Latest / Icons of DC Area Real Estate / Jeff Berkes- Creating Vibrant Communities (#99)

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Jeff Berkes- Creating Vibrant Communities (#99) · Icons of DC Area Real Estate

• 0:09
  Speaker A: Hi, I'm John Co, 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 CRE, 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 at Co Enterprises coenterprases.com separately, my private company, Co Enterprises, now will 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 website@coenterprises.com. Thank you for listening. Thank you for joining me for another episode of Icons of DC area Real Estate. My guest for today's show is Jeff Burkis. Jeff is the President of Federal Realty Investments, which is one of the largest REITs in retail in the United States. Last year, early last year, I interviewed his boss and partner, CEO Don Wood of Federal, and Don talked about his corporate background. Jeff has more of a real estate background, which we get into in the episode, and so it's interesting how they co manage the firm and how they look at things a little differently. Don talked about Federal's extraordinary success, which Jeff Reiterates, and then also talks about his opportunities and things that he's been working on at Federal as well. So some of the takeaways of the episode, we talk a little bit about how they co managed the firm, how he came out of the Midwest in a small town and learned the real estate sector through the investment. Arena going up here, coming to Washington to get his MBA and then going into the real estate business through the investment and investment area through ITT and General Electric and then connecting eventually into Federal Realty and growing its career there. He goes on to talk about how Federal dealt with the Pandemic recently and how they were able to renegotiate some of their leases and struggled through that. Their investment strategy, which is really what he oversees for the firm as far as acquisitions and their development projects, they go into their unique ambiances of their projects, which I've noticed ever since I've gone to federal properties here in Montgomery County, primarily in Maryland. Also their expansion now into the healthcare and biotech sectors at pike and Rose, their major project up on the Pike Rockville Pike. Jeff talks about some of the innovative things they've been doing in other markets. They're now in South Florida. They're in Southern California. We talk a lot about his California investments and the Phoenix market. He also talks a little bit about relationships and networking and what's important about growing your network in the industry. So without further ado, please enjoy this wide ranging conversation with Jeff Burkus.
• 5:13
  Speaker B: So, Jeff Burkus, welcome to Icons of DCRA real Estate. Thank you for joining me today, John.
• 5:20
  Speaker C: Thanks a lot for having me. I'm not sure I rise to icon status, but I really do appreciate you thinking of me that way and having me on your show today. Looking forward.
• 5:29
  Speaker B: I did talk about your bio in the preliminary, but just reinforcing that. You are currently the president of Federal Realty, one of the oldest and perhaps most successful REITs in US.
• 5:44
  Speaker C: History.
• 5:45
  Speaker B: You report to my earlier podcast guest, Don Wood. How would you differentiate your role compared to Don's as CEO, and how would you complement him in managing bedroom Realty?
• 6:01
  Speaker C: Well, great question, of course. And Don and I have worked together for a very long time. I think it's going on 23 years. And I think, obviously, you don't work someplace for somebody else for that length of time when you don't, generally speaking, have a meeting in the minds on the things that really matter in running a business like Federal. Don and I have a different angle of approach, if you will. Don came into this business not as a real estate person, as a public company person, and he is very much a public company person that over 23 years has become a great real estate person. And I came into the business a different way. I'm a real estate guy by background, and I've learned primarily from Don the corporate side of the business. So when there's an issue or a problem or some strategy that we need to think through, I think we each have a different angle of approach, but kind of almost always end up in the same place. Or end up in the same place after a healthy discussion between the two of us or with the rest of the senior team here. And it's been a great relationship. Functionally. The corporate side of our business reports up to Don. So things like our general counsel and our CFO and all the accounting and reporting that gets filed and the real estate stuff reports up through me. So development, acquisitions, leasing, property management, asset management, that kind of thing. And then obviously I report to Don as well. So we kind of split the business that way, and I think that's reflected in where we came from and our thinking. But like I said, 99 times out of 100 or something like that, we end up in the same place, and everybody gets the benefit of kind of a different way of thinking to get there, which I think is really cool. And it's been fantastic for me, quite frankly.
• 7:58
  Speaker B: Well, I think it's an excellent compliment because it gives you the corporate perspective and the real estate side, and sometimes they aren't always on the same page, and we can get into that a little bit more in detail. I recently interviewed Gary Rappaport, CEO of the rappaport companies, and he recognized federal as the industry leader in grocery anchor, retail, property ownership, management, and leasing. We also discussed the impact of the pandemic on the industry and its surprisingly strong rebound, with both leasing and tenant sales improving significantly since the end of the pandemic. Any thoughts on those trends, Jeff?
• 8:43
  Speaker C: Yeah, absolutely. And Gary's a legend in our business and one of the hardest working people in our business still, so he clearly understands the business very well, knows a lot about it, and really from every aspect. So I'm glad he sees us in that light. Yeah, the know, the way I think about it, I guess kind of four things came out of the pandemic. The first, and we've seen this happen really whenever there's a major disruption. We saw this back in the financial crisis as well. But there's a flight to quality when there's a disruption, right. So the tenants that are better tenants with the better business plans, the better balance sheets, when the real estate markets get disrupted, they tend to move towards quality. And quality not just in terms of the property and location, co, tenancy, all that kind of stuff, but quality in terms of who owns the property. Do I have a landlord that's well capitalized? Do I have a landlord that's going to think holistically about the property and put the right tenants in and maintain it the right way and market it the right way? So I, the individual tenant, have the best chance for success. And like I said, we saw that. We saw that coming out of the GFC. We saw that coming out of the pandemic, and since the pandemic was over, really had a lot of great tenants to choose from and put into our properties. So I would put that number one. Number two, and I'm sure you heard this from Gary as well, but the tenants really learned through the pandemic the importance of having a store. Right. There was a lot of goods delivered early on in the pandemic when everybody was locked down for a long period of time. But as soon as we were released from our homes to go back out, the importance of a store. And even when we were locked down, the importance of a store through buy online pickup, in store, curbside pickup, that kind of thing, it became very clear that if you want to make money getting goods in people's hands, the best way to do that is with a physical store. Closely related, I think would be number three, which is, look, I think we all learned that or maybe we're reminded that we human beings are social creatures and when you force us inside and don't let us get out and do what we normally do, that's not good. So when all the restrictions about staying at home were lifted, and the tenants and restaurants and movie theaters, gyms, all that stuff were allowed to reopen, there was just a flood of activity at our properties. And the strength of that has just been overwhelming. And it's really great to see everybody back out, having dinner, having lunch, shopping, going to a movie, working out, and really enjoying being a physical, social creature, which, again, we human beings are. So that was a big lesson learned or a big reminder maybe, coming out of the pandemic. And probably the fourth kind of major thing we saw and this could turn around or be alleviated somewhat, I don't think it will be, was people want to do as much of their daily activity as possible closer to where they live than where they work. Right? We know our cities, the urban cords of our cities are struggling because return to office has been slow or people are working from home at least a day or two a week. So people have reorganized their lives around their homes. And most of those homes in the places we do business are in those close, in densely populated, relatively affluent suburbs where we tend to own properties and the amount of traffic, the amount of shopping during the week, the use of the property during the week. Spending has really shifted out of urban cores into those close in suburbs where the bulk of federal properties are located. And could that change? Maybe. I don't think it will though. So those four things, John are some some big lessons learned, things reminded and observations of the pandemic and I would imagine that's pretty close to what Gary had to say. I didn't listen to his pod but I would imagine he would have nailed all of those or at least two or three of them.
• 13:26
  Speaker B: Yeah, he didn't expect what going into it. Obviously he didn't expect what happened. He'd never seen as bad as that and I don't think he ever expected, once he was in the midst of it how quickly it came back out and what the repercussions were of that. But the other thing he talked about, which we may or may not get into later is the inflationary impact of what the Fed did and then how that's impacted the real estate markets as far as investment opportunities, et cetera, and interest rates and everything else. So there's somewhat of a cross current there a little bit on the investment side, but we can get into that a little bit later, if you'd like. So in the meantime, I wanted to focus a little bit about you and your background. Tell us about your origins, Jeff. Youth and parental.
• 14:32
  Speaker C: One of the more unlikely guys to end up in a business like our business that's focused on cities and densely populated urban areas on the coast. I grew up in a small manufacturing and agricultural town in Iowa.
• 14:47
  Speaker B: Really?
• 14:48
  Speaker C: Yeah. Newton, Iowa. 15,000 people.
• 14:51
  Speaker B: Wow.
• 14:52
  Speaker C: Former home and headquarters of the Maytag Company. So not where you'd expect somebody to develop an affinity for open air and mixed use retail properties in cities like Boston, New York, DC, bay Area and La.
• 15:08
  Speaker B: Sure. Is that near Des Moines or is.
• 15:13
  Speaker C: That 30 miles east of Des Moines on Interstate 80?
• 15:17
  Speaker B: Got it. Sure.
• 15:18
  Speaker C: Unless they've changed the exit numbers. Exit 164 and exit 180.
• 15:26
  Speaker B: Yeah. Well, Des Moines is the home, the original home of general growth properties. So they big retail developer, right?
• 15:35
  Speaker C: Yeah. All that went right over my head as a teenager in Newton, Iowa.
• 15:40
  Speaker B: Okay. So what did your folks do? What did your dad do?
• 15:44
  Speaker C: Yeah. So both of my parents were the first people in their families to go to college. Yeah, they met at Colorado State University in the late 50s, early 60s. My mom was a journalism major. My father was a biology major after college, and I think they got married while my dad was still in college. Quite frankly, they got married really young, and his first job was with a pharmaceutical company that placed him in the middle of Iowa for his sales territory. He ended up working, I think, 33 or 34 years for Bristol Myers Squib.
• 16:22
  Speaker B: Oh, sure.
• 16:23
  Speaker C: A big chunk of that in Iowa. Calling on doctors, hospitals, and pharmacies with Newton as his home base, driving around in his car. And my mother was a preschool teacher and then ultimately got into the paint and wallpaper and home decorating interior design world. She had her own business that she ran out of a small office in our downtown.
• 16:47
  Speaker B: Wow.
