Latest / The Hannah Hammond Show / The Passive Income Strategy Rich People Use | Patrick Luther

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The Passive Income Strategy Rich People Use | Patrick Luther · The Hannah Hammond Show

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Everybody sees this $3.5 billion in sales.
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Co founder of National Netley Super success story.
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But where did it all begin? I'm vailing cars at Postino and
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the VIG and I'm just trying to put money together.
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I end up getting like a 30 unit Arcadia really screwy condo
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conversion where the condos were like 150 grand and I sold out
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the 30 units. So I made like 150,000 bucks
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when I was 19/18/19 at ASU. So I'm like selling these condo
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conversions. I think I'm so smart.
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I go in like Lisa Range Rover like an asshole and it didn't
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get repossessed but 2008 and 9 occurred and so all of a sudden
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my 150 goes to like 0. I see a lot of people in their
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50s, sixties, 70s, whatever that are worth hundreds of millions
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of dollars and they're miserable empty shells.
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That's why, like, mental health is like important to these guys.
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And I tell them they're like, what do I need to do?
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Where do you think the bright spot is in retail?
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Do you think it is more affordability or do you think it
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is more like high end experiences, high end dining,
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high end office, you know, those types of things?
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It's a really, really good question.
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Welcome back to the Hannah Hammond Show.
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I am here with Patrick Luther, Co, founder of the National Net
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Lease Group at SRS Commercial Real Estate.
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Well done, you nailed it. Thank you.
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I try but no, I'm super excited. I know you have been friends
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with Jeffrey from our team at HP Capital and we've done a lot of
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business together and you are just a beast in commercial real
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estate Capital markets and Co founded the SRS which has been
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around for a long time. They're they're national net
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lease program and which is what you specialize in and now you
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are nationwide clients for triple net retail investment
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sale leasebacks, pretty much everything retail and then
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you've expanded into industrial heavily now too, I believe as
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well, right. We have, yeah.
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Industrial is the bulk of the growth right now.
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Interestingly enough, I would have told you 10 years ago when
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we started the platform, we were pureplay retail.
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And then the first kind of deviation from that was Med Tail
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when all the medical users started getting into the urgent
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care facilities need to go into a more retail oriented format.
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Now it's industrial only. The pivot to the industrial net
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lease is interesting because a lot of it's driven by the the
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retailer saying, hey, we have some some need between the
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distribution facility. They need to get closer to the
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actual stores, whatever it may be.
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But yeah, it's been a, it's been a fun run.
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So you, you guys did 3 1/2 billion dollars in transactions
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in 2025, which was what was that a 20%, sixteen or 20% increase
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from what you did in 2024? I, I love data because you can
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manipulate it to look really good or really bad depending on
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what what you wanted to say. But we were up, we were up over
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20% from prior year. So the way, and I don't think, I
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don't know if this is necessarily unique to SRS, but
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you know, most brokers if you talk to them like they peaked in
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2022 and everyone's been trying to kind of crawl back to that
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number coincidentally, right, what happened in 22, we had 0%
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rates. And so you know, I look at
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things like the way I look at revenue and brokerage revenue is
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like same store sales, right? Like I could pump the numbers up
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running a brokerage company saying, hey, we're up 50%, we're
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up 100%. I won't name names of people who
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do that, but I could also just go hire 50 more agents, right?
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I have 75 producers at any given time, so I could double my
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producer headcount. But what was good to see from a
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health standpoint was that the individual agents themselves
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were growing again. And that was kind of the first,
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or call it 2025 was the first time we saw things start to
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correct, right? It was 22 to 23 to 24.
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It was kind of a race to the bottom.
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And everyone's production numbers were kind of steadily
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going down, even if they had great businesses, great clients.
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It was just kind of a function of rates.
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But everything's kind of turning right now.
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So it's, it's exciting. Yeah.
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And you guys were up in 2024 from 2023 too.
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So you guys have been growing. I mean, you've been growing.
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Aging power. We did a little bit.
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We 25 was the biggest year in our career from a top line
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revenue standpoint. That's crazy as most people's it
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was like they're one of their worst.
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Yeah. It's it's, we have people that
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tend to focus on brokerages, I think are built with, call it
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cold collars where you put bodies and seats and that works
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to what end? At some point we try to get our
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agents to focus on whatever one particular business line might
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be, right? And the old school way of doing
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that was, hey, pick a tenant, right?
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You, you're the Walgreens guy or you're the 711 guy or whatever
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it might be. And that works really, really
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well until the tenant has a negative earnings like a
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Walgreens and they shut 1000 stores.
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And so that brokers built his entire 10 year business across
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servicing that account. You have to pivot and the guys
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that struggle are caught. The men and women that struggle
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are somehow caught in too much concentration, lack of
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diversification across the types of clients they serve, the
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tenants they work on, things like that.
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Yeah, I think that's so important because we see that
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like in office, right? These brokers have built 30 year
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careers in office and then they're still trying to hold on.
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I don't know if you've read the book who moved the cheese, but
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if the cheese has moved and you keep going back to the same
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feeding ground for the cheese, you got to move.
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Yeah, the office thing is that's literally a story I talked to
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the agents about and it's, I do think back on my I do chuckle
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like it's I feel bad for anyone that has a systemic change in
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their business where they or their family are struggling,
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right? That's not something to be
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excited about or to cheer for. But I do laugh.
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Like when I was starting in commercial real estate, it was
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the guys that were making all the money where all the CBREJLL,
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Cushman, big swinging, whatever office broker guys.
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And they were the guys that would never give me an
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internship. So I started in the scrappy net
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lease retail business and I'm like, you know, how's that
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working out for you now? But yeah, office is tough and
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there's not enough creative. I don't care how you hack it,
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people are going to hack it and figure it out.
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But I mean, the amount of office guys I talked to that are like,
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oh, we bought this office building, we got it for 30 bucks
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a foot. So we have no basis and we're
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going to convert it to residential.
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Call me in three or four years and tell me how that went.
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And most of them were saying, yeah, it was, it was tougher
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than we, it was more challenging than we thought.
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Some hey, we're taking out right losses, others saying, hey, it's
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rough, it's it's rough. The buildings don't format
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right, etcetera. I mean, I do think office is
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super exciting from an inflection point of, you know,
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the people that will figure it out will figure it out and
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there's a lot of money to be made there.
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It's the same as retailing 10-15 years ago when I started it was
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like big boxes going away, right?
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Like it's not going to exist in this format.
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Amazon's going to kill everything.
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All the lenders with paper on malls, boxes, etcetera were
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trying to divest to the paper big box.
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When we get big box retail vacancies, you know SRS is a
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company. The other half of the business
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besides cap markets is tenant Rep.
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We, we don't have enough box vacancy now, right?
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The boxes are full and those users have surprisingly come
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back. You know, you're taking a big
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space and you're cutting it up three or four ways.
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But it used to be that, Oh my gosh, we don't want to get the
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space back. Now it's kind of the opposite.
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So I mean, things change. Like you can't always operate
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with a finite outlook if you're doing the same thing forever.
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You know, it's probably, it's something I've heard you talk
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about on a lot of your podcasts, like the adaptability.
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You always have to be looking at the next thing and the next
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angle to reposition something. Yeah.
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And it all comes down to the supply and demand.
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Like retail wasn't built because everyone thought retail was
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dead. And then now we have a lack of
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supply of retail. And I think you could probably
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speak to this more, but there's still some trouble or vacancy
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with some of the B&C class retail at those old grungy
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shopping centers. But what do you see in there?
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They feel good question so they, they they're full unless the
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building is like systemically not functional.
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We work with Big Lots or worked with Big Lots when the
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bankruptcy was occurring and you know, the solution to all the
8:21
creditors was, you know, when these landlords are getting
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these boxes back, what do we what do we do?
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Who can we put in there right? And SRS represents depending on
8:29
the part of the country and we represent Target, we represent
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Walmart, we represent, you know, a variety of soft good users. 5
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below, you know, Ross, TJX, Marshall's, Hobby Lobby, right?
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So depending on where you were in the country, somebody got us,
8:43
got in touch with us to figure out a solution.
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And the, the biggest inhibiting factor on those boxes is like
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clear height. And it's to pop the roof up is
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really, really expensive. Like it's almost worth tearing
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down at that point. You can put a nice facade on the
8:59
thing, but keep hitting this. You can put a nice facade on the
9:03
thing, but it's, it's really expensive to raise roof height.
9:05
But I would tell you that I don't know of a single big box
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vacancy, sort of Big Lots vacancy in the country.
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I think it's all been backfilled for the most part.
