust that the location is strong enough that you’re always going to be able to have replacement tenants that pay those kinds of rents. Those are the two main ways of looking at valuation for retail.
Richard: Okay, great. What would be the typical cap rates you see on a lot of retail properties? With multi-family in valued areas, you can pay 2 to 3% cap rates, and lots of times they’re trading at 3 to 5% cap rates. With retail, what kind of ballpark numbers are you talking about?
S.L.: So, there’s different types of retail, so the most expensive are the single tenant net lease buildings, like a McDonalds or whatever. They’re generally super high credit, they’re long term leases, and they’re basically an enhanced bond. So, those can go even in the low 4 K-ups. But typically it’s more like 5, max 6, cap rates for a good quality single tenant. Once you get to my world, the multi-tenant world, a triple A property, the lowest it would trade for would be a 5-k up. And it would probably trade in the 5 to 6. A more straight forward A property would be 5 to 6%, a B property 7 to 8 to maybe 9, a C property for sure is 9% cap or higher. Like a dog retail mall might be selling at a 12 or a 15 cap rate.
Richard: Sure, okay. What are some best practices for investing in retail commercial real estate?
S.L.: So, there’s a lot of them! Due diligence you just can’t do enough of. I mean, it’s hard work, so it’s easy to slough off on it – where you talk to a few people, and they tell you a great story, and you just want to believe it, but you really have to do your own analysis on both financially and with the market. The demographics of that area, who’s in that market and who isn’t, that’s called a void analysis, to figure out where a market may have too much automotive supplies, and not enough computer vendors or whatever. It’s important to look at that relative to the property tenant base you’re buying, not that they can’t be replaced, but it’s a good clue on how your tenants are going to fare in the market from a financial perspective.
In retail, basically they have a list of fundamentals. There’s what we call VPD, or vehicles per day how many cars pass in front of the property, access, can you get into it from both directions or is there a median in the road, visibility, is it on a hard corner, which is great, but more expensive. Other issues could be if there’s trees or landscaping along the frontage, which a lot of municipalities like to do to make things green, but, meanwhile, the tenant is behind them, no one knows they’re there, and they’re suffering – don’t pay a lot of sales tax that way!
Lastly, out lots can stand in the way, too. It’s a balancing act to put out lots there because they draw customers in, but you still need the visibility to the tenants in the strip center. What else? Assume you’re not buying this direct and you’re working with the sponsor, you want to make sure that the offering memorandum is thorough, hasn’t deliberately left things out, and check it out – make sure it makes sense. If you follow those things, you’re going to be in great shape. Lastly I would say is if you’re doing this and you’re not a pro already, you need a partner. Whether that’s a mentor, or a partner-partner, or a sponsor, someone who has a track record, and who has history that you can rely on. Otherwise, you’re shooting in the dark.
Richard: Right, right. What about for someone, whether you’re the investor in a commercial retail property, or you’re looking to lease one, what are some of the major components that are unique to retail commercial real estate leases? Compared to other types of leases that maybe the investors have seen before.
S.L.: So we’re talking about the lease?
S.L: Okay, so all leases identify the premises, and the size, and the rent, and whether it’s net or gross, things like that. Where retail leases get complicated is what’s considered a common area expense. In a center with 15 tenants, you could have 12 different definitions of common area expenses that are covered, and they end up calling them “pools”. That’s one of the most complex things about retail versus other property types. Tenants, especially big tenants, have gotten very good at carving up, when normally everybody would say “It’s an operating expense, of course it’s a pass through.” and they’ll either eliminate it from the list or cap it. So it’s there, but now you can’t charge the full amount. So, just figuring it all out, it’s a level of complexity that’s very annoying in the industry.
Richard: Right, right, yeah. We were surprised when we rented retail space to operate our office out of before; just little things like the air conditioning unit for our space was owned by the building, maintained by someone else, so when we moved in, we were responsible for maintaining this air conditioning unit out of our pocket, even though it hadn’t been maintained well by the previous person. Little nuances like that, that you might not have to face within a certain type of net lease or an office lease, it’s interesting for us to discuss.
S.L.: In retail, it’s sort of the wild wild west when it comes to HVAC.
