Latest / Icons of DC Area Real Estate / Toby Millman-Transforming Spaces: The Art and Science of Real Estate Development (#123)

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Toby Millman-Transforming Spaces: The Art and Science of Real Estate Development (#123) · Icons of DC Area Real Estate

• 0:09
  Speaker A: Hi, I'm John Ko 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 D.C. 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 johnoenterprises C O E E N T E R p r a ses.com separately, my private company CO Enterprises. Now we'll focus only on advisory work for early stage real estate firms and career counseling. If you have interest in learning more about its services, please review my website@coenterprises.com thank you for listening. Thank you for joining me for another episode of icons of D.C. area real estate. My episode today I'm featuring Toby Millman, who is the regional partner for Transwestern Development Company in the Mid Atlantic region. Toby's journey in urban planning and real estate development is inspiring and I think you're going to really enjoy the story. Toby currently oversees the D.C. maryland and Virginia markets and reaches up to the up up the east coast to New York and Boston, but most of his activity so far has been in the Washington area. He joined Transwestern about a year ago and he had been at Brookfield before. Toby grew up here in the Washington, D.C. area in Potomac, Maryland, went to Wootton High School. His father was in the Nuclear Regulatory Commission and worked actually on Apollo 11 space research. His mother was also in technology. They lived in Connecticut. Before he moved here to the Washington area. He was very fascinated with urban Development from an early age, went to the library to study it and was really intrigued and enjoyed his visits to New York and D.C. as a result. So he went to us when he.
• 3:42
  Speaker B: Was in high school.
• 3:42
  Speaker A: He went to a architect presentation of the Smithsonian by Andres Duane and really turned him on to urban planning and development. So that led him to his studying urban planning at Cornell and subsequently Chapel Hill University of North Carolina. So he got an undergraduate at Cornell and a graduate degree at Chapel Hill and decided to get right into the urban planning area. So he joined a firm in Boston, working on the Big Dig there and a big project in India. Decided that he liked the real estate industry after doing a presentation to AEW about a suburban office park in Boston. So he decided to roll into that industry by joining Toll Brothers, big land developer and home builder down in Philadelphia. He moved there, was there for a couple of years, and then decided to come back to the D.C. area and basically found a job in the newspaper with Eagan Young and Taub. Eya. At the time was very early in their career. So he spent several seven years there and really learned the development business with Bob Young and Tob and Terry Aiken. Subsequently, in a joint project, he joined Abdo Development. So Jim Abdo talked him into coming on board and the two of them started developing infill residential development up until the global financial crisis. So then he had to back up and figure out what to do. He and his wife left the area and they started a manufactured housing business up in upstate New York. Did that for a while until he was called by Vernado. Vernado called him and he was able to come down and start their multifamily division after the Yardstrom, after the commercial. So there's lots of activity there. The merger with JBG Smith, which caused JBG Smith, forced him to make a change. So then he joined Martin Ditto, stayed with Martin for a couple of years and then jumped over to Brookfield when they acquired Forest City. And he was overseeing the Navy yard projects, etc. Subsequently, he then joined Transwestern. He was recruited to come over to work for them. And he talks about that. Transwestern is a national development company division of the Transwestern companies, brokerage and investments and other businesses. But this is a special development division that's in multiple cities around the country doing primarily residential development. They also have an industrial division he talks about. So Toby's journey is quite fascinating. He's been through both large and small corporations in the industry, both entrepreneurial as well as Very large companies, Brookfield being one of the largest. So he has quite an interesting career and I think you're going to enjoy this conversation and his lessons learned. So without further ado, please enjoy this wide ranging conversation with Toby Millennium.
• 6:46
  Speaker B: So, Toby Milman, welcome to icons of D.C. area real estate. Thank you for joining me.
• 6:52
  Speaker C: Thanks for having me, John.
• 6:54
  Speaker B: That's great. So please tell me your role at Transwestern Development Company and your day to day active activities at a high level today, if you would.
• 7:03
  Speaker C: Sure, sure, I'd love to. But first, before we get going, I want to thank you for doing these podcasts. I think this is a real service to our community to be documenting these stories of folks who have contributed to our community here. So thank you for doing this.
• 7:21
  Speaker B: You're welcome.
• 7:23
  Speaker C: So I am the regional partner for Transwestern Development Company in the Mid Atlantic and what that means is I oversee the team and the pipeline for development activities for the larger Transwestern companies in the Mid Atlantic states, which is primarily Washington, D.C. maryland, Virginia. Although we do look at sites up the east coast in the Massachusetts, New York, New Jersey area as well.
• 7:51
  Speaker B: So what, 75, 80% in the D.C. area pretty much of your project so far?