• 16:48
  Speaker C: That's what my parents did. Nothing at all related, really, to business and nothing at all related to commercial real estate.
• 16:54
  Speaker B: For sure. So did you go to public school there in Iowa?
• 17:01
  Speaker C: Yeah, all the way through. And we had one high school in our town. Ten kids in my graduating class, but, yeah, public school all the way until I went to Colorado to go to the University of Denver, which is where I got exposed to commercial real estate.
• 17:16
  Speaker B: Yeah. Talk about that experience.
• 17:18
  Speaker C: Yeah. Well, so if you grow up in a town like Newton, Iowa, and you go to a place like, Denver probably the last thing you want to do after your freshman year is go back to Newton, Iowa. And I certainly did not want to do that after eleven, eight or nine months in Denver. And my parents were like, oh, hey, that's great if you want to stay in Denver for the summer, but you need to find yourself a job and pay your rent and all that kind of stuff, because we're not going to do that. You could come home and live for free, but you don't want to do that, so it's on you. So I had no idea what I wanted to do when I went to college, like most people that go to college these days and back then as well. So I traced over to the placement office at the University of Denver and there was a posting for an internship in what was called the Data Bank in this company called sure. Yeah. So, you know, I applied for that job and interviewed for that job and was one of six data bankers at the downtown Denver office of what is now CBRE hired for that summer. And I think that was the summer of 1982, and it was, for me, life changing. In 1982, there were 17 high rise office buildings under construction in downtown Denver. Wow. Yeah. The place was just absolute oil boom, all oil boom developers from all over the country in Canada putting up big buildings. And I got tapped of the six, I got tapped to be the guy that had downtown Denver as my you know, this was back before the day of a PC on every desk. And I'd get up in the morning with a suit and tie on and a clipboard and go walk every floor of every high rise office building in downtown Denver and write down who the name of the tenant. And then we all convene in the office later in the afternoon and get out the yellow pages in the phone book and the phone and call the and try and figure out who the decision maker was for office leasing. And then we type all that into a mainframe computer and pass any leads along. We got to the sales guys in the office leasing department.
• 19:32
  Speaker B: Imagine if you had Chet GPT and Costar, then what you could have done.
• 19:37
  Speaker C: Yeah, this was as basic and as brute force.
• 19:42
  Speaker B: Right.
• 19:43
  Speaker C: It was very educational for me because it was just incredibly exciting, positive time to be in that business. There were guys fresh out of school that were making the princely sum of $100,000 a year as 23, 24 year old junior brokers. Everybody had a nice car. The sales manager would roll in cases of beer on Friday afternoon, and it was just a really fun time. So after that summer, I'm like, this might be something I want to do for a career. And I didn't realize it when I enrolled at the university of Denver. But when I went back in the fall and dug through the curriculum book, found that Du actually had a Real Estate finance and construction major. I believe it was the second school in the United States after University of Wisconsin to actually have a major in Real, you know, that was serendipitous. So know quickly Realigned my classes and my major and got my degree in Real Estate Finance from the University of Denver because of that summer. So that was the start.
• 20:53
  Speaker B: Did you go every summer thereafter back to CB?
• 20:56
  Speaker C: No, it was kind of a one and done type thing. I did ultimately go back and work for CB, richard Ellis, a couple of years after I got out of college, they had a training program, it's called the Regional Investment Analyst Program. And so I did that. You got paid a whopping $2,000 a month, so 24 grand a year. And my job was to put together ten year cash flows for the investment, sales and mortgage broker in Seattle and Bellevue, offices in the Pacific Northwest oh, really? Portland, Salt Lake City, the couple of offices in Denver, and I believe an office in Oklahoma City and Albuquerque. So I got a lot of exposure to the brokers. I looked at and worked on a lot of deals, put together a lot of what we now call offering memorandum or OMS, which back then were called sales packages. Got to work on all different product types with a bunch of different people and didn't matter where I lived, really. So one summer I went and lived with a couple of young brokers up in Seattle and worked in a downtown Seattle office. So that CB experience was really great for me. I sat right next to the guy that ran the whole region, a gentleman by the name of George Callis, who was and probably still is a legend of CBRE back in the day. So, yeah, great two year training program that I got a lot out of.
• 22:23
  Speaker B: You and I were CB employees at the same time.
• 22:26
  Speaker C: Oh, really? I didn't know that.
• 22:28
  Speaker B: I joined them in 1983.
• 22:31
  Speaker C: Okay.
• 22:31
  Speaker B: In Oakbrook, Illinois.
• 22:33
  Speaker C: Wow. Yeah, that was a big office.
• 22:36
  Speaker B: We were the number two office in the yep. And the number one office is right here in Northern Virginia, tyson's Corner at the Were. I think it was like the first time in CB history the top two offices were outside of California at the time. And it was just because it was so much activity in suburban Chicago and then here in Northern Virginia. Just unbelievable at the time. So it was an interesting experience. Gary Bieber and I sold a shopping center for him.
• 23:09
  Speaker C: I don't remember Gary. I absolutely remember Gary. He would come and speak at some of the internal meetings and conferences that the investment salespeople would was gary was president, I believe, at the time.
• 23:21
  Speaker B: Yep. Heisman Trophy winner from UCLA.
• 23:24
  Speaker C: He was well, you know, Jim Didion and Gary Bieber, quite the guys back in the day with CBRE.
• 23:32
  Speaker B: Exactly. So you were there for a couple of years and then on you're an it and T after that.
• 23:40
  Speaker C: So what happened is that the whole idea, whether you're a runner for a leasing broker where you made 1000 a month, or you're a regional investment analyst where you made 2000 a month, the idea was you do that for two years and then you brokerage. What happened towards the end of my two year period was when CB was acquired by Fred Malik's Group. I don't know if you remember that. That was in the late 80s, early ninety s, and there was a hiring freeze. So I transitioned from training program into brokerage. I had grown a little bit tired of living in Denver at that point. When I first started at CB in the early 80s, Denver was booming and when I got out of school in the mid eighty s, the boom had gone and it crashed and it was just a really difficult market. It had become a little bit small for me and I really wanted to live on the East Coast. So I moved to Washington DC. And I moved to DC with an acceptance into the MBA program at Georgetown and an acceptance into the MBA program at George Washington University. And no job and no money.
• 24:53
  Speaker B: Why DC?
• 24:55
  Speaker C: Well, New York was my first choice, but I didn't quite know how I would manage New York when I was in my early twenty s. I really wanted to move to New York and live in New York, but I just couldn't figure out how to do it on my own. With no connections and really no financial backing. I kind of had to do everything on my own through and after college, and DC seemed more manageable, quite frankly. I had a girlfriend at the time who could transfer within her law firm to a Washington DC office, so that made it easier.
• 25:30
  Speaker B: There you go.
• 25:31
  Speaker C: But I got here in the middle of 1990 with no job, no money.
• 25:35
  Speaker B: Yeah, market too.
• 25:37
  Speaker C: Right. In a tough market. And thank God I met Susan Caris, who was the first person in our business that I met when I came to DC.
• 25:45
  Speaker B: Really?
• 25:46
  Speaker C: Yeah, through a guy that I used to work with that was friends with one of the Sonomblicks.
• 25:51
  Speaker B: She was at Sonomblic Goldman. Right.
• 25:53
  Speaker C: So he connected me with Susan and she gave me some great counsel and introduced me to a lot of people. And I think through that I was able to get a job at Know, which unbeknownst to me when I was starting the interview process, also had a program where they would pay for your graduate school. So that made it an easy choice for me to go to ITT because I could work during the day, know, then take Monday afternoon off basically, and get all my classes at GW done on Mondays and in the nights.
• 26:24
  Speaker B: What were you doing? Were you a lender or investor or what were you doing?
• 26:28
  Speaker C: Yeah, so ITT was like a mini GE Capital back in those days. In fact, GE Capital bought that business from ITT after I left. But yeah, we were a credit company lender, high loan due cost or loan to value lender. We oftentimes took a participation in a deal or points going out of a loan because most of the loans we did were for transitional properties. We did a lot of apartment building finance in Texas when you could buy apartments for 1015 $20,000 a unit, and they needed a little lipstick and rouge and some intensive management, and they could be sold for double or triple what you paid for them in a five year period. And we took pieces of those deals, and we also did a fair amount of smaller shopping center acquisition loans, which was one of my first exposures to open air retail. That worked out really well. I was able to get started working only a month or so after I moved here and able to work my way through GW at the same time. And that's all how that all happened, but had it not been for know, I might have never found a job and not made it through.
• 27:42
  Speaker B: So had CMBS even unveiled at that point, or was that before CMBS?
• 27:49
  Speaker C: I believe it was pre CMBS.
• 27:51
  Speaker B: That's what I thought.
• 27:52
  Speaker C: Or if CNBS had started, it was in its infancy.
• 27:55
  Speaker B: So, in essence, the SNLs, as they were fading out, you guys kind of stepped in their shoes to some extent then, right? Yeah.
• 28:02
  Speaker C: If you didn't have the quality of property, the track record or the equity to get a loan from a life company, and you weren't willing to sign on the dotted line, 100% recourse with the bank, then you could come to ITT or GE Capital and get your loan done at 80% to 95% loan to cost. That was our business.
• 28:24
  Speaker B: Yes, I was a mortgage banker then, so I remember talking to anybody who could make a loan at a certain level. So, yeah, that was interesting.
• 28:36
  Speaker C: Yes.
• 28:37
  Speaker B: So you got your MBA in international finance at GW, so talk about why and what the thought process there was.
• 28:45
  Speaker C: Well, kind of two reasons. One, I did want to do a check to make sure I was doing what I thought was the right career path for me. And being in DC, of course, was intrigued by all the different things that go on here, especially internationally. So that was one reason. And a lot of the professors that taught at the graduate school at the time in that discipline worked at the World Bank or IMF or something like that, and completely different than anything else I'd been exposed to. So I wanted to learn a little bit about that. And then I didn't want to duplicate what I'd done in my undergraduate studies.
• 29:24
  Speaker B: Oh, sure.