Richard: Right, right, okay. What are some negotiation tips for those looking to secure commercial retail space for lease?
S.L.: Number one – I recommend getting a tenant rent broker, getting a broker to represent you. Trying to be an expert at something like this on your own, there’s no upside. The owner of the property is going to recompensate your broker, so you’re not even coming out of pocket for it. They’re then going to be able to give you lease comps on what rates are being paid by similar uses in the general area, they’re going to be able to help you to assess the condition of the space, and how to get what you want out of it. Before the lease gets signed, figuring out what’s lacking and getting, hopefully, the landlord to pay for that. Whether that’s a cash or abatement of rent that compensates you for paying for things, that’s part of the negotiation. Again, the broker will know how to handle that, and will be the best person to handle that part of it.
Richard: How long is the typical commercial property retail lease for?
S.L.: Well, it’s anywhere between 3 and 10 years. Most of them are – 5 is probably 40% of them, 40% of them are 5 year. There are reasons to do shorter leases like a 3 year lease, and there’s reasons to do a 7 that’s not quite a 10. A 10 is probably a high credit, national credit, tenant that has been in business a long time, knows they’re going to be in business a long time, and has learned that agreeing to rates today are almost always below market by the time 10 years turns around. So they save money, rather than doing shorter leases that get readjusted to market every 3 years or whatever. So if you have to just proform with something, you could use 5 years.
Richard: Right, okay. During the pandemic and Covid, what type of a discount are retail commercial real estate spaces leasing for, or selling for? We’ve had several questions around this coming in to us directly, and I’m just curious what you’re seeing as kind of an expert in this marketplace. If someone’s looking to sign a lease, or buy something now, is it 5%, 10% discounted? Is it much greater? What’s kind of like the fairway of the discount people are applying?
S.L.: The leasing that my team is doing, we haven’t seen – it’s no more than 10% for sure. It’s more closer to 5% I would say at this point. It’s just they’re pickier about the space, and they don’t feel as pressured to make a decision because there’s fewer people out there. I think there will be more sizable discounts coming up as this plays out, but at this point people are still shell-shocked. There’s so much uncertainty that people don’t know how to price it, and so really on the leasing front from the people that are out there are smart companies that want to get more space and they want to get the best space available. So they’re out nailing them down at a time when landlords are pretty flexible.
Richard: I see. So it might be less about what exact percentage might be binary, like the best spaces are getting a lot, and other spaces are getting no viewings at all because…
S.L: You have an empty drive-through space, Starbucks is knocking on your door, you know? It’s that kind of situation.
Richard: Right, right. Okay. How is commercial retail property financing typically handled? Multi-family, there’s a lot of agency financing, some local banks. For retail spaces financing, is a lot of that done through local regional banks? Or how is a lot of this property getting financed?
S.L.: Surprisingly, maybe, to a lot of people a lot of banks, I’d say most banks, aren’t very good at doing commercial loans for real estate. Just the way banks are set up and how the money works, they’re way better at doing short term loans than long-term loans. And that’s why we have things like CMBS, collateralized mortgage backed securities, where it’s really more of a bond and it ties to the treasury rates and it makes sense that way. A lot of the lending comes from life insurance companies. They have piles of money that they have to keep invested for their policyholders, and they sort of sit in the middle – they could do a 5 or a 10 year loan, mostly 10 year loans, where a bank is only comfortable in a 3 to 5 year zone maybe. The CMBS will do up to 20 years, but the problem with CMBS is there’s no one there on the other side of the table when you have problems. Banks are great for bridge financing short term stuff, lower interest rates if you’re immune to the recourse issues, but if you want non-recourse, a lot of it is being done by life companies.
Richard: Okay. How can somebody derisk a commercial retail property while they’re looking to invest in one? Like, when you look at investments in this space, you talked earlier in this interview series about conducting thorough due diligence, so I’m sure part of derisking is part of that due diligence process, but how else do you look to derisk your investment dollars going to work?