• 7:56
  Speaker C: Yeah, I'd say 90, 95%. Right now we're hoping, I mean we're hoping to do more up the east coast, but right now most of what we're.
• 8:04
  Speaker B: Are you doing new business development up there or how are you doing that?
• 8:08
  Speaker C: Yeah, we've looked at a number of sites. We like sites. We're not looking at stuff in like Manhattan or downtown Boston. Those are obviously very competitive. But we've looked at some sites mostly stick built projects in sort of outer areas of New Jersey and the Philadelphia suburbs, Boston suburbs, things like that.
• 8:29
  Speaker B: So do you do, just out of curiosity, do you do joint ventures with other developers? Are you looking purely at your own projects and just capitalizing them?
• 8:39
  Speaker C: We primarily do our own projects for our own sponsor, although we do a fair number of JVs as well. It's somewhat opportunistic. So if there's a, if there's an owner of real estate or somebody has real estate tied up, we're more, more than happy to talk to them about JV and those deals. We're also doing some fee development work. So we're doing a conversion right now in downtown D.C. with a lender that had to take an office building back. So where their owner's rep on that project working on a fee basis.
• 9:12
  Speaker B: Cool, that sounds great. So let's switch back, go Back to the time machine here and talk a little bit about your origin story, where you came from, Toby, and your background and your family, if you would.
• 9:25
  Speaker C: Sure. I grew up in the Washington area in Montgomery County, Maryland. Potomac, Maryland, to be precise. My dad was a mechanical engineer working for the federal government. He worked for the Nuclear Regulatory Commission. So he worked in the area of regulating nuclear power plants. But prior to that, we were living up in Connecticut before we moved to the Washington area. One of the interesting jobs he had was he was working with a team that designed the backpacks that the Apollo 11 astronauts landed on the moon. Yeah, really cool. So he always talked about that as being one of the more kind of fascinating aspects of his career. But when we were four years old, when I was four years old, he took a job with the federal government and moved. Moved to Maryland. My mom had a series of careers. She. When we were living in Connecticut, she worked for United Technologies. She, I'm sure, was one of the very first women working with computers, mainframe computers for United Technologies. And we moved down to the Washington area. She wound up being a consultant for hospitals that were doing, you know, that were looking to invest in their. In their assets and in their properties. So in some ways, now they think about it, I mean, she was sort of active in the real estate world with the hospital industry. And then she ultimately, kind of mid to late career, got her CPA and became a CPA and an accountant and had a couple different jobs. But she ended her career with Wyeth Erst, the pharmaceutical company in Philadelphia.
• 11:10
  Speaker B: Wow.
• 11:10
  Speaker C: She had a very interesting and varied career.
• 11:15
  Speaker B: But you had technologist parents. That's quite something.
• 11:19
  Speaker C: Yeah, they were both. Yeah. Sort of analytically oriented.
• 11:23
  Speaker B: Yeah, that kind of sets you up for that kind of a career. So talk about high school and, you know, growing up, did you have any siblings?
• 11:33
  Speaker C: So I have one sister. She still lives in the Washington area. Both my parents and I, I went to high, which is public high school in Rockville, Maryland.
• 11:42
  Speaker B: Yeah.
• 11:43
  Speaker C: And it was a pretty, say, traditional, conventional suburban upbringing. In some ways, my life after growing up in Potomac was a reaction to the suburban life. I swore to myself that I wanted to live in a city in a more sort of dynamic environment. Not to take anything away from the environment my parents provided for us, which obviously very thankful for. But I was always drawn to cities. I mean, I remember being like, in the car train coming into a major city, whether it was New York or even D.C. and there was a certain amount of energy and excitement that I feel even as A young kid that this was different. And I think that those sort of early days really kind of drove me towards the interest in cities and building and placemaking. I had, I think, an intuitive sense of that. And there were a couple of sort of seminal experiences I had as a kid. As a teenager, I used to spend a lot of time in the Rockville Library, so the Rockville branch of the Montgomery County Library System. And there was a back room that you could pull things off the shelf and it was all Rockville, Montgomery county history related. And so, you know, there were like narratives and maps and photos and things like that. And I remember stumbling upon this information about how downtown Rockville used to have historic downtown. There were these photos of these, you know, sort of Georgetown looking retail buildings. And I never, I didn't know as a kid that that had even never existed. All I knew was that there was this big mall in dad that had been built in downtown. That was the thought. That was the way it always was. And it was very shocking to me that anyone would rip out these old, beautiful old buildings and drop in this. What you know, was arguably probably the day it was built.
• 13:46
  Speaker B: Monstrosity.
• 13:47
  Speaker C: Yeah, monstrosity. That the city had to deal with for instills. Dealing with.