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So even the B&C stuff, you'll move to AB and C tenant category
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or a value oriented user thrift or deep discount or whatever it
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is. So, but you know it and it's the
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same with like the restaurant space, you know, jumping around
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a lot. But the restaurant space when we
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look at retail is really, really exciting right now.
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You look at, you know, oh, OK, what went bankrupt last year and
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you know who's on the verge of it, You know, tgi Friday's went
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away. Trying to be careful with what I
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say in terms of who is and isn't bankrupt.
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Hooters went away, etcetera. But we were busiest with those
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changes and addressing the needs with those vacancies.
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So it's not like, oh gosh, we're nervous.
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It's some bad sign for retail. All that stuff got filled up and
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absorbed, right. So the Twin Peaks is the latest
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one. We've got a theme here.
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We have Hooters, we have Twin Peaks.
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Nobody wants to eat in that type of environment anymore.
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But it was shocking. Yeah, there's got to be some,
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but somebody's going to figure out that how to freshen up that
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dining segment, whatever you want to call it.
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But all that stuff's all that stuff's pretty like we need, the
10:27
market needs vacancy. Like if we don't have vacancy,
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construction costs are prohibitive.
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Retailers can't just go build. You know, you get a typical
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Olive Garden and this is public, it's in their earnings.
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Like Darden's doing super well, Longhorn, Olive Garden, but
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those things are millions of dollars to build.
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They can't back into the economics.
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They do excellent sales per unit.
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I forget what the four wall is, but better for them to just take
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an old Hooters or Twin Peaks. They're the beneficiary of these
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closures. All of a sudden they've told
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Wall Street they need to open 50 stores this year.
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Well, ground up new construction takes 2 years.
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Now they can go in, hey, we'll just go buy these twenty Hooters
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leases and boom, we cut that pipeline in half, we're solved.
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So look, is your glass half empty or is it half full, right.
11:14
And like you just look for the worst thing we could have is
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like a stagnant market where nothing's changing.
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Right. That's the worst, yeah.
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If we, I'd say talk about that all the time, either a falling
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market or a rising market is great, but we need things
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transacting. Otherwise the whole, the whole
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thing doesn't work. Like that's the whole economy,
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right? Things need to be moving one way
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or another, whether they're moving at a lower basis or a
11:34
higher basis. And I think, you know, you look
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at is stuff, the reason why the 222324 cycle was challenging
11:45
among a number of factors is everyone was saying, hey, look,
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if I just wait another couple months, the asset is going to be
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cheaper, right? That's going to get more
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expensive. Rates are rising.
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So the stuff's going to get, why would I buy anything right now?
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So your point, right, everyone sits on the sideline and says my
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buying environment is going to be better and better and better.
12:05
I think we've hit an inflection point in the last six months.
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Like, you know, our numbers as a brokerage company prove it.
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But very specifically, the month of December was our biggest
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month ever from the standpoint of volume sold, brokerage
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revenue, etcetera. So it was almost like everyone
12:22
said, OK, while the rate cuts have occurred because we had
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what, 3 last year and they're saying, gosh, now what I'm
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looking at buying is going to get more expensive.
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So it's the opposite, right? More rate cuts in theory should
12:35
increase prices, right, 'cause people can pay more, that's
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cheaper. I'm having to go through this in
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my head 'cause I don't actually know it that well.
12:43
That's an. Inverse relationship between
12:45
pricing and rates and I was, I was just posted something about
12:48
this a couple days ago. You can't change your basis, you
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can't change the price you pay for the property, but your rate
12:53
adjusts in 35710 years, whatever your, your rate is, but let's
12:57
call it, you know, a 55 or 10 year term.
13:00
And so I would all day long rather take advantage of a
13:03
better priced asset in a more distressed, you know, no buyers
13:08
are out there because rates are high type of environment,
13:10
knowing that in the future rates are more likely to drop because
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we're in a high interest rate environment where historically
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rates are not 2% historically, right?
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So I don't understand why investors were thinking, let's
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go pay massive amounts of prices because these rates are 2% when
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they know in a few years their rates are going to reset and
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their asset value is going to plummet.
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Like, I just don't understand how those numbers computed and,
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and how those decisions were made.
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Like, it doesn't make any sense to me.
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And then when rates go up and asset prices drop, they're like,
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Oh no, we're going to we're going to hold off on the
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sidelines. Or they're just stuck in it and
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they can't get out and they can't take advantage of it.
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I think the answer is because sponsors are incentivized to
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place money and put capital out right.
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And so that's a tough, I always think about, you know, I, I'm
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very focused on running brokerage company, but I always
13:55
think about, gosh, you know, my buddies that are on the Reed
13:58
side are in acquisitions. There's always some narrative
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that, oh, we have guidance out. We have to spend 500 million
14:05
this year or a billion or 2 billion or whatever the number
14:08
is. I have a buddy at a Blackstone
14:10
based public Reed, a Blackstone owned platform.
14:13
And I mean, they have to spend something like $25 billion this
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year. And I always ask the question of
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like, would I want that money to go spend from a self-serving
14:25
standpoint? Yeah, I'd love to be a sponsor
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and get the fees. And, you know, there's lots of
14:28
brokerage income to make. But if you have that much
14:32
capital, you're buying discipline at some point goes
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out the window, right? Like you have to just
14:36
constantly, you might start with good intentions as a sponsor,
14:40
but then you have to modify your box to say, oh, you know, we
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made this work at committee. Yeah.
14:47
And that's, that's very much like institutional investors
14:49
versus private or different. But, you know, back to the, to
14:54
the topic at hand. I I think there's some of the
14:56
smartest people I know. And you have very smart people
14:58
on the show. But they saw last year as an
15:00
inflection point where they were getting ahead of and tying up a
15:02
lot of property and, and buying it or putting it under contract.
15:07
Because to your point, the market for the last couple years
15:09
has been pretty soft. And what's the narrative now
15:12
with my sellers? Oh, rates are coming down.
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I want a little bit more money. Six months ago it was OK, I'm
15:17
ready to sell. I'm ready to be done with XYZ
15:20
asset. Now it's hey, look, so the
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seller greed is coming back a little bit and their motivation
15:27
to do something has changed. The the smartest guys in the
15:30
room were all the guys that knew that rate cuts were coming,
15:33
which it wasn't that ambiguous. We didn't know how many or what
15:37
percentages, but you know, the guys that loaded up in like
15:40
July, August before the first rate cut, they just literally
15:44
got a artificial price discount while they were in escrow,
15:49
right? It's like, OK, we're going to
15:50
postpone our due diligence period after the Fed meeting.
15:54
The deal underwrites and makes sense for us now.
15:57
The rate cut happens in the middle of due diligence boom.
15:59
Our debt just prices better by 50 basis points or whatever it
16:04
might be. Those were the smartest guys in
16:07
the room last summer, right? And you do that with hundreds of
16:09
millions of dollars in capital, you just boom, repriced
16:12
everything. Right.
16:13
And if immediate appreciation at your, your close just because
16:17
your rates are going down and then not to mention we had 100%
16:20
bonus depreciation passed which that's didn't.
16:23
Hurt big beautiful Bill was really big and beautiful for us
16:26
now half of our half of what we did and and HB your company
16:30
helped us with the with quite a bit of the debt.
16:34
December was so busy with car wash sales, car wash and or gas
16:37
stations anything that qualified for bonus.
16:41
Because those have more bonuses. So for the audience that may not
16:44
know, 100% bonus appreciation is like why every real estate
16:47
professional loves real estate and every real estate investor
16:50
loves real estate. It allows you to basically have
16:53
a big reduction in your taxes that is due.
16:56
So when you buy a property, if you're a real estate
16:58
professional, you could buy a property and you can depreciate
17:01
100% the year that you put into service of the the year that you
17:04
buy it. And so let's say you have a
17:06
$300,000 tax bill. You can use that as a down
17:09
payment to go buy an asset and then get a $300,000 plus or
17:13
minus. This is simple math, but a
17:15
$300,000 tax deduction on your taxes, therefore wiping out
17:19
around, you know, $150,000 in taxes, then you can, and then
17:24
you're buying a new asset. That asset appreciates, you add
17:26
value to it, and you get to compound your wealth and profits
17:28
much more quickly. And if you're not a real estate
17:31
professional, you still get that depreciation against any passive
17:33
income that you may have. And so it's the the American
17:37
dream, really. And that was going to phase out
17:39
in 2026 because it had been phasing out over the past
17:42
handful of years, the past four years.
17:45
But Trump with the big beautiful bill reinstated that to 100%.