S.L.: Definitely be thorough on the due diligence, find someone you can partner with or mentor. That experience and wisdom you get from doing this just accumulates every day is hard to get out of a book. Although an idea of a book I highly recommend, by Peter Lineman out of Wharton called Real Estate Finance and Opportunities or something, you can’t miss it; it’s one of the most popular text books. If you read that and understand that you really have a lot of the fundamentals down. So it’s accepting that’s complicated, there’s never a clear cut answer, it’s a judgement call at the end of the day.
Richard: Right. In terms of conversion, I’ve seen retail spaces being converted into other uses that might be like a “best use” of that retail space, even though the initial intended use was retail. What are you seeing as kind of the most popular, or the biggest trending, repurposing of retail commercial properties right now? Through your own clientele, or from your own investment ideas.
S.L.: So, if it’s a big box that’s been vacant that they can buy for pennies on the dollar, self-storage is a very popular reuse. Self-storage, it’s expensive to convert the building to it, but once you’re there, the dollars per square foot that people will pay in rent, they put stuff in there and they forget about it and they rent for 20 years, you know? They pay ten times the value of what they put in storage. That’s a popular re-use. The next would be churches and schools, they can take up a lot of space, they’re not top of the market rent payers – none of these uses pay as much rent as retail, but you’re talking about a property that’s already expired from a retail perspective. And then entertainment kinds of things, like paintball, and trampolines, and gyms and stuff like that that are experiential. Again, they need a lot of space, so you’re not necessarily going to get a ton per foot, but it will use the space and fill it up with people.
Richard: Sure, sure. By chance, I have a client working on a repurposing of a K-Mart into a warehousing facility because of the boom in distribution.
S.L.: Oh, sure.
Richard: Is that really not common? Because you really need a big box, you need kind of like a Best Buy sized, or Target sized, place to go out of business that’s a little bit more rare to see it used as industrial. Just because industrial seems to be kind of a hot area right now. So, I’m just curious how often you see that coming up.
S.L.: Yeah, I think why you don’t see more of it is more fundamental. The truck traffic part of it, the big trucks that are used and the quantity in and out, isn’t very compatible unless let’s say it’s a stand-alone Wal Mart. They didn’t have a strip shopping center around it, which is probably impossible. Just the intermixing of the two uses I think it’s difficult.
Richard: Right, right. That makes sense. Have you in your practice helped clients repurpose retail spaces into office use, or self-storage use, and helped a client go through some of those steps? Or is it really not super common that people are doing that because of the economic construction needed?
S.L.: Yeah, it’s not super common. We sold an old Giant Way grocery store to a self-storage guy, and we’ve definitely converted retail spaces into offices. Medical office, a lot of the medical profession is moving, independent guys are moving to retail spaces. That’s where you get a 10 year lease, because the quantity of plumbing that goes into it, a dentists’ office or whatever, it’s insane. They’re there for life, that’s the good news, and they’re generally good for it until they retire, and then hopefully they sell it to a successful young aspiring dentist.
Richard: Right, right. Great, okay. What is a special servicer?
S.L.: Okay, this I can talk about for a while, so cut me off if I go too far, because this is something that most people don’t know. So, let’s start at the beginning – this collateralized mortgage backed securities, which are mortgage loans made to real estate but are funded from a pool of investors. So you have a pool of investors that don’t know each other, they’re passive, and you have this mortgage honored piece of real estate that’s obviously active. So, while a loan is being paid promptly and nothing is going on, they call that the servicer, like a Wells Fargo collects the mortgage payments and cashes it, and applies it, and sends checks to people in the bond pool everybody’s happy. But when things go sideways – and anything could be, whether it’s a borrower issue or the tenancy has dropped below a certain level and there’s different triggers that will cause the file to move to the special servicer – and they’re basically God. They’re like an owner of the real estate, via the loan, and it’s going to be foreclosed or there’s going to be a workout, or it’s going to be recapitalized, all those decisions are made by the special servicer.
Richard: Hmm, okay. And I saw a headline in the Wall Street Journal yesterday from either the Simon Mall Group or Starwood who lost $1.8 billion…
S.L.: It was Starwood.
Richard: It was Starwood. Of a mall, and apparently they broke some covenant or debt level or some performance level, they lost control of the asset. Is that an example of it going to a special servicer?