• 29:25
  Speaker C: I understood real estate and real estate finance very well at that point in time and just thought that the classes would be duplicative and not that interesting. So I wanted something related and close, but not exactly what I'd gone through at the University of Denver. So that's why.
• 29:43
  Speaker B: Did you consider the international investment market in real estate?
• 29:48
  Speaker C: Briefly, but you know what it was like in the early 90s. It was tough. Yeah. So there was not an abundance of opportunity. So yeah, I'm sure I thought about that at the time and spent some time looking into it, but obviously nothing materialized.
• 30:06
  Speaker B: So my guess is that Susan introduced you to her husband.
• 30:11
  Speaker C: She did. Is that's correct? That's correct. Actually, Susan and I actually did a deal together when I was at ITT.
• 30:19
  Speaker B: Oh, okay.
• 30:19
  Speaker C: Yeah. That was pretty complicated and difficult to work through, and I think that worked out really well for her client and her and ultimately me, because she had enough confidence in my ability to do stuff to connect me with George. And George said, hey, you know, I'd love to hire you, but you got to have an MBA. And I said, Well, I'll be done with that in a few months. And pretty quickly, after I finished up at GW, I went to work for George, and he and Susan are two of our nearest and dearest friends, and I've known them both now for 30 plus years and a great friendship and obviously learned a lot about investing directly in real estate from George, who's, in my opinion, one of the best. Yes.
• 31:07
  Speaker B: I met him when I was at the Saw Company, and we were in distress, and he was waiting in the wings for opportunity.
• 31:19
  Speaker C: Yes.
• 31:20
  Speaker B: But Mr. Saul was able to struggle through by selling a couple of properties to Giant Food and save the company at the time. So it was an interesting time.
• 31:30
  Speaker C: Yeah. And look, we had a good run at JMB, and then subsequently heidman and it was nice being in the DC office because we had a bit of a mixed portfolio. We had office buildings, obviously, in DC. We had some apartment buildings in Northern Virginia and also some grocery anchored shopping centers in the portfolio that we ran know were able to look for and source those deals for JMB and Hypeman's clients at the time, which, again, was great for me. That's where I continue to develop my interest in open air retail.
• 32:05
  Speaker B: So how long were you with the JMB Hyitman?
• 32:11
  Speaker C: From roughly the middle of 93 till close to the middle of 97.
• 32:18
  Speaker B: Okay.
• 32:19
  Speaker C: Yeah, I think actually it was like August of 93 through April of 97, and I got recruited to come to Federal in 97.
• 32:28
  Speaker B: So when heitman took over GMB portfolio, in essence, you stayed here in DC. You didn't go to Chicago then?
• 32:35
  Speaker C: No, neither George Nora. Were ever in Chicago? We traveled to Chicago a lot, but yeah, we were always and JMB had a big office and a big presence through George's efforts, largely. So there was number of people in the office in property management, leasing, development, that kind of thing. And yeah, they had a big presence here.
• 32:58
  Speaker B: I didn't really understand the dissolution of JMB because there was the formation of Walton Street and then there was Heitman, and it just seemed to me that everything kind of scattered a little bit there.
• 33:09
  Speaker C: Can you so I worked for what was called JMB Institutional. Realty was the pension fund advisory arm of JMB.
• 33:19
  Speaker B: Okay.
• 33:19
  Speaker C: Hypeman at the time was owned by United Asset Management, publicly traded company that owned money managers in different verticals. And Hypen was their real estate. Was their real estate vertical.
• 33:34
  Speaker B: Right.
• 33:34
  Speaker C: So through Hypen, they acquired JMB's institutional business and rolled it into Hypen. And I think that was back in, I want to say that was in late 1994, walton street evolved from a.
• 33:47
  Speaker B: Different part of the company, is that what you're saying?
• 33:50
  Speaker C: That's correct.
• 33:52
  Speaker B: Okay.
• 33:52
  Speaker C: That's correct. And honestly, my memory on how that happened and who went where and why is not that clear anymore. But my opportunity was to go to Heitman and I did and enjoyed working there with Maury and everybody that's still at Heitman for a number of years before coming to Federal.
• 34:13
  Speaker B: So when you came to Federal, what was your role?
• 34:16
  Speaker C: So Federal at the time had two acquisition shops, the street retail acquisitions team and the shopping center acquisitions team. And I got hired. Yeah, Federal was big in street retail back in the mid to late ninety s, and had a completely separate dedicated group to buy and redevelop an asset, manage and lease those properties within the company. And then they had the shopping center group as well, which Robert went and ran. And I worked for Robert when I first came to Federal, and then he ultimately left and went on to found Starwood Urban, and I stayed at Federal after Robert Love and ran the East Coast shopping center acquisition, suffered for oh, that's great.
• 35:00
  Speaker B: How many properties did you buy in that stint? How many properties did you acquire?
• 35:06
  Speaker C: Well, not many because and I think you're going to get to this, there was a handful, or a little bit less than a handful, I think three or four. There was a strategic shift at Federal point in time, and the shift was away from acquiring existing cash flowing properties and into developing ground up mixed use properties. So for somebody who is still relatively young, new in their career on the direct investment side of the business, I really wanted to be someplace where I could do more deals and buy more stuff. So I left Federal in 97 to do that and went to work for Larry Horowitz at Bellsore Properties.
• 35:48
  Speaker B: So when you left Federal the first time or that time don had not joined Federal at that point.
• 35:55
  Speaker C: He had, he had just joined, actually.
• 35:57
  Speaker B: He just joined. Okay.
• 35:58
  Speaker C: Yeah. I think Don had been around for three or four months.
• 36:02
  Speaker B: Oh, really? Okay.
• 36:04
  Speaker C: He was originally hired, I believe around May of 1998 as a CFO. And I think I left in August of 98 or something like that.
• 36:12
  Speaker B: I got it.
• 36:13
  Speaker C: We're going back a long time now. John, you're really testing me.
• 36:17
  Speaker B: Well, I'm just trying to understand because Don went into quite a bit of detail as to what happened with his predecessor and the whole transition and you were not there at the times. It sounds.
• 36:35
  Speaker C: Right. When Don came in was when Steve Gutman was really transitioning the company to be a developer of mixed use properties, largely based on Steve's vision, as it related to retailers wanting to get out of malls and closer to people onto the streets. Which is why federal got into the street retail investing business a few years earlier in the early to mid ninety s. And then of course, with the success of Bethesda Row, steve saw an opportunity to basically take that model and take it to other cities around the country. And that's where the focus of the company was and that's where capital was directed at that point in time. And as somebody in the old line of business, the shopping center acquisition side of the business, I thought it would be best if I went somewhere where I could get a little bit more transaction activity and experience doing deals and doing direct investment in real estate. So, yeah, I left shortly thereafter.
• 37:36
  Speaker B: So then you went on to velsore talk about that.
• 37:40
  Speaker C: You know, George and Susan introduced me to Larry, I'm sure you know, great, great real estate mind and he saw an opportunity give us a little background on, you know, Larry's. Larry's been in the real estate business for a very long time and has a very good big picture real estate investment mind and just incredible savvy deal acumen. And he'd been buying and developing warehouses in Florida, in and around Miami and in and around Tampa. And he saw an opportunity at that time in the late ninety s to basically bring that investment strategy up to Northern Virginia and started buying industrial flex and smaller office buildings in and around Dulles Airport. There was just tremendous activity in Miami, particularly around National Airport with all the goods that were coming in not only directly on transport planes but effectively goods being transported in the belly of passenger planes and it really drove the real estate market and demand for space around the airport. And Larry again has great vision and saw that opportunity in Northern Virginia. Good friend of George and Susan's I'd known Larry a little bit before I started working for him but went to work with him and his wife Beth and a small team that they had to basically build a base of properties in Northern Virginia. So I did that for a couple of years, and Larry was very active. I think while I was there, he bought, like, 18 buildings in 18 months or something like that. And the market was starting to cool off a little bit. Cap rates were starting to go down. It was starting to get a little bit more competitive, a little bit harder to do deals. And about that time, Steve and Don knocked on my door and said, hey, do you want to come back to Federal? We'd like you to come back in a different you know, that's how I ended up coming back to Federal, but I had great experience working with, you know, truly one of the great real estate minds in DC.
• 39:51
  Speaker B: So why did you go back? I mean, why did you stay since you were having such a good time with Larry?
• 39:56
  Speaker C: Well, the opportunity to come back to Federal again was on a bit of a different you know, don and Steve asked me to come back to work closely with Don to reset the strategy of the company. They've gone down the path of doing development and had teed up a number of deals, and largely because of the size of the investment in Santana Row out in San Jose, relative to the size of the company, that wasn't exactly well received by the equity markets needed to reset the course for the company. So Don and I spent a year or so, maybe it was a little bit longer than that, kind of working through where we thought we fit in the public markets and what we thought the opportunities were to reset the direction of the company. And when you looked across the publicly traded shopping center group at that point in time, and you set all the mixed use and street retail stuff aside and just looked at federal shopping centers, they were on many different metrics, far and away better than the competition. So the decision was relatively straightforward that we need to get back into what we'd been doing for years, which was acquiring and redeveloping larger, older shopping centers in close in densely populated and usually affluent communities in our target markets or core markets on the East Coast and in California. And that's what we did. And I think that was about 2002 or three when we formally reintroduced that strategy and started buying and redeveloping shopping centers again.
• 41:38
  Speaker B: Yeah, Don went into quite a bit of detail about that, and then his thought was he wanted to bring balance back to the portfolio. He used that word several times. He probably still does.
• 41:51
  Speaker C: Yeah. Believe me, all of us that work at Federal Realty have heard balance about 359,000,000 times. It was absolutely the right thing to do. Clearly, when you're developing a property, you're taking all kinds of risks. Right. And you can do a little bit of that in a public company. But it needs to be balanced with a portfolio of existing cash flowing properties. And again, we really like, and I know you know this, but we really like buying larger, older centers that we can apply our leasing, management and redevelopment skills to. We have great teams that do that and great teams that know how to market those properties and asset manage those properties, improve the merchandise mix over time and help the tenants do better sales so they can afford to pay higher rents. And that's really been the model here of Federal Realty for now a long time. But we needed to get back to that and balance the ground up development risk with existing cash flowing real estate. So that's why we did that. It's been a great run.