17:48
And so everybody's super happy and everybody was wanting to
17:50
deploy their capital in December so they can get that 100% bonus
17:54
depreciation because otherwise the money would have been gone
17:56
to taxes anyway. Yeah, So I, I wanted to keep
18:00
diving into real estate, but before we do, I wanted to go
18:02
back to your origin story, right?
18:04
Everybody sees this $3.5 billion in sales Co founder of National
18:08
net Lease super success story. Looking good, feeling good, all
18:11
the things. You get to talk about myself.
18:13
Yeah, yeah, this is. Great narcissist, love to talk
18:16
about themselves. Exactly.
18:18
But you know what? Where did it all begin?
18:21
I, I was reading about you and you said you attribute it to
18:24
your mom. You, you got the idea of real
18:26
estate back in high school and, and you've had some pretty
18:28
difficult and sleepless nights and, and have had to have a
18:31
relentless grit to get to where you're at now.
18:33
So let's go back into some of those dark times and the
18:36
challenges and the ordered story of what got you here.
18:41
Thank you for the opportunity to talk about it.
18:44
I parents are physician of doctor and a pharmacist in town
18:49
and, and it, it really was what piqued my interest, frankly, was
18:54
a, a combination of a little bit of jealousy and I definitely
18:58
have a little bit of a chip on my shoulder and I by no means
19:02
threw up wanting for things, right.
19:05
Dad's not a surgeon or anything like that.
19:07
It wasn't crazy. I wasn't getting an Escalade to
19:09
drive in high school and stuff like that.
19:10
I went to a very good Catholic school, etcetera, for, you know,
19:13
my entire career. So education was important, but
19:16
no one in my family had done any sort of entrepreneurial business
19:19
ever. It was all lawyers, doctors,
19:22
accountants, things like that. So education was important, but
19:26
risk was not something that was, I wouldn't say appreciated, but
19:31
it wasn't something that I learned growing up, like how to
19:33
tolerate risk, how to be entrepreneurial, things like
19:35
that. And so, you know, it being
19:38
around Phoenix, this obviously was a very in the 2000s when I
19:41
was in high school in 37, you know, real estate was very much
19:46
segment commercial where everybody was making money.
19:48
So my high school classmates, like we're, we're hopping in the
19:51
suburban with my family to do ski trips and my friends are
19:54
like hopping on dad's jet. And so I'm like, you know, I'm
19:59
like my parents. I'm like, why can't you have a
20:00
jet dad? You're just a doctor, right?
20:02
Stuff like that. And I started researching like,
20:05
where'd these people make their money?
20:06
And it was just real estate, real estate, real estate, real
20:08
estate and commercial specifically.
20:12
So I said, OK, when can I get a license to do this?
20:15
So I started testing when I was like a junior at Brophy.
20:19
And I was because you could take the classes, but you couldn't be
20:21
an agent until you're 18 or something, so.
20:24
I was taking the courses and I finished everything and I was
20:26
like, OK, the the day I could test or the first testing month
20:29
was May and I turned 18 in April or whatever it was.
20:33
So tested, ended up getting a license and then started kind of
20:39
just literally asking around town, friends and family, like
20:42
who'll take an intern. And that was to my point.
20:44
I wanted to work at CBI, wanted to work at JLL, right?
20:47
Those guys had the biggest listings and none of them would
20:51
take my call. And so I kind of happened into
20:54
retail because there was a guy friend of her family, one of my
21:00
mom's pharmaceutical sales Rep gals like, oh, my, my husband is
21:05
the managing director of Marcus and Millichap.
21:08
He'll take an intern. And I was like, disappointed.
21:11
I was like, well, CB won't return my call.
21:13
Like those are really big listings and I want those.
21:15
And I'm like, I don't want to do these scrappy little retail
21:17
buildings, which was like the total wrong attitude and
21:19
approach, etcetera. So I kind of reluctantly get my
21:24
summer internship at Marks and Miller chap, which is actually
21:27
How I Met Jeff Harris, uncle big dog, but I was where is he?
21:35
So what am what am I doing at this point?
21:36
So I'm a freshman at ASU. I am hanging my real estate
21:40
license, doing residential on the side just to earn
21:43
commissions and and learn how that worked.
21:45
And then I'm working for a guy in town, Joe Campano, who's now
21:50
at CBRE. And Joe was very good to me for,
21:55
for my first summer and he was, he was paying me this is this
21:58
was minimum wage at the time. He was paying me like 8 bucks an
22:00
hour. And Joe is doing really well in
22:02
his mid 20s. He's a developer now.
22:04
I believe he's a pretty successful guy.
22:05
And, you know, I'm. So I'm going to ASU Monday,
22:08
Wednesday, Friday, I'm going to Marcus Tuesday, Thursday.
22:12
I'm vailing cars at Postino and the vig to actually make a
22:17
living on weekends. And I'm just trying to put money
22:20
together, you know, kind of one way or the other and figure it
22:23
out. You know, Marcus wouldn't let me
22:26
hang there, my license there. They're like, you have to hang
22:28
out with a residential firm. Like you're not an adult yet.
22:31
Get out of college. Yeah.
22:33
So then I this is probably a really long winded story at this
22:37
point but so I end up selling, I end up getting like a 30 unit
22:41
Arcadia really screwy condo conversion where the condos were
22:45
like 150 grand and I sold out the 30 units.
22:49
So I made like 150,000 bucks when I was 19/18/19 at ASU.
22:54
So then I start, you know, thinking I'm really smart.
22:57
I'm like, I want to quit ASU. Like screw this finance degree.
23:00
I can make more money in real estate.
23:01
It's like summer of O7, right? So I'm like selling these condo
23:04
conversions. I think I'm so smart.
23:06
I go in like lease a Range Rover like an asshole.
23:10
And it didn't get repossessed, but 2008 and 9 occurred.
23:14
And so all of a sudden my 150 goes to like 0 and I, I hand my
23:19
Range Rover lease back in and like make a payment with like
23:22
the last 10 grand I had in my pocket.
23:25
And it's, I'm 21 at this point. I'm like, OK, well, I got to go
23:29
get a job and there's nothing to do in Phoenix.
23:31
And I know a little bit about retail.
23:33
I've been this Marks and milchip interns.
23:34
So I just, I go to, I go to ICSC and I just print out my resume.
23:39
It's like May of 09. So the world is ending and I
23:42
just walked up to booths without meetings and one guy called me
23:46
back and said I'll hire you on my team at Grub and Ellis to do
23:52
shopping center leasing. I'm like, well, I know to sell
23:57
stuff. I don't really want to lease
23:58
stuff, but like that's a fundamental part of the process
24:01
is like, here's the one catch, like my portfolios in Vegas, I'm
24:05
like, OK, well, I don't really want to live in Vegas, but you
24:08
got to do what you got to do. So then summer of O 9, I moved
24:11
to Vegas. I'm 21.
24:13
I get out of ASU in three years and, you know, that's kind of, I
24:17
started cutting my teeth. I I was the third guy in the
24:20
shopping center sign. It was the Great Recession.
24:22
Nobody was calling. So I was just putting like 1400
24:25
foot nail salon leases at like $18.00 gross for sale.
24:31
That's a really bad lease rate, if anyone's curious.
24:36
And then to get, yeah, to get through that, yeah, to get
24:39
through that, I kind of went back to my roots on the on the
24:42
valet side. And I was, I was a bartender at
24:44
The Mirage. It was a union bar back at The
24:47
Mirage when I was like 2122 for the first six months until I
24:53
figured out how to make my first paycheck.
24:54
And then I quit my bartending job and I've never looked back
24:57
since. But so that gets us to like 22.
25:00
I don't know how much further we're going to go with the
25:01
story. But 2022, so you've built a lot
25:04
in a pretty short period of time since the comeback.
25:06
I mean, you got started in the bottom of the great, you know,
25:09
financial crisis. The GFC started leasing, which
25:12
is how I started too. I would just do, I remember
25:13
doing a deal with Jay Stein and he was like, I've never seen
25:17
someone work so hard on a 1200 square foot crappy retail lease.
25:22
And I was like, well, you're working on this deal too and
25:24
you're like the owner of the whole development firm and the
25:26
whole shopping center. So we.
25:27
Were Jay's very smart? I talked to his team today.
25:29
They called me about a circle. I'm probably revealing this.
25:32
They called me about a Circle K in Florida that they want to
25:34
buy. Oh.
25:36
Well, this won't get released for a couple months, so you'll
25:37
be fine. But yeah, you know, that's it's
25:40
you have to put in the work, you have to put in the grind.
25:42
And people just want to, like you said, go to the big firm,
25:45
chase the big deals, but you, you have to pay the price to be
25:49
successful. Well, in hindsight, the best
25:51
thing that happened was not getting the CB or JLL job.