S.L.: That’s exactly what we’re talking about, yeah.
Richard: You would think, this giant firm would say “Well, let’s just put dollars from this account to this account. Let’s do this or that so we don’t lose a $1.8 billion asset.” Is it just they didn’t have the balance sheet to do that, so they gave one up to the wolves and they’re going to secure the rest? Or how does that even happen?
S.L.: That’s my guess. Had it been doable, they would’ve done it. So, they must’ve been painted into the corner where they just weren’t able to play that card.
Richard. Right, right. Interesting, ok. How can investors, commercial real estate professionals, work with special servicers or source deals from a special servicer to access a distressed investment opportunity?
S.L.: Personally, because our firm does foreclosure receivership work, we’re talking to the asset managers on a regular basis. There’s times that a loan comes in to them that’s troubled, they haven’t made a decision what to do with it and we see opportunity there and we say “Hey, if we bring a buyer, would you sell it?” and the rule for them is it has to sell for more than the appraised value for them not to go to market and market it widely. Most of the special servicers now have their own sales platform or they share ownership with other special servicers, they’re typically fairly auction-y and they have a mixed record with buyers. There’s always tales of bidders being manipulated into bidding higher than they wanted to. Definitely, you hang around the hoop, things come through and just remember just because it’s distressed doesn’t mean it’s a good deal. There’s a lot of distressed real estate.
Richard: Interesting that if you compare that to single family residential – people see a home under foreclosure or bank owned, they have to be very patient, they have to pay full cash for that asset, you don’t know if you’re going to get it for 6 to 9 months. I thought maybe with special servicers “Oh, there’s paper on the property for $1.4 million, the property is worth $2 million, the bank is not getting paid, I thought perhaps in some cases you could buy it for what the bank has the paper on it to relieve the bank of that being on their balance sheet. Can you comment on those two perspectives of someone who’s kind of ignorant of special servicers on some level? Is it a “You have to pay all cash, and wait 6 to 9 months to even know if you’re getting the thing or not? And can you ever buy it just for the paper the bank has on it in some cases?
S.L.: Well, I think with a single family home, you’re talking about homestead rights. You know, the right to redeem the six month period, where the title isn’t yours until that’s expired. With special servicers, they can sell the paper, but you want the real estate, and to do that you have to successfully foreclose on the property. Which takes, again, your 6 to 9 months or more. So, the hard part about buying notes is if you pay full price, and it’s 80% of what the property is worth or whatever, that’s great – but if the buyer redeems, they pay off the note, you’ve made nothing, right? And you’ve probably expended legal bills. A smart buyer wants to buy that note at a discount. The note holder has to be stressed enough to be willing to sell it at a discount, that’s why it doesn’t happen more often. Usually what happens is these funds with billions of dollars buy out a whole portfolio, there’s performing loans, there’s non-performing loans, and then they sort of separate into stacks and work it. They have the teams to do it, and you work through it. It’s not a lot of fun, but it is profitable.
Richard: Right. How can, besides going through a special servicer – people talk about “off market real estate”, I mean it’s kind of not even a term people like to use the last 10 years because it’s gets used so often. People will say “Oh, this is off-market” and they’ll e-mail 400 people saying it’s off-market..
Richard: You know, well now it’s on market because you’re telling people about it on some level. So, in your experience, what are some legitimate ways to source distressed or off-market properties that an investor or investment firm could learn about by listening to this interview?
S.L.: Sourcing off-market is something we do, our investment sales group, because we’re a small company, really can’t compete head to head with a CBRE or the other guys. They have fabulous marketing materials, and great stories, so what we do is we use a service that provides sales data on transactions, and we separate out the ones that have ownership information and it isn’t currently listed on the market. We’ll call them to see if they have an interest in selling, and it’s a lot of calls to get to a yes, but it happens. And then you’re very careful about showing, not one by one but very few people, to keep that aura of being off-market. And people love to buy when they’re not competing directly with someone. Even though they might pay the same or more, it’s a feeling that you’re not being pressured that people like.
Richard: Otherwise might be jerked around, and lose it by a dollar, or some escalation clause…
S.L.: Right, right.