• 43:00
  Speaker B: Yet at the same time you continue with some development activity that's pretty interesting and cutting edge.
• 43:08
  Speaker C: Absolutely.
• 43:09
  Speaker B: You're balancing the steady as she goes with a little bit of risk.
• 43:13
  Speaker C: Right.
• 43:14
  Speaker B: And so pike and Rose was certainly a big risk when you guys jumped into that deal and then of course, Santana Rowe, in essence, you were brought in as a fireman for that one in more ways than what.
• 43:30
  Speaker C: Really actually, I moved to California in early 2004 after Santana Row was already up and running. And the main reason I moved out there really for two reasons. One is we really only had one senior person in the company on the West Coast, a guy by the name of Jan Sweetnum who is still with us. He's our chief investment officer right next to him and have for the last 19 plus years while I've been in California. Great partner and one of the great team members here at Federal. But Yon was all by himself out in California so he needed somebody, know, to bounce ideas off and solve problems with, know, celebrate with and commiserate with, depending on what was going on at the time. So that was one santana Row was.
• 44:22
  Speaker B: A major issue for you.
• 44:24
  Speaker C: Sure, for sure. And then, you know, the second reason I went out there, John, is we wanted to grow the company and we wanted to grow in California. And I'd been working let's call the DC to Boston corridor, know, either lending or direct equity investing in real estate for a long time. I knew the markets, I knew the players, and it was much easier for me to focus on growing the company even on the East Coast, from the West Coast than it was to try and grow the West Coast that I didn't know at all from the East Coast. So that's the second reason I moved. But I understand, yeah, I was not out there to fix Santana Row, if you will. I mean, we had a good team on the ground that needed some support occasionally day to day, but I was not the fireman. Okay.
• 45:10
  Speaker B: Even though there was a fire physically.
• 45:12
  Speaker C: On the property, there was a fire in August of 2002. You're right. I didn't show up until 2004.
• 45:21
  Speaker B: Got it. Okay. Now I understand. So let's turn to your current role.
• 45:25
  Speaker C: Yes.
• 45:26
  Speaker B: You're promoted to president right before the Pandemic in 2019 and remained on the West Coast. How has that transition gone with the challenges the Pandemic inflicted? We may have covered this before, but give me a little bit more perspective from your yeah, yeah.
• 45:44
  Speaker C: So my job now is effectively to manage real estate functions for Federalty on both.
• 45:52
  Speaker B: Yeah.
• 45:52
  Speaker C: We have a great team set up to do that. Wendy Seer, who's been a Federal for a long time, is president of the East Coast. You probably know Wendy. She's great. Yeah, she's great. She has a great team of asset managers and leasing people that report up to her and just do a fantastic job with our 80 or so properties on the West Coast. And then she has a counterpart on these because she has a counterpart on the West Coast by the name of Jeff Kreschek, who's worked with Federal for a long time as an employee and even longer as a partner of Federal's when he was at oh, sure, yeah. Very experienced real estate professional like Wendy, a leasing background. So Wendy and Jeff on the operations side, yan on the investment side. That's my core team for the bulk of the portfolio. And the Pandemic was something else for us to work through, and it really was all hands effort here at Federal Realty. And Don did a really good job leading us through. Know, if you look for silver linings and clouds, I think one of the things that the Pandemic did for us was made us all work together more closely than we were pre Pandemic. During the Pandemic, we were getting 1516 people on the phone every day to talk about what was going on. And then on the West Coast, we had a separate group of people that got together every afternoon to talk through what's happening with the tenants and how to help them resolve their issues, how to get them to pay us. And Pandemic has been long over, and we don't get together every day, and we haven't gotten together for every day for a long time, but we still get together every week. And it's a really good way to make sure everybody at the company that has influence is understanding everything that's going on at the company.
• 47:44
  Speaker B: What percentage of your tenant base had to renegotiate their leases?
• 47:50
  Speaker C: Just, I can ask somebody with better memory than me. There might be some scars issued there, but it was high. And we viewed the Pandemic as something that we would get through, and what we were trying to do was make sure that when we got to the other side of the Pandemic that we and the properties were in the best possible shape. Right. So we made a real effort to have those tenants that could afford to pay us, continue to pay us, and those that couldn't, we tried to work out some sort of creative deal with them where they would stay in business and then ultimately pay back some or all of the relief we gave them. And we did a really big program with a lot of our restaurants to help them through. And it was prescient, if you will, to make those decisions at that point in time. Because when the stay at home rules were lifted and like Gary said, and like I said a few minutes ago, that rush of people came back to the properties, our tenants were set up and ready to go and ready to capitalize on that business as opposed to us having a bunch of dark restaurants and dark storefronts. So that was really a really important focus of ours in the depth of the Pandemic in 2020. And in hindsight, it worked out well. Happy that we took the approach that we took, but it was very hands on. Property managers, leasing agents, asset managers, all of us on the senior team working through every imaginable circumstance you could think of. And then the back office of federal, the people that have to redraft those leases or amend those leases and then administer those redrafts, that was a big ask of them as well. And everybody here stood tall and carried the weight and got through that. And we're, in hindsight, very thankful for that.
• 49:51
  Speaker B: One thing Don I know is very proud of is the idea that you were able to keep your dividends not only firm, but continue to increase throughout the Pandemic, which was pretty impressive. Probably the only REIT in the country that was able to do that, I'm guessing.
• 50:08
  Speaker C: Well, I think there were others. I'm not exactly sure, but if there were others, there weren't many others. But, yeah, we and Don in particular view that as kind of a contract, if you will, with our shareholders. It is an important part of the reason they bought our stock in the first place. And we were going to do everything in our power to make sure we lived up to our end of the bargain. So that was important. And it does separate us, John. I mean, look at 56 years of consecutive annual dividend increases is pretty impressive. And there's no one else does it well. There's nobody else in the publicly traded real estate sector that does that. And when you look through all publicly traded companies, we're in some really good company and very proud of that record.
• 50:57
  Speaker B: That's great. Since you moved to California, what markets have you seen adding most to federal's Western strategy and why do you notice differences among consumers and tenants in the west as opposed to the East Coast markets? Just out of curiosity?
• 51:12
  Speaker C: Yeah, I would say there are probably some differences. They're subtle, taking the last part of your question first there, but they're subtle, I think, in the markets we're in, most people want to gravitate to the same types of things. Of course, Federal long had a strategy in the food side of our business to lease to strong local and regional operators, make the properties unique and exciting, and give people a reason to continue to come back. So you won't see a lot of crossover, obviously, in the restaurant base within our portfolio because we really are trying to support and grow the strong local and regional operators. But a lot of the other categories, you see some similarities in the merchandising. We've grown quite a bit in Los Angeles, which started, I think, in 2012 when we bought Plaza Segundo, and then in 2015, when we developed the Point, which is right next to Plaza Segundo, we bought the bulk of the land for the Point, when we bought Plaza Segundo. So that's a big property and kind of the anchor property, if you will, in La. For us. And then in 2017, we recapitalized and formed a joint venture with Prime Store, which is a Los Angeles based owner, developer of high quality retail properties and largely Latino communities in Southern California. So that transaction added, I think, close to 1.7 million our Southern California portfolio, which was big. And then most recently, and I think we closed our first deal in June of 2021, we've moved into the Metro Phoenix market. So Phoenix Scottsdale Chandler and I think we've invested somewhere between 350 and $400 million in that market in the last couple of years, which we really like. We see great growth prospects in greater Phoenix, largely driven by the universities there. There's over 100,000 college students in Metro Phoenix. And what we learned when we were doing our due diligence and market research is a very high percentage of those students stay in that market after they graduate.
• 53:31
  Speaker B: That's interesting.
• 53:32
  Speaker C: Yeah. There's a fantastic labor pool in ASU.
• 53:36
  Speaker B: Is the largest I think it's the largest undergraduate campus in the country.
• 53:40
  Speaker C: It is.
• 53:41
  Speaker B: They have close to 100,000 students there like that.
• 53:44
  Speaker C: Yeah. And something like 75, 80% of the kids that graduate every year from the Phoenix area colleges stay interesting. Yeah. So if you look at some of the tech businesses that have moved to that market, certainly the chip manufacturing industry that's in that market, a lot of the reasons they've gravitated towards it is there's just a very good labor pool. So that along with look at you back up 20 years or so ago, and we always said, well, we don't want to be in Phoenix because it's growing horizontally. Right. So every time there's growth, a new shopping center gets built and a new apartment and a new mall.
• 54:24
  Speaker B: It's a sprawling city.
• 54:25
  Speaker C: Not anymore. Not anymore, really. And what we noticed, and if you go to that market and you look around the properties that we own, the areas in that market where we've invested, what's happening now is there's no place to grow horizontally, and it's starting to grow vertically.
• 54:46
  Speaker B: Is it the mountains that protect the growth?
• 54:50
  Speaker C: There's some geographic boundaries. There's Native American reservations boundaries.
• 54:56
  Speaker B: Sure.
• 54:57
  Speaker C: The availability of water in certain parts.
• 54:59
  Speaker B: Of the state, utilities are an issue.
• 55:01
  Speaker C: There will create a boundary. And what we saw when we really dug into the market three or four years ago was a single story shopping center with a parking lot in front of it. Built at a zero point 25 Far was likely not the highest and best use of land anymore. Right. So you're seeing Class C office buildings, smaller shopping centers, freestanding restaurants getting torn down in apartment buildings and going vertical and getting built. And to me, as a long term owner of real estate, it's how we look at real estate here at Federal. We think we're going to own it indefinitely. That's exactly what you want to see, because that means the piece of land you're buying that's built to a point. 25 Far is likely not the highest and best use of that land over time. And as leases expire and as you're able to rework the property, you can either add density or you're likely to have less supply in the market, and you can really push rents or both. And that's how we like to invest. So that market we're really excited about. And one of the big growth avenues for us in the West Coast. So you're in La.