25:57
And you know, I think those are wonderful companies with runner
26:00
programs and things of that nature.
26:01
If you can get your foot in the door, I think there's some good
26:04
to that formality. I just learned sort of figuring
26:07
it out in a, in a more scrappy way and that the benefit to that
26:11
and I wouldn't everything that happened to me badly.
26:13
You can look and you can whine about things that happened to
26:16
you in your career and how could I have done this better and like
26:18
cry over spilt milk or you can say like, what was the positive
26:21
in that? And the positive was that I got
26:23
to see a lot of transaction. DI got a lot of reps being a
26:28
junior really early on and I didn't have some big
26:31
bureaucratic companies saying you can't do this, you can't do
26:33
that right. And like, you know, nine it was.
26:36
I was the sign call guy and my my senior brokers, good guys.
26:39
I won't mention their names, but they were golfing like they were
26:42
fine. They've made their money.
26:43
They're like there's no velocity here.
26:45
And they were at their California houses in the summer.
26:47
So I'm like tour in space when it's 110.
26:49
But I was meeting real tenants, right?
26:51
And I was really doing the work and I wasn't on some team of
26:54
like, oh, when you get here, you can then get here and here and
26:57
here. And I, I really, I didn't like,
26:59
I had kind of a rejection of authority mentality.
27:01
I was like, I want to make money now.
27:03
And I was like, oh, I made money when I was 19.
27:05
I'm 21 now and I'm broke. But I got to figure this thing
27:07
out. And I really like, didn't like
27:09
being restricted. And so all the CBJLL guys and I,
27:12
I know young guys that go into those programs, it takes them a
27:15
long time to like start really earning income because and then
27:20
long term their senior has to pass in their book, retire, die,
27:25
something like that, God forbid. But it takes a long time to kind
27:29
of there are very few young people below 30 in those
27:32
companies that are doing really, really well.
27:34
There's some right, you can tell they're, they're on their way.
27:36
But you know, I encourage young people that I meet, I'm like,
27:39
get into a company, like stop worrying about your seniors
27:43
title. Stop worrying about oh, the
27:44
company like some of the best places to learn and train are
27:46
like the small regionals because you actually get real world
27:49
experience. You're not just like the 8th man
27:51
on some pecking order of a team. Right and even now, because of
27:56
AI and the access to data and the access to marketing, like I
27:59
was just talking about that with Luke Morrison before you got
28:02
here, the Co founder of Crexy, he was saying just be
28:05
entrepreneurial. Like you don't need we could
28:07
everyone can build their own little mini Blackstone.
28:09
Like you don't have to go be Blackstone and you can have a
28:11
big advantage by being small and being nimble and being and
28:13
that's what we're doing at HP capital.
28:15
Like, yeah, we can beat with CB and all these massive firms, but
28:18
we also have our disadvantages are also our greatest advantages
28:21
that we can actually have a competitive edge, especially in
28:24
a rapidly changing environment with technology.
28:27
Like, you got to be pretty nimble and quick to implement
28:30
these things, and you can't do that so easily if it's a public
28:32
company with layers and layers and layers and layers of
28:35
bureaucracy. It's it's, it's really I don't
28:39
even know to your point, right, There's a lot there that you
28:42
just went through. But you know what these what the
28:45
kids are doing these days, like the kids like how they're
28:49
accessing information, right? Like I'll e-mail somebody in the
28:51
company when we're working for a particular tenant, comps or
28:56
landlords, things like this, right?
28:58
The Twin Peaks, when they announce the closure, I'm like,
29:01
look, I know all these other retailers want to go there.
29:03
Our clients are developers. They want to see these sites and
29:06
these vacancies. I don't know what this kid did,
29:09
one of my junior brokers, but in 15 minutes I had every store,
29:12
their square footage, the parcel size, the landlord's contact
29:16
information and phone number, right?
29:18
I mean, when I started, that's what I was doing IN2000789 as I
29:21
was like staying up until midnight, putting these damn
29:23
lists together and looking at likewhitepages.com for some
29:26
guy's cell phone number. Right now it's like this.
29:29
Does it ask ChatGPT? Yeah, exactly.
29:32
It's a brave new world. But you know, until ChatGPT
29:36
figures out how to put the property in escrow, buy it for
29:39
you, wire the money, etcetera, etcetera, I think we're good.
29:42
But you know, a lot of the administrative functions are
29:46
going away, right? So the real estate practitioner
29:49
has to get better at where's the value going to come from, right?
29:52
Like, OK, you have all this time in your week now where you don't
29:56
have to do data entry and so get really, really, really good at
29:58
something else. Right.
30:00
And that's the relationship, that's the being an advisor of
30:03
fiduciary. It's bringing people together
30:05
because Luke and I were talking about this too, is AI and these
30:09
tools will allow us to be even more important and better at
30:12
what we do because all of our time is freed up from the order
30:16
taker task, doing, you know, research, analytics and things
30:18
like that. And we can spend more time on
30:20
the actual relationship, the actual communication, the
30:22
negotiation, the problem solving.
30:24
And when in a world where there's so much fraud, it's
30:27
going to be so hard to even know it's real or fake people could
30:30
create fake buildings online, fake personas online, like fake
30:33
everything. The relationship is going to
30:34
become even more important. And we were talking about how we
30:38
think the brokerage position, that fiduciary, that
30:42
intermediary is going to become even more important because
30:44
there's going to be so how many opportunities like, right, you
30:46
could tokenize real estate and put it on a marketplace, but how
30:49
do you know which one you want to invest in?
30:50
How do you know which jockey to bet on?
30:52
How do you know who's trustworthy?
30:53
How do you know who's not taking your money?
30:54
And and they don't even actually own any real estate.
30:56
Who's going to vet the AI right? Like it's we call it QC ING
31:00
right? Like we use ChatGPT all the time
31:02
like most brokers do. And if they're not, they've
31:05
window dressed it to their own proprietary AI.
31:08
It's all the freaking same, but we use, you know, when we're
31:12
when we're using it, it's like we always have to quality
31:14
control it. And it's like, to your point,
31:17
it's a relationship business at the end of the day.
31:22
And there's a whole lot of noise out there.
31:24
It's sifting. People ask me like, what are
31:27
you, what do I actually do? Like what am I, what are my
31:30
skills or whatever? And I always say one thing is
31:34
I'm like, I'm really good at probability assessment, right?
31:37
And like, that's the biggest thing you get with anyone in any
31:42
form of the business. Like these 75 agents, many of
31:45
them run their own book, but then there's thirty of them that
31:47
work for me that are constantly pursuing listings, right?
31:51
And I'm paying for it and supporting them.
31:54
But I would say, you know, to sell the 3.6 billion, we sold
31:58
930 properties, right? We analyzed like 3300 of them.
32:03
So we did a BOV for a client on 36300 of them.
32:09
If I had enough time to look at those, I could tell you in 2
32:12
minutes like we shouldn't have spent all this time on this BOV,
32:14
right? There was 1000 of them that we
32:16
didn't have to do because I can look at it and assess it very,
32:19
very quickly. But the whole probability
32:22
assessment thing is something like these young brokers are
32:24
like, oh, I'm struggling. I have all these proposals.
32:25
It's like if you operate just looking to fill your coffer with
32:30
a go, I have proposals. If that's your metric doesn't
32:33
you're not going to make any money if 90% of your proposals
32:35
are unsalable. Like I can go get 500 proposals,
32:38
but is this something I should be spending time on, right?
32:41
Like I have people that call me all the time and they're like,
32:44
oh, hey, Patrick, I'm I'm interested in buying a property,
32:46
right? You get a young person, they're
32:47
like, Oh my God, I want to take that phone call.
32:50
Why would you spend time on this person?
32:51
I'm like, just wait a second. I'm like, let's get him on the
32:54
phone. And I'm polite about it.
32:56
They're like, OK, I want an 8 cap with investment grade credit
33:01
in the top 10 market and I want an ADLTV loan.
33:03
And I'm like, well, I want a fucking pony.
33:05
Like, I don't know, like that's not, is that a buyer?
33:09
Is that a live human being? Like that will buy something
33:12
somewhere, sure, but that's a Unicorn deal.
33:17
That's not worth spending time on, right.
33:19
So like the biggest thing in any business is like probability
33:22
assessment. Like, and I always call it like
33:24
fake work, fake news. Like when these young, oh, I'm
33:26
working on all this stuff, I'm like, show me what you're
33:28
working on. I'm like, OK, 9 out of 10 things
33:31
you're working on are not deliverable.