Richard: Makes sense. So, as an investment firm, what do you look for in a commercial property broker? I’d like you to answer this from a couple perspectives. One, you have your own real estate firm. You might hire brokers, so you might look for something in a broker to hire them to your team and join your platform. But, being as experienced as you are, if you sold CapRock tomorrow, and you needed to go out and hire a broker, what also would you look for in a broker to actually represent you in your interests? If you could kind of answer it from both perspectives.
S.L.: In no particular order, for me the broker has to be very professional. They have to have great communication skills, they have to have a track record that they can prove they sold the kind of property that I’m trying to sell, in this case retail. They hopefully have a book already of clients, so they can say “Hey, this would be a good property for these 12 guys in my group.” Shorten that process because once you go to market, the longer it’s on the market, it gets stale, it gets hair on it, whatever term you want to use. That starts hurting the perceived value of the property because people are hurt focused, and if somebody else doesn’t like it there must be something wrong with it, right? I mean that’s where you get opportunities. You want someone that’s on the ball, and it isn’t their first time to the rodeo.
Now, as far as hiring goes, I hire guys coming out with real estate degrees, typically masters from DePaul and we sign them out, they get their brokers’ license and they start working. We’re organic, we train people our way and we found that that works the best.
Richard: Okay, great. Thanks for sharing that, that’s helpful to know. What does it take to be a successful commercial real estate broker of distressed properties? It seems like from your answer earlier in this interview that it takes hitting the phones, it takes a lot of reaching out, it takes uncovering opportunities that aren’t listed, obviously, on places by very definition of off-market. It must take a lot of tenacity, so what else is not obvious about that? Is there a negotiation approach? Do you have to show up in person to actually get the contract? Or is it all a big number game to make it all work?
S.L.: I would say the most successful broker for distressed properties is going to be someone with a background or a really good understanding of the issues. Why and how is this distressed, and what does that mean to the value. So they can convince the seller of the rationale behind the pricing, and then they can convince the buyer the same way. So it has to be more than words, they have to have some real understanding of what they’re selling because it’s easy enough to have someone drive up and look at an office suite that’s beautiful and done and say “Yeah, I’ll pay $35 a foot for it.” But a distressed thing takes more hand holding and more time to figure it out.
Richard: Right, right. And what do all of the top grossing, most high volume, most productive, commercial real estate brokers all do and all have in common that, you’re probably training those new people that you hire to be like those people, what could you point out that would really help a CRE broker who’s really looking to be a top performer willing to put in the time, the effort, and the education to do so?
S.L.: Well, personality trait would be tenacious and persuasive, but what the most successful guys do is build a team. It’s so much more powerful than doing your own thing, and so that means you’re going to have people doing analytical work, you’ll have people doing marketing work, marketing materials, gathering data, and maybe some of the better ones are actually doing some showings and stuff, too. That broker, the top broker, has so much more time to spend on selling because all of this other stuff is taking care of itself while you’re doing that. It’s amazing the numbers people can generate that are good at it and that have a good team.
Richard: Right, so if I’m reading into that as someone more junior, I’m going to say “Well, I need to join a strong team, see how a team operates, learn from that, be mentored as part of a dynamic team”. But then long-term my goal should be to have my own team so that I’m only doing the part which I’m best at, or which makes the most money, or that closes the big clients, etcetera, right?
S.L.: Yeah, right. The real attraction to that is that you’re learning from one of the best people out there. And he has to share his knowledge because he benefits by the team being stronger.
S.L.: Yeah, that’s a real sweet spot for people that are on the ladder still reaching for that level.
Richard: Right. If somebody wants to start their career in commercial real estate, and they just take the very first step or two, besides going to the CapRocks website there in the Midwest, and going to apply to work for you, what else could they do as a very first step or two to break into the industry?
S.L.: Everyone that comes in here gets Peter Lineman’s book, I don’t know if they all read it, but it really gives you a baseline. The day you think you’re interested in becoming a broker you should sign up for and start taking the classes to pass the state exam. Because the shorter time, when you find an employer, the less time that’s spent passing the exam the sooner you can get to work. Showing up with the licenses is the entry point. I would recommend finding an opening at a firm, a larger firm, that has established procedures and training. That invests in their people. There’s some that will give you a phone and tell you to pound the pavement, all that stuff. The good firms really train their people well. Even if you’re only there a couple of years, it’s knowledge that you’ll have for the rest of your life.