• 56:13
  Speaker B: You're in Phoenix, you're in San Francisco area. Are you in San Diego as well?
• 56:18
  Speaker C: Yeah, in the Bay Area. We're really in Silicon Valley. We're not in the city. No. We had one property there for a number of years, which we sold a number of years ago. So the bulk of our holdings are in Silicon Valley.
• 56:33
  Speaker B: You're not in or no, East Bay.
• 56:36
  Speaker C: We are in the East Bay. We own a couple of properties in the East Bay. We own a very infill power center that's partially in Emoryville and partially in Oakland with Home Depot.
• 56:48
  Speaker B: Oh, sure.
• 56:49
  Speaker C: Safeway target north Ulta. Yeah. It's and the retailers are very productive. We own a grocery anchored center in San Ramon, which is kind of the next ring to the east, if you will.
• 57:01
  Speaker B: Right.
• 57:02
  Speaker C: But otherwise, everything we own in the Bay Area is in Silicon Valley. We've grown our portfolio fairly significantly in La. And then if you go down to San Diego, we added a property a couple of years ago called Grossmont Center. That's in La Mesa, out in the east part of San Diego.
• 57:19
  Speaker B: That's interesting.
• 57:20
  Speaker C: Well, it's one of the most fascinating real estate deals I've ever done. It's a huge site. It's right on I eight at an interchange with a heavily traveled highway. It's 60 some acres, a million square feet, with only a couple of exceptions. All the leases expire in 2025. So it's a huge redevelopment opportunity for us.
• 57:48
  Speaker B: Oh, my God.
• 57:49
  Speaker C: And it's not going to be the Santander Row of San Diego by any means. We're not going to go vertical, likely there in this development cycle, but we are going to be able to transform the property and completely change the rent role.
• 58:04
  Speaker B: And really, what's your tenant demand there? It's strong.
• 58:08
  Speaker C: Yeah, very strong.
• 58:10
  Speaker B: So you're going to be like a congressional type of layout or what's the thought process there?
• 58:15
  Speaker C: Yeah, I know it'll be bigger and different than that. There's a very productive Walmart on the site. There's a very there you go. We'd like to see them stay long term. And there's some other I don't see.
• 58:26
  Speaker B: Federal having Walmart on many of their centers. That doesn't strike me as the demographic you're aiming at there.
• 58:31
  Speaker C: Well, you know, what we like is we like a lot of people that spend a lot of money. Yeah.
• 58:39
  Speaker B: Okay.
• 58:40
  Speaker C: We do here in spades. It's really a strong location and going to be a nice growth vehicle for us over the next two, three, four years as we work through the expiration of those leases. So that's where we are in California.
• 58:56
  Speaker B: When I think of your strategy, I always think if you're going to go down to that market, I would want to be in La Jolla. I'd want to be in Fe, you know, places like that where the demographics are such that, hey, here we go. This is federal country.
• 59:13
  Speaker C: Well, it's federal country in terms of population density and traffic and ability to rework a rent roll. Right. I think the average rent at the property is in the low to mid teens, probably more than double that.
• 59:30
  Speaker B: There's your real estate hat coming on.
• 59:32
  Speaker C: That's right.
• 59:33
  Speaker B: Come on.
• 59:34
  Speaker C: And we'll federalize it. It will be a much better place.
• 59:40
  Speaker B: So an analogy to that, maybe, is two properties that I looked at by a guy with the name of Sam Redstone. I think his name was down in Mount Vernon, Virginia, which know right on route one. And you guys acquired there was two centers. I don't think they were both owned by them. It was two different ownerships. But you guys combined the centers. Talk about that deal a little bit. That Mount Vernon Plaza.
• 1:00:08
  Speaker C: Yeah. Well, that's a good deal to bring up for a handful of you know, if you dial back to what we were talking about a few minutes ago. And we're getting back to the strategy of acquiring and redeveloping well located shopping centers that need some investment and need our merchandising and leasing skills. That was the first center. Actually, you're right. It was two different centers, two different owners. That was the first deal that we did after we reset that strategy.
• 1:00:40
  Speaker B: Okay.
• 1:00:41
  Speaker C: So it was hugely important from that standpoint, and then it was probably one of the most complicated and fascinating deals that I've ever had the opportunity to work on.
• 1:00:51
  Speaker B: I think I talked to you about financing it at one point.
• 1:00:54
  Speaker C: Yeah. You may have, because you guys weren't.
• 1:00:57
  Speaker B: Trying to figure your strategy out at the time, even looking at third party financing, and you weren't sure what you were going to do, as I recall.
• 1:01:04
  Speaker C: Right. But we knew it was a great piece of real estate. Right. And here are the elements we had to pull together there. So the land was owned by a couple of families, or maybe it was three or four families in Canada. And we had to rework the right, right groundleys under Mount Vernon Plaza. We had to deal with the seller of Mount Vernon Plaza. You probably don't remember, but at the back of the center, on the Mount Vernon side of the line, plaza side of the line, was an old Ames store.
• 1:01:37
  Speaker B: Right, I remember that.
• 1:01:38
  Speaker C: And one of our public peers had acquired that chain of stores and leases. We had to figure out a way to get control of that lease while we were doing the acquisition without anybody knowing that it was us getting control of the lease. And then we had to buy at the time, what was called South Valley, which is south side of the parking lot. That property was owned by the real estate investment arm of a large insurance company. And I basically had to coordinate pulling all these various pieces together at the same time because we didn't want to have one without the other. And we certainly didn't want to own Mount Vernon with a name store in the back that was controlled by one of yeah, that was that was quite the deal to pull, you know, a lot of moving parts. I remember sitting in my office at Congressional Plaza on Christmas Eve and talking with a gentleman that ran the real estate investment arm of the life insurance company that controlled South Valley and having him telling me we had no deal. Oh, my goodness, he killed the deal on Christmas Eve. And then on New Year's Eve, a short week later, three or four in the afternoon, I'm back in the office on the phone with him again, putting the deal back together. So it was a hairy deal, but we were able to get everything sewn together and pretty much simultaneously close the ground lease, modified, all that kind of stuff. And then fast forward. We're effectively, 20 years later, we own the fee interest in the land. We've redeveloped the center, we added a fair amount of GLA, and it's one of the shining stars, if you will, in our Northern Virginia portfolio. We're really happy to have it. It's been a great property for us, but it was a fine line to walk at the time, that's for sure, and I could not let it fail. We had to get that deal done. That put us back on the map of being back in the business of acquiring and redeveloping shopping centers. So it was absolutely critical that that happened. It was an. Interesting one.
• 1:03:57
  Speaker B: Let's go back to the roots of Federal for just a moment, because I moved here in 1985.
• 1:04:02
  Speaker C: Okay.
• 1:04:03
  Speaker B: And Federal at that point was about 20 years old. So it was a fairly mature shopping center company. It owned maybe four or five centers in Montgomery County. And it started out apparently, as Don Edward cited, was a residential REIT. Initially it was owned apartments, got into retail. The first shopping center they acquired, apparently, was at the time, a CBS anchored center on Old Georgetown Road known as Wildwood Plaza, which I think was the first center that Federal had. And I shopped there when I first moved here, and I thought it was the coolest center I'd ever seen.
• 1:04:43
  Speaker C: Well, hopefully you still shop there, John.
• 1:04:45
  Speaker B: I do occasionally when I really want to go upscale and groceries, I'll go over there to Belduce and we'll poke around there a little bit, find something interesting. But that center and then Congressional and then Federal Plaza, which is where Trader Joe's is now. And then, of course, the predecessor to what pike and Rose is now, which was a Toys R US anchored center, which I think its name I do not remember that center.
• 1:05:23
  Speaker C: Well, you can't first off, I'll give you the name in a second, but you can't forget G Street Fabrics. Oh, yeah, I remember that.
• 1:05:30
  Speaker B: La Madeleine was in there called Midpike Plaza. Midpike Plaza. That's correct. And it also had a big what was it? A big landscape deal or something that was off to the side as you face the property, the east to the north. I can't remember what it was, but all kinds of stuff there on site. Wasn't a bus depot there of some sort, too, or something?
• 1:05:55
  Speaker C: Yeah, the county owns some land on the north.
• 1:05:58
  Speaker B: That's what I thought. Yeah. So the visual of the property, if that hasn't been the most transformative piece of real estate in Montgomery County, I would say that I don't know if there is another one other than the inverse of that of what happened to White Flint Mall.
• 1:06:17
  Speaker C: Right.
• 1:06:17
  Speaker B: So if you want to look at two completely contrasting situations over the last 20 years, is the White Flint Mall site and pike and Rose. So there's an interesting backdrop to a story go ahead. There for sure.
• 1:06:30
  Speaker C: And we're really proud of what we've done at pike and Rose. It's a fantastic property. And every day or week or year or whatever that we operated and invest in it, it just gets better. The food line up here is fantastic. We have some exciting new restaurant coming into the 915 meeting office building that's just getting finished and starting to have its first tenants build out and move in. So it's only going to get better over time. It's a fantastic location, as you so.
• 1:07:02
  Speaker B: Was that property of Steve Gutman vision initially, or was that something that came after his departure?
• 1:07:10
  Speaker C: Yeah, it came after you know, the way we got into that asset, we master lease that property along with, I think, six other properties in New Jersey and one on Long Island from a family based in northern New Jersey. Really, it was another deal, another deal that we had to do, I think it was back in 2007, we had to make a deal with that family to unwind the master leases. And effectively what we ended up doing was trading them our interest in four or five of the shopping centers for their interest in Midpike and a property on Long Island, or we're just wrapping up a redevelopment. I'll come back to that in a minute for their interest. So that allowed us to control the fee at Midpike, which is what allowed us to go into the county and rezone and re entitle the property. I think Midpike had roughly 300,000 retail on roughly 20 acres, and we've got now 3 million entitlements on that same 20 acres. So, yeah, it's worked out well for us and clearly something we've been working on for a long time, but we think it's a great addition to the community, a beacon, if you will, in southern Montgomery County. And again, really proud of the effort the team here has put into it. But that was a post Steve Gutman effort by the team here.