33:32
Like the property, like everyone's a seller at a price,
33:35
right? So I can go get 10 listings if I
33:37
just go tell the guy is 3 caps worth of five cap and I want to
33:40
waste my time on it. So anyway, I got off on a
33:43
tangent. But no, it's true, it's such an
33:45
important skill set because another way to look at it is how
33:48
Steve Jobs used to explain it. He said signal versus noise.
33:52
You know, and all of the best leaders, CEO's, producers,
33:55
business owners, employees, people in general, they have a
33:58
acute ability to very quickly identify what is signal and what
34:02
is noise and what are the top three things that you have to
34:05
get done every single day to move the needle in the direction
34:08
of your true north and what you're trying to accomplish.
34:11
And if you, because all of us can be busy, all of us can work
34:14
20 hours a day. If we, you know, make ourselves
34:18
busy with things like there's unlimited things to be busy
34:20
with. And then that's what's this.
34:22
The real skill is being able to determine, yes, there's all
34:25
these opportunities and I have to deal with that too, right?
34:27
Everyday there's all these opportunities, all these people
34:29
want to talk to you all, if we want to meet with you all, if we
34:30
want to pick your brain. All these people want to buy a
34:32
deal. All like all these things.
34:33
But like, what is the signal? And I only am going to focus on
34:36
the signal. And I have to say no to 99.9% of
34:40
all the other things. And that's a very difficult
34:42
skill. The worst, you know, the 11 of
34:45
the things I think is interesting when you're talking
34:46
to like successful people is everybody wants to brag about
34:49
what they did and like how they made money and the deal that
34:51
they just absolutely hit a home run on.
34:54
That's interesting. But what's more interesting is
34:55
like where did you screw up? Right?
34:57
And it takes a certain you can't just go and ask somebody.
34:59
You don't know that. But when you get to someone real
35:01
successful and they, you know, they feel like mentoring you or
35:04
sharing or being a little more forthcoming and they're not
35:07
sociopaths. They you can say like, tell me
35:10
about your mistakes. Like that to me is way more
35:13
intriguing and I, and I would, to your point, the biggest
35:16
mistakes I've made are it's not saying no enough to things that
35:20
I should have said no to from the standpoint of money or time
35:24
or whatever it is. And it gets back into like your
35:26
commodity eventually. Like the older I've gotten, it
35:27
becomes time and it's like I have to, I have to do the
35:31
highest value activities per hour.
35:34
That doesn't mean myself or as a firm that we won't service the
35:37
client because again, we're, we're client services firm.
35:41
That is what we do. But does it mean that, hey,
35:44
look, this assignment is not for Patrick Luther himself, Someone
35:48
on the team will service this right?
35:50
And we can do it. And you know, you got to frame
35:54
that properly. You can't be like, oh, I'm not
35:55
good enough for you, right? It's it's just, hey, look,
35:57
someone else has a better expertise in this area or can
35:59
better serve you, assist you, whatever else.
36:01
Like this whole servant leadership thing is really
36:03
important. But.
36:07
Yeah, no, it's, it's so true. And it's difficult, especially
36:10
because a lot of entrepreneurs are people pleasers and they
36:13
want to do they, they're opportunists and they're people
36:17
pleasers and they want to like take every opportunity like, oh,
36:19
what if I should have said yes to that or this?
36:21
But there's opportunity cost every time, every minute you
36:24
spend on one opportunity, you also have an opportunity cost of
36:26
another opportunity that you're missing.
36:28
It's. Hard though, to coach people
36:30
because like these young folks, like I do tell them, like when
36:32
you have nothing going on, the answer is yes, right?
36:35
The answer is yes to everything. And I operated in this, it took
36:39
me until 3-4 years ago to realize, like my answer can't be
36:42
yes to everything anymore. But that's not, is that the
36:45
guidance I would give to someone?
36:46
It depends on where they're at in their career, right?
36:49
Like I am a people pleaser. Like it's, there's something
36:52
like deeply insecure in me about like, why I can't say I want
36:55
everyone to be happy, right? Like Patrick wants everybody to
36:58
be happy all the time. And I want to do great for
36:59
everybody and I want to make all the money and I'd sell all the
37:01
deals. And you get to a point where you
37:04
can't do that or you'll destroy yourself.
37:07
And then frankly, the relation, you'll fail the client too if
37:09
you take on more and you can't serve it does more harm than
37:12
good. So the saying no is like an
37:14
evolved. Yeah.
37:16
That's like my version, you know, my V1 was college V2 is
37:21
like the transition to SRS. So I'm like looking for what's
37:25
the next chapter but. Where do you think you're like
37:28
people pleasing comes from? A deep desire to be loved.
37:34
Like, yeah, like all of. Us right it's something like
37:36
there's something deeply like wrong there I mean, I I don't
37:39
know I go to therapy like as much as I can to talk about it
37:43
but like somebody makes a lot of money telling me what's wrong
37:45
with me yeah you know I think it's it it's some point you have
37:49
to have a natural like curiosity is one thing, but like a desire
37:53
to be great, like a pursuit of excellence and it's truly like
37:58
it's innate, right And it's easy with athletes.
38:00
It's like I ran this fast. I want to run faster, right.
38:04
This very much is how I operate and it drives me but as you get
38:09
older you start to realize like to what end?
38:11
And if you're constantly moving your goal line, you're going to
38:13
be dissatisfied. So it's like I'm on this
38:16
constant place of like, OK, do I want to keep being a masochist
38:19
with my work? Or do I want to, you know, at
38:22
some point you got to like pat yourself on the back and say
38:25
you're doing fine, everything's good.
38:28
Take a deep breath your. Work is not in your performance.
38:30
Yes. You are loved, yes.
38:33
Yeah, but I'll tell you, I mean, at the end of the day, I'm
38:34
always like, I'll catch myself spiraling like shit, what could
38:38
I have done better, right? Like, why didn't I do this?
38:40
But at the end of the day, it's like I consider it personal
38:43
accountability, right? Like I don't, when I screw
38:47
something up, I'm like, what's the lesson there, right?
38:49
How could I have done better? What's the feedback?
38:51
I'm not like, oh, that guy didn't hire me.
38:53
I'm whining, right? I'm feeling bad for myself.
38:56
I don't live and operate that way.
38:58
But there is a bit of like a be kind to yourself in like work
39:01
and life. And you know, if you're
39:02
constantly like down in the dumps, you know, that shows like
39:07
your energy, your energy with clients, like your positivity,
39:11
things like that. It's, it's very, very important.
39:13
Like mental health is like one of the biggest things we're
39:16
really going on on tangent now, but like.
39:17
No, it's true. That's what I talk about all the
39:19
time because yeah, I've done a lot of trauma therapy and just
39:22
psychological psychology studying and healing because I
39:26
had that too. It was always more and more and
39:28
more and more and more. You hit a goal and then you're
39:30
immediately fall right after the high.
39:31
You're immediately followed by what's next.
39:34
I have to do this next thing. How do I build more?
39:36
And I take on more pressure and go do this next thing.
39:38
And then it's just this never ending spiral of of misery and
39:42
it's never enough, right? It's never enough.
39:45
And like, I think you've, it seems like you've done a good
39:47
job kind of raining that in and like, look, I'll have some days
39:50
where I don't, I don't rain it in myself.
39:52
But on the opposite end, I, I generally do think most people
39:56
don't suffer from this affliction that we suffer from.
39:59
I, I think they pretend that they're working hard or they
40:03
pretend that they're busy and they're not.
40:07
Like I, I would, I do tell people they're like, oh, how did
40:09
you get here in this period of your time?
40:13
I'm like, look, I'm not. I always tell folks I'm not
40:15
smarter than you. I just have more reps, right?
40:17
Because I started when I was 18. I just have most folks that get
40:21
out of college, they do something for a year.
40:22
They don't figure out which way is up in their business until,
40:26
you know, they might go from a career one to another.
40:29
I knew exactly what I wanted to do when I was 18.
40:31
I started doing it when I was 18.
40:33
So by the time I was 22, I had four or five years of reps.
40:36
I like young brokers. They start when they're 2223.
40:39
They're not making money until they're 28.
40:41
That's the difference. I just started it earlier.
40:43
Now you will not get the reps and you won't improve if you
40:48
don't put yourself out there. And that's what I struggle with
40:52
when I'm addressing people on my team that'll say, hey, I'm
40:56
struggling, you know, what can you do to help?
40:58
And I'm like, look, there's no epiphanies.
41:00
Like did you show up to the ICSC?
41:02
Did you show up to 10 of them, right?