Richard: Right, right. What are typical commercial real estate brokerage fees? What are people getting charged if the deal is done by one broker from buyer and seller, versus a shared fee, what’s kind of the ballpark range?
S.L.: It’s pretty common just to deal with a co-op broker if there’s two brokers involved, you take the fee that had the listing broker done the deal without a broker on the other side, it would be let’s say 4%. And if there’s two brokers, you gross it up by 50%, so now it’s 6%, and then you split that 6% in two, and each guy gets 3. Listing broker has an incentive to deals without the co-oping broker because he makes 4% instead of 3%, so there’s always that incentive that aligns with the interest of the seller or the landlord.
So, say it’s under $1 million, it’s 5-6%. Say from 1 million to 5 million, it’s 4 to 5%. And then 5 million to, say, 20 million, it’d be 3-4%. Then up to 100 million it’s going to be 2 to 3, and then above 100 million it’s going to be 1 at most 2. If it’s complex asset, that could make it be a 2 instead of a 1, it’s a pretty straight forward transaction, you’re just not going to make that extra percent.
Richard: Right, right. Yeah, makes sense. What is the best way for a passive investor to get started in allocating real estate, and putting some money and work into the commercial real estate space?
S.L.: This is a passive investor. Obviously learning as much as you can on your own, from textbooks, and YouTube, and whatever. But really finding that guide whether, again, it’s a mentor, or a sponsor, or a lawyer, or your accountant that happens to know a lot about real estate. Whether you’re buying the real estate directly on your own account, or you’re buying through a sponsor and are owning a piece of it, you really want to – between the offering memorandum (OM), between that and what you do on your own should still be the same amount of information gathering. It’s just being passive, you have the benefit of having a team of people that were paid to put all this together, but you still have to read it, understand it, and be questioning whether what they’re telling you is the whole truth and nothing but the truth. Or they’re spinning it, right? Or they’re just not mentioning it because it can’t be spun.
But when you’re starting out, I just can’t overemphasize someone to help hold your hand, or you hold onto their hand, while you’re working through the first couple of times.
Richard: Right, right. I’ve heard that from many experts in this space. My last question here is – how can an active investor, someone who wants to actively be allocated into commercial real estate, first get started? And part of my question is about how important is it for them to focus on one niche area? You know, you’re very focused on retail, some investors invest in all types of real estate, I’ve got one client who’s done 150 hard money loans, all they do is hard money, residential, fix and flip type loans, very specialized, and sometimes there’s money all over the place – what’s your suggestions to someone getting started in investing in commercial real estate actively?
S.L.: I try to limit the different product types that you’re going to look at. Ideally, you’re only looking at one. The more specific you can be, the quicker and better of an expert you can become about that. That doesn’t mean you can’t change and expand over time, but if one day you’re looking at an office building, and the next day you’re looking at a warehouse. I mean, people do it, and usually they’re more financially focused because they all look the same on a spreadsheet, but real estate investors really need to learn a lot about the product. The properties vary dramatically in what makes them successful is different. So I would recommend sticking with one property type.
Richard: Sure, yeah, makes sense. Great, well I appreciate your time here today, and thank you for the help conducting this whole interview. I know we covered a lot of different questions, about two dozen questions here over the hour, and I’m sure this will be helpful to many people listening. So, if anyone wants to learn more about S.L., then they can visit his website. I was just there earlier today, I think it’s CapRockCommercialRealty.com is your main website, correct?
S.L.: Yeah, the simpler address though is CapRockRE.com. CapRock real estate, so CapRockRE.com, it shows up with that longer name but that gets you there and it’s simple.
Richard: Yeah, that is simple. Well, okay, great, look forward to having you at our CRE Power Players summit coming up in just about 2 weeks, and thanks again for your time today.
S.L.: Alright, thank you, Richard.
Richard: Take care.