• 1:08:37
  Speaker B: So Evan Goldman, who I think was the first project manager on the project, gave me a tour when the site plan was just being finished and just starting to clear dirt there. And I said, wow, Evan, this is exciting. And then he showed me the renderings and I was like, whoa, this is going to be really special at the.
• 1:08:58
  Speaker C: Know, whether it's pike and Rose or Bethesda Row, Assembly Rows Row, you know, which we affectionately refer to here as the Big Four. There are big mixed use properties. All those properties are local landmarks, if you will. They are a big part of the communities in which they're located. We hope that the people that live in each of those communities use the property, if not daily, weekly, for all different kinds of things. And they've been very well accepted and woven into the communities that surround them. And they all have future phases. We're nearing the end of that in Bethesda because we started it over 25 years ago. But there's still a lot to do at pike and Rows, a lot to do at Santana Row, and a lot to do at our Assembly Row project up in Somerville, Massachusetts. So over time, they're only going to get better and better. Each time we build a building, it seems to change the nature of the property a little bit. It brings more people. It makes it feel like more of a complete neighborhood, and we're just really happy to have those. And it's one of the things that differentiates Federal from all the other publicly traded shopping center companies. Nobody else has assets like that or the skill set to conceive of them, develop them, and then operate them. So it's a real differentiator for us. John.
• 1:10:22
  Speaker B: One question I want to get into philosophically. Is it's clear that there is a special ambiance? I'll start with Wildwood when I went there the first time. There's an ambiance to a federal property, and it's something that is hard to explain, but maybe it's signage. Maybe it's the sense of place, the thought process going into the traffic pattern, both pedestrian and vehicular, the access points and then the storefronts. I mean, there's the physical side, but there's something more to that. So maybe you can speak to that a little bit, if you know what I'm saying. Jeff.
• 1:11:06
  Speaker C: Yeah, I do. And maybe let's step back or go up 10,000ft. And let me tell you kind of where the thinking comes from there. So our goal or what we endeavor to do when you come to a federal realty property is have a great experience. We don't want to be a commodity experience. We don't want to be just a transaction, right? If you want to do just a transaction, there's probably a more efficient way to do it. Right. But we want you to whether it's Wildwood or whether it's one of our more traditional neighborhood grocery anchored centers or one of the Big Four, we want you, when you're at a federal realty property, to have a special experience. So clean, safe, convenient, great landscaping, like you said, great signage, a lot of places outdoors to sit down and have a cup of coffee or something to eat or maybe a cocktail after work. We want to be part of your life and part of the community. That's the goal. So that's why we put a lot of extra time and effort into thinking about things like signage and storefronts and paint colors and landscaping and maintenance of the property. And it all comes from this core belief, and it's quite frankly, more of an art than a science, that if you put together the right retailers and the right businesses and the right restaurants, you create this synergy. It's better for everybody that's leasing space and doing business of that property. They're more successful as a whole, and it's a better experience for the customers that come. So the customers will come more frequently, and when they're there, they'll spend more time, and when they spend more time, they spend more money. And that's great for the tenants. It's great for us, and really makes the place feel like your center and part of your community, not just place you go to conduct a transaction. And that's really the goal.
• 1:13:13
  Speaker B: Another example of a growth trend is economic development. Northern Virginia seems to be accelerating why DC. And Maryland are stagnating. How does this impact your investment strategies going forward in this region? Perhaps overlay that on other metropolitan areas where you invest?
• 1:13:31
  Speaker C: Yeah, I mean, look at we long term need to be in places where employment and incomes are growing, right? And there's a lot of talk about people racing to the sunbelt and going to this small city, that small city and all this population growth and GE. Isn't that great? And we've always thought that, yeah, well, population growth is important, but a lot of times, if population growth is an area with a lot of land that hasn't been developed, that also means a lot of new supply. And this is, in many ways, a very simple business. It's a difficult to execute business, but a very simple business. It's all about supply and demand, right. And we want to be in areas where there's a lot of demand and where new supply one way or the other, either because all the land is already built out or politically, it's very difficult to get entitlements and build new product where supply is in. And so whether it's Northern Virginia or Montgomery County or Metro Phoenix or, you know, there's a lot of different things that drive the two parts of those equations in each of those markets. I can't really point my finger at one or the other and say it's better because of this or better because of that. There's a lot of things we have to take into account when we think through that. But that's what we're looking for when we invest capital. And when you think that way and you think long term and you're in areas where income growth is materially outstripping, inflation, then you have the ability to have your businesses that are located in your properties. Your tenants do better and they can pay more rent, and you can add value to the property faster. It's really the investment philosophy here.
• 1:15:26
  Speaker B: Is federal in the Southeast at all? I'm trying to remember.
• 1:15:30
  Speaker C: We're in South Florida.
• 1:15:32
  Speaker B: Okay, so you're down what, Lauderdale or Miami?
• 1:15:36
  Speaker C: Yeah, we have a big property in Davy called Tower Shops. We just bought the Shops at Pembroke Gardens out west on 75. And then we have a smaller center called Del Mar Village in Broward. And we just redeveloped Cocoa walk in Coconut Grove. And that's a fantastic property, a good example of a property that's benefited from what we talked about several minutes ago, which is people wanting to conduct more of their daily lives closer to where they live as opposed to where they work. Coconut Grove is just a fabulous community. If I was ever to relocate to the Miami area, I wouldn't think about living anyplace else other than it's just it's beautiful. There's great schools, and we own the biggest and best property right in the heart of the city called and complete redevelopment. We tore down a big chunk of the retail space and rebuilt more functional retail space with Class A office above it and redid the rest of the retail that was left and remerchandised. It brought in some great restaurants, and it's just, again, really the heart of the community, and that's what we're looking to do when we redevelop real estate.
• 1:16:49
  Speaker B: Well, let me talk about some other markets. So I think of Atlanta as being a market that you guys should be in, probably if you're not charlote, Raleigh, Durham, Charleston, maybe. I don't know. You're in Charlotesville, which is interesting because my son went to UVA, and first time I went down there to visit, I said, whoa, this is federal realty owns this property. I said, this is interesting. So I wonder how that happened. So it was interesting. I'll leave that at that.
• 1:17:25
  Speaker C: Well, those are all great markets. The thing we have to think about when we think about going into a new market like that is, can we build, over time enough of a portfolio to actually be an influential player in the market?
• 1:17:42
  Speaker B: It's not a single property strategy. This is a market strategy.
• 1:17:46
  Speaker C: Right. Not only does there need to be enough of the type of properties that we want to own, but they need to be owned by people that we ultimately think we can buy from. Got it. So we are very careful about that. And the three you mentioned, charleston might be a little small for us, but the other three you mentioned yeah. Are great markets, and we've just not been able to figure out a way to efficiently and strategically get into those markets we like the ones we're in. We still think we have plenty.
• 1:18:16
  Speaker B: Sure.
• 1:18:17
  Speaker C: But you will see us from time to time, like Phoenix, add a new market. But that was very strategic for us, and we went in in a fairly big way, buying one of the bigger, better shopping centers right in the middle of Phoenix. And we've bolted on to that since that first acquisition. And, like I said, own close to $400 million worth of property there now. So we've got to be able to see our way clear to that to go into a new market.
• 1:18:41
  Speaker B: Interesting.
• 1:18:43
  Speaker C: And that matters from an operational standpoint and being able to hire a team or to hire a team that can really run the property the way we like to see properties run. And also, we want to be able to be a first stop for tenants when they're coming into the market. And if you only have one or two centers to offer them or they're smaller or insignificant, you don't have that. And we don't think that's the best way to go about expanding into a market.
• 1:19:10
  Speaker B: But with Charlotesville, you kind of coupled that in with your DC portfolio, I assume.
• 1:19:14
  Speaker C: Yeah. And it is by far and away the dominant shopping center in, and we've we've had that in the portfolio for a very long time.
• 1:19:23
  Speaker B: Right.
• 1:19:24
  Speaker C: Great asset. And I hope Boyer Center was at UVA. You spent a bunch of money at barracks.
• 1:19:28
  Speaker B: Oh, we had a good time there. Good, good restaurant. Oh, yeah. So inflation and interest rates have risen considerably over the past year. Plus, how has federal adapted to the capital markets changes? Have rents kept up with expenditures in your portfolio? Have you caught up with the collections that you were deferred during the pandemic?
• 1:19:53
  Speaker C: Yeah, to answer the last part of your question, yes. I mean, collections have gone very well for us coming out of the pandemic, and we've had an effort here for a long time to make sure that we're getting rent bumps during the terms of our leases that help us keep up with inflation. So that's been a focus of ours for a long time. I would say when the handwriting was on the wall that inflation was going to kick back up again. We spent a lot of a time with our leasing people, explaining to them the importance of getting bumps during the term of the lease and showing them why that's essential to growing the value of our properties. And our leasing team has done a fantastic job delivering not only good starting rents for us, but also growth during the term of the lease, which has helped us to deal with the inflationary period we're in right now. If you step back and look at us and our public peers, federal has significantly higher built in rent growth in its existing leases when compared to anybody else. So always been a focus of ours, but definitely heightened or sharpened by the environment we're in right now. And then obviously everybody's dealing with this higher interest rate environment that is even higher today than it was last week. Right. I mean, we're in a pretty tough cycle right now. So that's caused us to refocus on how we allocate capital and raise the hurdles in investing new capital, whether that be in a development or an acquisition. And I think that's just going to be part of our business for a while. I don't think anybody here expects the rates to go back to what they were. Hopefully they'll be lower when the Fed stops raising rates and the market settles down a little bit and we get into a more normal interest rate environment. But yeah, been watching that and to a degree expecting it for a while and making the appropriate adjustments.
• 1:21:42
  Speaker B: Sales been affected by interest rate growth.