41:04
Are you in the are you putting in the time, the hours, the
41:06
reps, right? You'll score a lot of points if
41:10
you take a lot of shots at some point, right?
41:12
Like statistically, you look at any sport and activity, there's
41:16
like lifetime scores that were never phenoms.
41:18
They were just consistent. And I'm like, I show up.
41:20
If I'm happy, great. If I'm sad, great.
41:23
I close a big deal. I don't go fuck off and
41:25
celebrate for two or three days. I double down and I'm go to work
41:28
again the next day and again and again and again and again.
41:32
And part of that like that builds your stamina and it's
41:36
like, you know, again, more analogies weight lifting, right?
41:39
Like you can comfortably squat 100 lbs.
41:42
Your goal is to get to 200. Well, throw on 150 and fail.
41:46
It's the same with work, right? It's load management.
41:49
And like we're like, oh, you're, you will learn to be more
41:53
efficient and effective if you just, if you do say yes, you
41:57
load on more pressure, then you can figure out all the other
42:01
stuff. You can figure out how to be
42:02
happy and be a good person and all that other stuff.
42:05
But if you just don't have the stamina on the, the build, if
42:08
people come to me and they're like, I'm, I'm busy, I have 5
42:10
deals. I'm like, you're not going to be
42:12
able to do 10 deals until you take on 20 and you're running
42:16
around like a chicken with your head cut off.
42:17
Like you will figure out what's important and what's not
42:19
important. Yeah, just to take the chance,
42:22
take on the pressure. I mean, that's how you.
42:25
I like that you said that because it's either I have that
42:27
same perspective of I either win or I learn.
42:29
And I don't really believe in failing because I fail.
42:33
You can't grow unless you fail. Let things.
42:37
And so it's not a failure unless you quit.
42:39
And I know it sounds so cliche, but it's so true.
42:41
Like you just keep going. You analyze and don't make the
42:45
same mistake over and over again again, like actually pause,
42:47
analyze where you messed up, analyze what the lesson is, how
42:51
do I get better? How do I grow from this?
42:53
And then you take that experience and that wisdom can't
42:55
be taken from you. So even if you end up in a
42:57
crisis or a crash or you lose tons of money or have a bad deal
43:01
or lose whatever, right, you have that experience and that
43:04
knowledge to be able to go now, do it better, faster and
43:07
stronger. And most people, they just can't
43:09
handle the the pressure. I think a lot of that comes back
43:12
to also is the push versus pull motivation.
43:15
You know, a lot of the unworthiness, the lack of I'm
43:19
not good enough or I needed people to love me.
43:21
Like that's the primary desire in every human being.
43:24
That's how we exist, right? And so if we a lot of
43:27
entrepreneurs or people that didn't feel that for some reason
43:31
as a child from their parents, like they weren't good enough or
43:33
they couldn't live up to the expectations or their dad was
43:35
never around or their mom was a narcissist or whatever, right?
43:38
And their parents were just doing the best they could.
43:40
They're not bad people. Usually that's how I define my
43:42
my family. Right, and I had to have those
43:45
conversations with my parents like I love you to death.
43:47
You did the best you could. You did an amazing.
43:49
It doesn't mean that my 5 year old brain took it that way of
43:52
you guys are awesome. And and like that's what caused
43:55
me to create those biases in my own life.
43:58
But then it served me, it pushed me, it made me relentless, it
44:02
made me obsessed. It made me absolutely committed
44:05
and have this type of grit to get through anything and just
44:07
dial in on on what I was going to accomplish.
44:09
But then at some point I woke up and realized the pattern.
44:11
The probability of OK insanity is doing the same thing over and
44:16
over and expecting different results.
44:17
And I am seeing that any goal I achieve is not followed by the
44:21
satisfaction that I assumed the goal would bring me.
44:24
And I don't want to live like this forever because I see a lot
44:27
of people in their 50s, sixties, 70s, whatever, that are worth
44:31
hundreds of millions of dollars. And they're miserable.
44:33
Empty shells, and that's going to be me.
44:35
And so that's where I started to shift into more of that whole
44:40
motivation. And that first coach I hired
44:42
when I was 25, when I became a millionaire and was suicidal, I
44:45
was like, Hey, how do I, you know, fix this?
44:49
My, me, How do I fix me? And he's like, well, what's
44:51
your, what's your motivation? What's your intention behind
44:54
every action that you're doing? And ultimately it was to try to
44:56
earn love for myself and from other people.
44:59
And he goes, that's all wrong. Like, as long as your intention
45:03
is coming from that motivation to try to earn love, you will
45:08
feel like this for the rest of your life, no matter what you
45:10
achieve on paper. And he said your motivation has
45:13
to come from love. Like you do this, you serve
45:16
people, you create, you grow, you lead because you love
45:20
yourself, not to try to love yourself.
45:22
And that's where I had to go down that whole journey of like
45:25
really exploring where that all came from.
45:27
That's a lot, yeah. We could have a whole podcast on
45:30
that. No, it's very.
45:32
Yeah, That's very. Yes.
45:34
Yes, That's all I'm gonna say. Yeah.
45:35
I don't know if I'm ready to reveal all of this on camera,
45:38
but yes. Yeah, this is only like your
45:40
second podcast, right? The first, the first one was
45:43
audio. This is the no, wait, wait, this
45:45
is the second one on video. Yeah, I did a short one in
45:47
Dallas at one point. But it it's so true and it's,
45:51
you know, people, I think finally it's becoming more
45:54
acceptable for like men in particular to talk about their
45:58
feelings and like what drives them and all these things
46:00
because it really is a sign of strength, right?
46:02
The old be tough, don't bitch and complain like all these
46:05
things. Yes, be tough and be relentless
46:08
at all these things, but also be vulnerable and authentic to like
46:10
we're human beings, we have emotion.
46:12
And if we're disconnected from our emotion for our whole lives,
46:15
like that doesn't help anybody. It doesn't help ourselves and
46:17
it's a waste of our one experience of life that we get
46:22
in this world. And it once you are able to push
46:25
through that and actually love yourself, like not from a
46:28
narcissistic, insecure way, but a whole compassionate,
46:31
empathetic you, you're great. Like, I love you, I cherish you
46:35
and, and who you are. And you don't need it filled
46:38
from other things around you. Then you're able to actually
46:41
create and take on so much more and build so much more because
46:46
the motivation is right. And because you now have that
46:48
pull motivation where you're not trying to force every outcome in
46:51
your life and you're exhausted and you're drained and you're
46:53
fighting everything and you're in this victim scarcity, fearful
46:57
mentality. But now you're like actually
46:59
infinite potential, infinite abundance in this infinite
47:02
energy. And like, that's what I feel
47:03
now. I'm like, bring it on.
47:04
Like every day I wake up and I'm just ready for it because it's
47:06
coming from the right place. No, I'm gonna yeah, you're an
47:08
abundance versus scarcity person.
47:11
Like I'm the like glass half full, glass half empty, right.
47:14
Like I First off, you should also like get paid to talk about
47:18
all that. So you should charge like our
47:20
company would probably pay you to like tell that entire story
47:22
like, but it's, it's, you know, that's why like mental health is
47:28
like important to these guys. Like, and I tell them they're
47:30
like, well, what do I need to do?
47:31
I'm like, look, take a deep breath, get good rest, go to the
47:34
gym, like get in a routine, like, or spend a couple hours or
47:40
days whining about like why the deal didn't go your way,
47:43
etcetera. Like process it.
47:44
Let's figure it out. I'll help you with that.
47:45
Move on. Like the best thing you can do
47:47
for yourself is like, get out of this freaking cycle and, and go
47:50
back to work. Like I'm struggling.
47:53
My deals fell out. Well, how many do you have?
47:56
Five. OK, well, if you had 10, like at
47:59
some point it is numbers and it's probability.
48:01
So like go get 10 and then you'll be it'll roll off you
48:05
when a couple die, which they'll my pipeline blows up all the
48:08
time or it expands and contracts and all that stuff, But it's
48:11
like I've just got enough of it hedged.
48:13
I'm like, you know, makes me feel better having 10 deals
48:16
behind it, right? Like not like, Oh my God, every
48:19
the world is ending. Like the deals are dying.
48:21
It's like, no, I can't control a why are doing something crazy
48:26
and not waving contingencies, not closing escrow.
48:29
I can control going up, showing up to work the next day.
48:33
I can control putting the effort out and getting more listings
48:36
right. So I can.
48:37
It's like we're, we're our owner's worst enemy and like we
48:39
can fix our own problems. And it's like when most people
48:42
talk to me about this and the junior brokers, I'm like, you
48:44
know what you got to do? You're just like, it's right in
48:46
front of you. Just just go do it.