• 1:21:45
  Speaker C: We haven't seen it yet. And that's, again, John, if you, you know, our assets locally and if you go to any other market where we're located, we're in similar type areas. And generally the people that frequent our shopping centers are not financially stressed, so they're able to doing what they were doing before interest rates ticked up. So we've seen a really nice response in tenant sales at our properties the last couple of years, and traffic is up as well. So I think everybody's been able to work through it. Maybe not the case in smaller markets or further out suburbs or certain parts of the country, but where we've elected to invest our money and deploy our capital. We've generally got a lot of people that make good incomes around each property and people are still spending and working through the inflationary environment.
• 1:22:45
  Speaker B: New recent guests, including Gary Rappaport and Art Fusillo of Lerner have discussed the decline of the regional mall business. Federal has benefited from not entering in that space as well. How do you see inordinate amount of regional mall and big box inventory being repurposed? Is there any opportunity for federal to get involved in those assets? Potentially, yeah.
• 1:23:12
  Speaker C: Just to clarify, I assume you're talking about the anchor boxes at malls and not big boxes general, because the big box part of our business. The leasing is very strong, and I think that's true throughout the public. Peer group anchor occupancies at our properties are very high.
• 1:23:30
  Speaker B: I guess. Let me clarify. Big box, in my opinion, it's less than 10% shop space and the rest is big. 50 to 150,000 square foot box.
• 1:23:41
  Speaker C: Yeah. That's like a department store at a mall or something like that.
• 1:23:45
  Speaker B: Right. But very little inline space.
• 1:23:47
  Speaker C: Yeah.
• 1:23:48
  Speaker B: Which I've not seen at any of your properties.
• 1:23:51
  Speaker C: No, that's not what we own or endeavor to go after. Look at the A or a plus. Malls in this country are doing exceptionally well, and they've all been able to deal with a shrinking department store footprint and brought in different uses to those department store boxes where the department stores left, whether they're retail or entertainment. So I think in the better malls that's gone just fine. And in a lot of cases, I would expect even more productive use of the space than the department store that was in the space just prior. Right. So you may had a department store move out and that box got cut up into two or three different spaces for retailers, restaurants and entertainment. And I would guess the redo of those boxes, you're drawing a lot more traffic to the malls than the department store was prior. We're still overbuilt, like you said, with malls or under demolished. That's probably the other good way to say it. And we're not in that business, and I don't see us getting into that business. We know in our markets world, we want to invest what those malls are, and generally none of them have appealed to us to acquire. We always keep our eye open for stuff, but that's not really a path we've chosen to walk down.
• 1:25:19
  Speaker B: What new concepts have you seen in the entertainment oriented retail, including food and recreational uses? Your Bark social here at pike and Rose is one example. Any others?
• 1:25:29
  Speaker C: Yeah, well, everybody loves Bark social, right. What's not to like about dogs, beer and coffee?
• 1:25:37
  Speaker B: There you go.
• 1:25:38
  Speaker C: It's a great combination. We're happy to have them here. Similarly, up at Assembly Row on one of the future development sites, our team up there did something really creative and they brought in volo. Are you familiar with Bolo?
• 1:25:52
  Speaker B: No.
• 1:25:53
  Speaker C: So Bolo is an organization that effectively arranges sports games for, I think, primarily people in their they built a bunch of sand volleyball courts and pickleball.
• 1:26:04
  Speaker B: Oh, cool.
• 1:26:05
  Speaker C: And then our team also got one of the local craft brewers to set up shop next door. So I think it's Tuesday and Thursday nights. If you go to Assembly Row, there's something like 500, 600 people engaged in their Volo activities at the property. And then they hang around and have a beer, and I'm sure they walk down the street and go to another bar restaurant, Assembly Row.
• 1:26:28
  Speaker B: So how does the Federal get paid for that? Just out of curiosity, what's the deal?
• 1:26:32
  Speaker C: Yeah, it's not a robust economic return from both.
• 1:26:38
  Speaker B: You want the ancillary behavior.
• 1:26:40
  Speaker C: Yeah, absolutely. I mean, it's another five or 600 people at the property twice. Right. And another five or 600 people that are learning about Assembly Row and probably coming there other times of the week. So I think it's great. And our teams have been real creative at finding uses like that to weave into our properties before we go vertical on a site. Pickleball is obviously very big right now. I mean, you can't really read a real estate publication without reading about some pickleball concept that's gone somewhere. And I'm sure a lot of people are doing those and leveraging off the popularity of that activity right now at their properties. But we've always been more focused on, again, being part of the community and being part of what you need every day or every week or every month, and not necessarily hugely entertainment driven. We have a handful of movie theaters at our properties. We have a few other uses like bowling concept or something like that, but we don't go overboard on the entertainment. We want it to be a little bit more daily. Weekly needs organic, shopping oriented, food and beverage oriented. But the interim uses like Bark Social and like Volo up at Assembly Row have just been fabulous ads for us.
• 1:28:05
  Speaker B: So maybe at Bark Social will eventually redevelop that land.
• 1:28:09
  Speaker C: Well, long term, that's planned. Sure.
• 1:28:13
  Speaker B: I see. Interesting. So Federal has recently broadened its real estate use focus to healthcare with biotech plans at pike and Rose and Assembly Row in Somerville, Mass. Your office building expansion at pike and Rose is unique, as your place, quote, unquote, has seemed to attract users. Are other recent trends attracting other user types? What else are you seeing as far as attraction?
• 1:28:45
  Speaker C: Well, I mean, again, step back or step up to 10,000ft. And if you build a property like Assembly Row or pike and Rose, and you've created this great place on the ground level, right? The place with the restaurants, the retail, the services, the great outdoor dining, the parks, the places to sit and have a conversation or a cup of coffee with a friend, what you want to do then is capitalize on that place you've created. You've drawn people to the property. So now let's build some apartments. Let's add a hotel, because not only do people want to shop and eat out and go to a movie, these kind of places, gee, they're great places to live as well. They're also great places to work. So whether that means occupying traditional office space or occupying life sciences space, we want to capitalize on the place we've created and not only create a great place to shop and be entertained and live, but also a great place to work, which is why you've seen us add office. And ultimately, when the market's right back into equilibrium, add life science at a couple of our properties as well. And we've had tremendous success coming out of the Pandemic leasing our office space. Again, if you look at the Big Four properties, our standing office inventory is 97% leased, and we've done close to 60 deals for nearly 900,000 those properties since the middle of 2020. And what we've seen happen is companies that might have been further out in the suburbs or might have been in an older building say, hey, I want to get my employees back to work. And in order to do that, not only do I need to give them a great building with all the appropriate air handling and touchless elevators and touchless faucets in the bathroom to make them feel safe, but they need to have someplace to come to work that they're going to enjoy, where they can walk out the front door and have 1520 places to choose from, to go for lunch, where they can show up early in the morning. And go to the health club and get a workout in before work. Or where they can go to a bar or restaurant after dinner and meet their wife boyfriend. Girlfriend, husband, whatever. And have dinner and a couple of drinks. And that's what employees are demanding of their employers today. The employers recognize that, and that's why we've seen so much demand for office space in our mixed use properties. Oftentimes the tenants that are coming here are paying much more per square foot in rent, but they're taking less space, so their overall rent bill is lower. But we're really happy with how the demand for our office space has accelerated again, largely as a result of the Pandemic and the effort to get everybody back to work. And hopefully, when the market writes itself a little bit, we'll be in a position to continue to add those types of uses and Life Sciences uses at pike and Rose and Assembly Row. But it'll take some time.
• 1:31:56
  Speaker B: Listening to you talk, Jeff, makes me think that if Federal Realty were to assemble, say, 20 acres of downtown Washington and build pike and Rows from scratch there, the land and the incentives were right. It could be very special. And we don't want to be in an urban core, but I'm telling you, the urban core needs a pike and rose right now. Now we have the see, and we know what Eden's has done at Union Market as a special experiment. So those are two good retail examples of the Ambiance.
• 1:32:45
  Speaker C: I think that similar to what you.
• 1:32:46
  Speaker B: Have done, but if we could do it closer to the CBD with something like that, that would be extraordinary. It would actually turn the city around, I think, if it could be done quickly enough. But I don't think it's just it's a dream, that's all. I'll just express it. I'm trying to convene a group of people, some groups, into downtown Washington, spring one of the office buildings to get people to think out of the box, to try to recreate downtown. So if Federal wants to get involved in that, let me know. I'd be love it if you would, to help think through, because as much as you'd like to be first tier and you guys are in most of the places, the urban core still drives the market overall generically, and if it weren't for the Federal government, washington, DC. Wouldn't exist. So here we are. It's a tough time right now, and we need help. So I'll throw it down the gauntlet.
• 1:33:51
  Speaker C: You're right. It is a tough time. And I love what they've done at the Wharf and what Edens has done with the Union Market. I think they're great.
• 1:34:01
  Speaker B: When you hire people. Jeff, what characteristics do you seek at Federal?
• 1:34:08
  Speaker C: Well, again, backing up a bit. Right. So the culture here at Federal is very open, very transparent. Don's created a very flat organizational structure. Everybody here works very hard. Everybody here is very direct and very honest. And whether it's something that's gone right or more importantly, something that's gone wrong, people here are not afraid to raise their hand and let people know that, so problems can be dealt with quickly. So if there's something great going on, we can take advantage of it. So if you want to come work at Federal, you got to be that type of person. If you're used to being in a very hierarchical organization where you got to ask permission from three people to talk to the two people that report up to you, you're not going to make it here. It's open, it's flat, and it's hardworking. And those are the characteristics we look for in people. We want you to be very honest, very honest about what you can contribute, and we want you to be curious, and we want you to have a growth mindset. And there's a statistic here. I don't know it off the top of my head, but our failure rate is within the first three years, right. And we make a hiring mistake. We generally know that hiring mistake reveals itself fairly quickly. If you're at Federal and you're at Federal for more than three years, you're probably here for a very long time. It's just. A great team of people that have been together for a long time because nobody's sensitive about constructive criticism and we're always looking at every situation as, well, we did this last time, how can we do it better the next time? Right. What doesn't work with me, and I don't think it works with a lot of other people here, is, well, why'd you do that? Well, that's how we did it last time. Right. Or that's how we do it. No, it's constant, relentless pursuit of doing something better each time you do it.
• 1:36:20
  Speaker B: Well, change is a constant thing.
• 1:36:21
  Speaker C: Right? That's right. Well, especially in retail.
• 1:36:24
  Speaker B: Yeah.
• 1:36:25
  Speaker C: Just nonstop. So, yeah, you got to be a person that can deal with that and not everybody can. And that's fine. That's fine. You probably stop change. You probably don't fit here long term, but it's a great place to work. Don's created a great culture here and I think that culture know, permeated itself throughout the organization. And again, if you fit, you're going to be here for a long time and have a lot of fun and learn a lot of new things and constantly be, you know, honestly, John, that's why I've stayed here for as long as I have. I've had a bunch of different things here. I've had the ability to grow on my own, uh, necessarily being under anybody's thumb. And we try and give everybody here that same opportunity.
• 1:37:12
  Speaker B: I wanted to pivot back to one question I did not ask, and I wanted to just on that same theme. And that is the difference in your mind from a cultural standpoint of a private equity investment company and a private enterprise and being in a public company with its reporting requirements and all the different I'll just give you my perspective. Mine is you're more like a factory where you're producing things at a fairly steady pace and you want to keep things within a certain beta. You're not looking at great big wins and lean years or saving up for things. Yours is kind of a steady stream of revenues that you want to keep going over time with some uptick. Well, steady uptick.
• 1:37:58
  Speaker C: Yeah. Keep growing over time, but not just.
• 1:38:00
  Speaker B: These expansive growth spikes and then declines based on the economy, which often happens in private equity firms. So talk about the different cultural values since you've been in both sides.
• 1:38:14
  Speaker C: I don't know that it's necessarily a cultural difference. I think it's more of a mindset difference. Right, okay. And to me, the mindset difference comes from we're an investor, not a trader. Right. So the decisions we make are long term decisions to create long term property, level income growth. Right. If we buy something or develop it, like I said earlier, we intend to own it indefinitely. So that changes your thinking when you're making those acquisitions or development or reinvestment decisions. We're not short term focused. Sure, we report our results quarterly, but we think very long term and we think very long term about creating value, creating value within our communities and figuring out the best way over time to add value to our real estate and accretively grow the income streams from our real estate. That's different, obviously, than if you're a trader, because if you're a trader, you're looking to take advantage of not advantage in a bad way by any means, but you're looking to take advantage of a situation and create value and exit in a relatively short period of time. So you do not have that long term investment mindset. So I'm not sure it's a cultural difference. I think it's more of a mindset difference.
• 1:39:40
  Speaker B: How did you sense that you liked the more long range investment strategy as opposed to doing the investment Blackstone model of buy, fix, and sell type of approach to business?
• 1:39:56
  Speaker C: Yeah, I think intellectually made more sense to me because real estate is such a long term asset class. I think it marries the asset class with the investment strategy better blackstone use them as an example. They've obviously been enormously successful, very good at what they do. So it's just different. And it fit better for me in the way I think. So everybody's different in that regard.
• 1:40:23
  Speaker B: Well, it's the roots, I think, of the companies. When you think of Blackstone, their roots is private equity, and then that's their thought process. So it's probably it. So ESG is important today with every real estate. How has federal implemented its sustainability?
• 1:40:42
  Speaker C: Yeah, ESG, you're right, is hugely important these days and has become a big focus at a lot of different levels within the business world. Right. And REITs are no exception. I guess the way we view it know, ESG for us is not a report you need to do or a form you need to fill out or a box you need to check. It's the way you run your business. And before ESG became something that everybody was focused on, we ran our business in a very sustainable way. We were one of the first to start putting solar panels on our roofs to reduce our energy consumption. We started doing that many years ago, and I think we have the largest amount of solar power generated in our properties of any of our public peers, even though our footprint is much smaller than theirs, we, generally speaking on much less square footage than our publicly traded peers. We, for a long time have had a green box initiative that we employ with our tenants where we are building out their box or their space in the most environmentally conscious and sustainable way. We've had that program for a long time. It's been a part of our lease document for a long time before it became a thing to do. The nature of our properties being in closer in locations in a metropolitan area, many with public transportation, many with mixed uses, where people live, work, and play at the same property. Just the nature of our business has been much more aligned with ESG principles, and it's kind of how we've always operated in the last few years. Obviously it's become a reporting requirement and something that's very focused on. But to us, it's more of a way we conduct business and something we've been doing for a very long time.
• 1:42:45
  Speaker B: So it's an ingrained part of your culture is what you're saying?
• 1:42:49
  Speaker C: Absolutely. And if you look at our development programs, we've been developing lead designated buildings for quite a while now. Pike and Rose, I think, is the first I'm not sure if it's still the only, but the first lead gold neighborhood in the know. The seeds for that had to be planted a long time before ESG became a of how it's kind of how we've lived and operated for a long time, john and now it's important, and it's important to report upon. And we're doing mean I would encourage you or anybody that's listening to the podcast to go to our website and read our most ESG, most recent ESG report. It's fascinating.
• 1:43:33
  Speaker B: It's great.
• 1:43:34
  Speaker C: Done a really good job of reducing our electrical and other energy consumption. We've done a great job of acquiring that electricity from sustainable sources. I think 55% of our electricity is from zero carbon sources. That's great. Yeah. That's really good. Yeah. Again, it's part of the thinking and the business philosophy here and has been for a long time before that helps.
• 1:44:05
  Speaker B: Save your tenants money as well as.
• 1:44:09
  Speaker C: Absolutely. And again, we're trying and always have been running the business in the most efficient way possible, a lot of which lines up directly with what people are required to do under ESG.
• 1:44:22
  Speaker B: That's great. So let's shift to personal things. What are your life priorities among family, work and giving back? Jeff.
• 1:44:31
  Speaker C: It'S funny, given what we do right, and given what I do at the company, it almost all melts together. Right. Because what we're trying to do is we're trying to create places that are part of your community, part of your daily life. So if I've got a couple of kids in the car and we're on their way to a lacrosse game or something like that when they were younger, we'd check out three or four restaurants on the way. We would find the best donut, place to buy, donuts to take for the team.
• 1:45:13
  Speaker B: Not at your property, but other people's property.
• 1:45:15
  Speaker C: Yeah. No, we're out in the world looking for stuff. It's time to go out to eat at night. Well, let's check out this place because maybe they'd be good in a federal realty property.
• 1:45:30
  Speaker B: Your whole life is integrated.
• 1:45:32
  Speaker C: Yeah. It's kind of a joke around our house, but somebody asked my son when he was young, at six or seven years old, what's your dad do for a living? Oh, he shops and eats out. So it really is a continuum to me, it doesn't matter what time of day it is or what day of the week it is.
• 1:45:54
  Speaker B: That's funny.
• 1:45:56
  Speaker C: If you do what we do, the way you do it best is by getting out there and traveling, going to different cities, going to different parts of the city you live in, trying new things and seeing what others are doing, and you bring that back to work. And obviously being engaged and giving back is a big part of that as well. And I got a lot of help when I got into this business from people like Susan Karras right. And many others. And one of the ways I give back is if anybody ever wants to talk to me about our business broadly or talk to me about Federal Realty or they need help on an assignment, one of their real estate classes at school, I never say no.
• 1:46:42
  Speaker B: That's great to hear.
• 1:46:44
  Speaker C: Yeah, I think it's important. Look at I grew up in a family that wasn't a business oriented family, not a real estate oriented family by any means. I've never had really one mentor my whole career. I've had probably a bunch of different mentors along the way. And I think especially when you're young and especially when you're trying to figure out what to do, when it seems like there's many, many things that you could do, getting a little advice and input along the way is a good thing, and I'm happy to be able to do that.
• 1:47:20
  Speaker B: What advice would you give your 25 year old self today?
• 1:47:26
  Speaker C: Yeah. Boy, that was a long time ago. Let me think about that. This is a people business. Right. And one of the reasons I like real estate so much is it's very much about the other people in the business. And I think what I would tell myself is just figure out a way to meet and know as many people as you can, even if they don't do exactly what you think you want to do or even if they don't do anything that's directly related to what you're doing today.
• 1:48:02
  Speaker B: Right.
• 1:48:03
  Speaker C: Especially, I think, as you advance in your career, having a broad network of people in the business that do different things is important. So making every effort to do that and do it outside of real estate, too. Right. Yeah. Because everything that goes on in the world one way or the other, impacts what's happening in real estate. Right.
• 1:48:27
  Speaker B: Yeah. I have a community of young people that I've built, and that has been my major message. Just the networking piece and understanding what it is to get to know relationships in our basically. Yep. That's my major theme.
• 1:48:44
  Speaker C: That's great. I agree.
• 1:48:46
  Speaker B: So, Jeff, if you could post a statement on a billboard on the Capitol Beltway for millions to see, what would it say?
• 1:48:54
  Speaker C: Wow, John, that sounds to me like free advertising. So let's see the Capitol Beltway, galler, Maryland and Virginia properties that you can access off the capitol beltway. I think I would say shop at a federal realty property, and I'd list them all, maybe across the bottom. I'd say something like, come check out the new Chesterbrook or something like that. Boy, free billboard on the capitol beltway.
• 1:49:20
  Speaker B: There you go.
• 1:49:20
  Speaker C: That'll take advantage of that, right?
• 1:49:23
  Speaker B: Well, it's interesting. You're the first one, really, to give a commercial message to me to some extent, to be honest with you. I'm sure that's personal message, it's mostly what I've gotten in the past.
• 1:49:36
  Speaker C: I'm sure that's not what you're looking for, but that's my but that's fine.
• 1:49:39
  Speaker B: That's okay. No problem. You have a big footprint, and retailers typically have that thought process because you want to spread it. I didn't tell you that my dad was a department store manager and owner and buyer. So I have retail in my blood. So I know what your thought process is. Big time. It's been a good one. Well, I appreciate your time, Jeff, very much. This has been a really wide ranging and good conversation. I appreciate your time.
• 1:50:18
  Speaker C: I enjoyed it. John, thank you very much for the opportunity. Have a good day.
• 1:50:21
  Speaker B: All right, you too. Bye bye. Social.