48:49
Like, and they're so worried about like trying to be right or
48:52
trying to convince someone to do something.
48:55
And I'm like, look, you're not, you're not going to the the
48:57
client is the one making the decision.
48:59
Like you don't own the asset. So like it kind of doesn't
49:02
matter what you think or how you feel like you can give advice,
49:07
but at some point, like follow your instructions and like don't
49:09
get worked up. Like people do crazy stuff, like
49:13
you're going to just drive yourself insane if you don't
49:15
operate like that to some extent.
49:17
Well, an energy is so important and that's what the same coach
49:20
taught me, he said. The outcome can only be as great
49:23
as the energetic state in which you initiate the action.
49:26
Interesting. So if you take any action from a
49:29
poor state, your outcomes going to match that.
49:32
It's going to be poor. But if you take an action from a
49:34
peak state, like if I showed up on this podcast, I was like,
49:37
hey, Patrick, I feel like shit, my life sucks.
49:40
I hate myself. Like, are we going to have a
49:42
good interview? No, Hell no.
49:43
But I come up pumped up, peak state, flow state in the zone
49:47
connected. We're going to have an amazing
49:49
conversation and we're going to help a lot of people and all
49:50
these things. And that's the same in deals.
49:52
If they show up and they're like my deal fell out or I'm working
49:55
so hard or nothing's going well or the market sucks, like all
49:59
they're going to do is create. You're going to ruminate, you're
50:02
going to perpetuate. That's like, and I agree.
50:03
And you know what, you might have felt some of those things
50:06
before this interview or whatever, and you're going to
50:09
feel better after you're done, like, right, You show up and do
50:11
the work, like probably feel less like that now if you did
50:14
like show up, right? What scares me with people is
50:18
like when they experience some form of failure, they run away
50:22
or hide or you don't hear from them.
50:24
I'm like, that's the worst thing you can do.
50:25
I'm like, be with people, talk about it.
50:29
Some of the biggest learning opportunities I've had is again,
50:31
to the point of like failures till something like, you know,
50:34
the vulnerability, the authenticity thing.
50:38
You had a guy in the show, Josh Simon.
50:39
I met Josh when Josh built a building at like age 26.
50:45
Josh is one of the first people I call when I've had, you know,
50:48
a failure. I need advice.
50:49
I've had a rough day and like, I don't know if you wanted this on
50:53
the podcast, but he'll he'll tell me the same thing.
50:55
Like, yeah, yeah, yeah, buddy. I did too.
50:57
It's all good. You'll be good.
50:59
Everything's fine. You're doing it right.
51:00
Good job. Keep it up right.
51:03
And that gets back into like who are your mentors and, and who do
51:06
you have as a support structure, things like that.
51:08
But I would say there's like a common thread of most of these
51:11
really successful people. It's like they get kicked in the
51:13
teeth and they wake up and they ask for more so.
51:17
That, that masochistic tendency, but I know we don't have a ton
51:22
of time left, but where, where do you see the future with?
51:24
I mean, there's obviously so much going on in the economy.
51:26
We have AI, the immigration of AI called the mass immigration
51:30
that's that's coming for a lot of orders, taker type admin jobs
51:35
and eventually blue collar construction jobs and things
51:37
like that. And Elon thinks, you know, the
51:39
prices of everything are going to drop tremendously because.
51:42
We need that. Yeah, right.
51:43
I know. But he also says we'll be in a
51:45
world of abundance and everybody will have a high income and the
51:48
cost of goods and services going to be so low and all these
51:50
things. But where does that leave
51:51
commercial real estate over the next, you know, 13510 years?
51:55
Like what? What did I know?
51:55
You don't have a crystal ball and nobody does, but it's fun to
51:57
talk about. What do you think as far as real
52:00
estate, commercial real estate as a whole and also like
52:02
specifically the retail to help perspective in this rise of
52:05
technology and robotics? Markets really market is very,
52:09
very healthy outlook over the next.
52:11
I never like more than a 12 month outlook because I'm like
52:15
I'm like like things change. But I always say, look, barring
52:18
Black Swan events like is there AI don't think there's a
52:20
fundamental like obsolescence to retail like 10 years ago would
52:26
have told you about big box, which is a conversation we
52:28
started in all the demand drivers are there.
52:30
There are enough fresh concepts. I don't care if it's food or
52:34
apparel or big box, whatever it may be like there is depth if
52:38
these spaces go dark. So there's in the companies that
52:41
do the best job with it are the Omni channel guys.
52:43
They're selling you the product through multiple means and the
52:45
retail is some combination of distribution or a billboard or
52:48
this or that. The only thing that I think is
52:52
the, the real big change in the, the net organic stuff that's
52:55
being built in like massive scale is the, the data center,
52:58
the data center stuff. So that's obviously that sits on
53:02
the top from like the standpoint of like, we need more of this
53:05
and that is going to be built in great supply offices on the
53:09
other end of like, OK, what do we do with this?
53:12
At the same time, like the best office space is 100% lease.
53:15
Like we have an office in Newport Beach at Fashion Island.
53:19
Our rents went from 70 bucks a foot gross to like 90 a foot
53:22
gross. Like you don't get concessions
53:24
with Irvine Company, right? And but what they've done to
53:28
command that rent is I have everything I need.
53:31
I have a Whole Foods that I can walk to.
53:32
I have a Hill Stone R&D restaurant that I love.
53:36
I have a Neiman Marcus. If I sell a deal and feel like
53:38
going shopping, right, like every I have a hotel I have we
53:41
have a pseudo Four Seasons flag next door.
53:43
So everything's there. So if you really look at like
53:45
placemaking, it's just that everybody says all office is a
53:48
disaster. It's like if you're a commodity
53:50
office, yeah, it's probably a disaster.
53:52
You're just a race to who's the lowest price per foot.
53:57
But I think in this country I think things are fundamentally
54:01
relatively healthy. The biggest thing that concerns
54:03
me is growing income gaps like the haves and the have nots,
54:08
right? And like you get to where it's
54:10
just like with tax load, like 8090% of the spend is by 5 to
54:15
10% of the population. And the big indicators I look at
54:18
that make me nervous about the only things that make me nervous
54:21
about the state of the economy are like credit card balances
54:23
going way up. So you're like, OK, people are
54:26
paying their bills more slowly. And then you actually look at
54:29
like used car delinquency rates because the a foreclosure on a
54:33
house takes months. If you don't make one car
54:36
payment, your car gets repo, right?
54:37
So you look at like you look at Carvana, CarMax, these guys, you
54:41
look at their repo rates. So when people start slow
54:44
playing that, paying that and putting money on credit cards,
54:47
that shows you, hey, the consumer's under pressure.
54:50
When we look at tenants and retail, like the discretionary
54:52
categories, there's a little less spend there.
54:55
And that's been happening the last year or so.
54:57
Like, are people going to go out to, you know, Top Golf as much
55:02
as they used to, right? And stuff there are always,
55:04
there's a whole value segment of entertainment, but it's like,
55:07
are people going to take a few less vacations?
55:09
Are they going to put a little bit more on their credit card?
55:11
Right. Those things make me nervous.
55:14
The political divisiveness of the country, which I think is
55:17
exacerbated by wealth gaps, that kind of thing makes me nervous.
55:21
Like all the shit happening, we don't have time for a political
55:23
conversation. That kind of stuff makes me more
55:26
nervous than anything else. The K economy and almost wealth
55:30
gaps in. The K economy.
55:31
I heard that the other day. Yeah, rich dad, poor dad, Robert
55:35
Kiyosaki, he he talks about that a lot.
55:38
But yeah, and that's The thing is even, and now with AI, it's
55:40
going to exacerbate it even more because now it's like all
55:43
there's abundant wealth being created, but it's all in the
55:45
hands of a. Few people.
55:47
Five people, yeah. And, but, but that has to be in
55:51
order for there to be economic growth and GDP growth and all
55:55
these things, which I think GDP, that whole indicator is going to
55:57
change because it's not going to be a valid metric.
56:00
But there has to be buyers, right?
56:04
And so it has to circulate. But that's where the complexity
56:07
is, is well, is it all circulating amongst one small
56:10
group? And then it has to be
56:11
redistributed to the, the population so people can
56:14
survive. And we're not in civil war and
56:15
all these difficult concepts, but as far as like utility of
56:19
retail and companies that are growing and going bankrupt,
56:22
because we're seeing a lot of companies go bankrupt and we're
56:24
seeing a lot of companies have massive growth.
56:26
Where do you think the bright spot is in retail?
56:29
Do you think it is more affordability or do you think it
56:31
is more like high end experiences, high end dining,
56:34
high end office high, you know, those types of things?
56:36
That's a it's a don't have enough time to answer the
56:40
question. It's a really, really good
56:42
question. You are seeing pressure on, I
56:45
mean this again could change next quarter, but like LVMH put
56:48
out earnings and they finally saw a contraction even on the
56:52
high end you're starting to look at and this is just fun stuff,
56:54
but like high end Swiss watch manufacturers are actually
56:57
lowering prices, right. I think that might have
57:00
something to do with tariffs etcetera, etcetera.
57:04
Back to all the whole global thing, I think global supply
57:08
market, like supply markets of Labor, I don't think we're going
57:10
to have mass unemployment. The AI stuff scares me with
57:13
certain jobs getting wiped out. But one thing I always like to
57:16
talk about is the biggest thing that we struggle with as
57:20
brokers, the biggest thing that developers, the people that
57:21
build what we lease and sell are they struggle with skilled
57:25
trades and labor, right? So it's not like we don't have
57:27
jobs in this country and or consumers.
57:30
It's the consumers have a skill that's been replaced in some
57:32
way. We don't have enough people to
57:34
do, you know, work with their hands, whatever that might be.
57:38
Again, trades, right. So I look at things like do we
57:41
need, and this again is a huge macro conversation, like do we
57:44
need more majors and like underwater basket weaving and
57:47
stuff like that? Or like do people should people
57:49
go to a learn how to work with iron, steel, whatever it might
57:54
be like, right? Do people should learn how to
57:55
make things and do technical skills.
57:57
The biggest developer issues aside from like supply chain,
58:00
it's supply chain of humans and labor as much as it is
58:03
materials. It's like I can't get capable
58:05
subcontractors. Yeah, yeah.
58:08
But then there's, you know, Elon saying in three years, robots
58:11
will do better brain surgery than any surgeon ever could,
58:15
which means labor is, you know, blue collar is coming next.
58:19
I agree. I Yeah.
58:21
But but people still exist, like people still want to go to
58:24
restaurants, people still want to gather and do podcasts and go
58:27
to conferences and, and go to like Soho House and social
58:29
clubs. And so that's what I, I think is
58:31
like that in person, experience based relationship, like
58:35
connection. We always are going to have it.
58:37
We're not at all just going to like live in our cave in a
58:39
virtual reality, at least not for the foreseeable future.
58:41
And that would be a pretty sad world.
58:43
But yeah, some people do. But yeah.
58:46
No, I I think there's look, it's the Phoenix Open week.
58:49
We're in Phoenix or what's February 4th, whatever it is
58:52
February 3rd today. I can't get a reservation
58:54
anywhere. Right.
58:56
The the same store sales we Rep. I mean it's public.
58:59
I can say it, but there's a we're going to catch restaurant
59:03
in two days catch open their first store in Dallas.
59:07
It's going to be their most profitable unit ever.
59:09
And I mean, we're talking about sit down restaurants now, 10,000
59:13
square feet that are doing 20 five, $30 million in sales,
59:16
right? I mean, you look at things like
59:18
that and you're saying what's wrong with there is nothing
59:20
wrong with the economy, right? But what are you in that you're
59:25
either hyper value. On the other end of the
59:26
spectrum, Texas Roadhouse is a tenant of ours.
59:29
They are the top casual dining chain by I think they would do 9
59:33
million a store on average now. And that's a $1415 steak.
59:38
They have tremendous growth. It's, it's everyone in the
59:41
middle, right? You're either providing and
59:43
everyone says like, oh, we offer the experience where we can
59:46
charge 50 bucks for a steak. No, you don't catch does, you
59:49
don't, right. So you're, you're going to
59:51
struggle, right? You're, yeah, it's 100 now.
59:54
Everything changes. I think it's the the middle is
59:58
what struggles. And it's the same thing with
1:00:00
retail. Like, are you clearly one thing
1:00:02
or another? And we can't be all things to
1:00:04
all people, right? So.
1:00:05
Yeah, be the best at at what you are and forget the rest.
1:00:08
And it's just it's it's capitalism.
1:00:11
You just have to fight for being the best in your niche thing
1:00:15
like who is your client? Who is your avatar and serve
1:00:17
them better than anyone else. I agree.
1:00:19
Cool. Awesome.
1:00:20
Well, we'll end with a rapid fire.
1:00:22
Oh boy, school hard knock style. Oh God.
1:00:26
OK, how old were you? And you became a millionaire.
1:00:30
I was 24, I think plus or minus. I actually haven't been asked
1:00:35
that one in a while. I'd have to look.
1:00:37
The first year I made $1,000,000.
1:00:39
I was 27. Like in my pocket post tax.
1:00:41
Wow. But I think cumulatively I was
1:00:44
2425. That's.
1:00:46
Insane. Yeah, I was 25.
1:00:48
What's the greatest advice you've ever heard or received?
1:00:51
Oh boy. Oh, that's a really, really hard
1:00:54
one. Comparison is the thief of joy
1:00:57
because we're on a whole mental health thing right today.
1:00:59
So let's go with that one. There's probably a lot more.
1:01:01
Comparison is the thief of joy. I like that.
1:01:04
What's the number one thing you attribute to your success?
1:01:10
My, my pain tolerance, yeah, stamina for continuing when I
1:01:16
don't feel good or I don't mentally, emotionally,
1:01:19
spiritually, whatever it is just continuing.
1:01:21
Yeah, I think most of the most successful people I've talked to
1:01:26
or learned from, they just have a massive ability to handle
1:01:29
immense amounts of pain. Yeah.
1:01:31
What's the most important thing? It comes what's the most
1:01:36
important thing when it comes to building and scaling companies.
1:01:42
God, I would almost say pain tolerance.
1:01:44
I, I think it's a, it's an ability to meet your clients,
1:01:49
stakeholders where they're at and find some common ground.
1:01:54
Like I don't want to bastardize it with saying likability, but
1:01:58
it's like the ability to relate to wide swaths of people and
1:02:01
figure out what's important to them and like be able to have a
1:02:03
conversation with them. Because you can't grow if you
1:02:06
can't get people to want to work with you for you, etcetera.
1:02:11
And people aren't going to work with you and for you if they
1:02:13
don't like you or they feel like you're full of shit.
1:02:15
Right. If you could leave one message
1:02:17
to the younger generation, what would it be?
1:02:26
Stop looking at your fucking phone and get out in the world
1:02:29
and meet human beings and learn how to talk to adults.
1:02:32
That's literally what Luke said, Really.
1:02:34
Just on the last interview, Yeah, he said stop scrolling.
1:02:37
Yeah. Yeah, exactly.
1:02:38
I scroll a lot too, but like my doom loop at night.
1:02:41
But yeah, get out of there. Who is your hero and why?
1:02:47
My hero is my mother. Yeah, for sure.
1:02:50
She's mom because she is a hard working Midwest woman who moved
1:02:58
with no money out West Arizona and met my father, the Doctor
1:03:02
Who had a red 9/11 turbo at the time, by the way.
1:03:04
And I'm like, Mom, seriously now it's that the woman like the
1:03:08
point of stamina? My mom raised 5 kids and you
1:03:11
know, everyone handles things differently, but she had a job
1:03:14
the entire time. She was a pharmaceutical sales
1:03:16
Rep. She still works to this day.
1:03:17
She's 65. She doesn't have to, right?
1:03:19
The woman's just a grinder. But at the same time, she is
1:03:24
very devout with her Catholicism, which I appreciate.
1:03:26
She's a great mom to all of our kids.
1:03:28
My dad's dying of cancer, She takes care of him.
1:03:31
The woman's just freaking indestructible.
1:03:33
You know, something's like, really fucked up when that woman
1:03:35
starts crying because it's like she keeps everybody else locked
1:03:39
in, including myself. Yeah.
1:03:41
So that's awesome to have her in your life.
1:03:44
But all right, last question, if you could send one text to your
1:03:48
25 year old self, what would it say?
1:03:51
Or for you is probably if you could send one text.
1:03:53
To your 20 year. Old self.
1:03:54
What would it say? Good one.
1:03:56
Stop caring. Yeah, you'll be fine.
1:03:58
And quit giving a shit about what other people think of you.
1:04:04
Wise, famous words of wisdom. So, well, thanks so much for
1:04:08
coming on the show. Excited.
1:04:09
For dinner at Catch. It's actually tomorrow night, I
1:04:11
think. I'll ask Uncle Jeff.
1:04:12
Thursday and the Open. So excited.
1:04:16
Appreciate you. Thank you.