• 13:51
  Speaker B: Well, I think most of it's been torn down now, I think, hasn't it?
• 13:55
  Speaker C: Most of it has. Most of it has. But I mean, I think, you know, they, they dealt with that for decades afterward. And it's. In reading the materials about this era, it was clear it was really only a handful of people that had made these decisions about demolishing downtown Rockville and building this mall. And so that was where I realized that it didn't take a lot of people to make either really bad decisions or potentially really good decisions about places.
• 14:26
  Speaker B: And one of my other podcast guests, Gwen Wright, was head of the Montgomery Historical Architectural Group and she brought that to the. To the fore and brought a lot forward. I don't know if you've ever met Gwen, but she's quite inspiring. Yeah, she loves the history of Montgomery county. So yeah, there's a lot to love.
• 14:48
  Speaker C: It's very.
• 14:49
  Speaker B: Exactly. So that inspired you.
• 14:52
  Speaker C: That was an. I just remember that being as kind of an eye opening moment. And then a little bit later, I was probably in my. Probably 16 or 17 years old, my mom knowing that I was interested in design and planning things in that realm, she had signed me up for my permission for a Smithsonian lecture series with a series of architects. So these were all held. Hosted downtown D.C. locations. Sure. And the one I remember the most was. Was a lecture by an architect, Andres Duani, who became associated with the New Urbanist or neo traditional design movement, which was the basis of the concept behind that was that we should rethink how we're planning and designing cities or new communities, new developments, moving away from sort of more sprawl oriented design to moving looking backward towards how cities and towns developed in a more compact, walkable environment. So he had done a. He was doing a presentation on what was. What was a new project for him called Seaside, which was down in Panhandle, Florida. And they had only built. Exactly. They only built a handful of homes and buildings in this project. But again, it was just very eye opening to me that you could sort of buck the trend and, you know, an area that would have almost certainly been developed with more sort of conventional, I'd say, suburban style waterfront development. They, Somebody, the owner of this land had made a conscious decision to do something different there, to basically build a town. And that just really fascinated me and really solidified my interest in urban planning and this idea that one people can do something different here locally.
• 16:52
  Speaker B: He inspired the Alfondre family in Montgomery county and they developed Kentlands, which is a new urban design built from the scratch community. And Art Pucillo, one of my other guests, talked about that project because he was involved in the land development of that and built the shopping center. And he was together with your former employer, Bob Young and Tob on that project as well. So there's. It's interesting. That was interesting evolution of that project.
• 17:23
  Speaker C: Yeah, that and Falls Grove was another project that. With Art on Werner.
• 17:28
  Speaker B: That's right, that's right. That was. That was Falls Grove. That's. That's right. That was the right project.
• 17:32
  Speaker C: I'm sorry it wasn't Ken Lyns, but Ken Lens is. I lived very close.
• 17:35
  Speaker B: An inspiration.
• 17:36
  Speaker C: Yeah, it was inspiration. There were several. There was Falls Grove, there was Kentlands and then. That's right, King Farm. That's right. And those. Those also. I would live very close to Kentlands when I was in development. I actually took probably thousands of photographs of the project when it was under construction. But so, you know, as I was growing up, I was solidifying this interest in urban planning and it became very clear that was the direction that I wanted to head.
• 18:07
  Speaker B: That's great. So then you went on to Cornell University, talk about that experience.
• 18:13
  Speaker C: Yeah. So as, as I mentioned, I was singularly focused on urban planning and I applied only to colleges that offered formal undergraduate programs. And I Cornell was the best school I got got into, certainly from a ranking perspective, but it was kind of funny anecdote there. I had somehow gotten an informational interview with the dean of the planning program at Cornell. And this was before I had even applied there. It was probably early in the year, that senior year of high school, and I went up there, I met with. His name was Dick Booth, and I spent an hour or two with him. And at the end of the conversation, he looked at me and he said, we had a really nice, engaging conversation. He looked at me, he said, you know, I really like you. I'm going to see to it that you get admitted. And, you know, it's like one of those stories you hear from like the 19, you know, 40s or 50s where, you know, two people meet on a train and, you know, that that allows that person to get admitted into, into college. But sure enough, I got the acceptance letter in the mail and I was off to Cornell.
• 19:26
  Speaker B: So the lesson learned there was, the.
• 19:28
  Speaker C: Lesson learned is, you know, you know, a, you know, follow your interest and be passionate about it and reach out to people. And people be afraid, don't be afraid. They can just say, no, we can't take an appointment, but. And then, you know, obviously, you know, take whatever opportunities are given to you to engage with the people that have say in making decisions about your life.
• 19:54
  Speaker B: Absolutely. So it was a good program. I have to assume that you enjoyed it.
• 19:59
  Speaker C: Yeah, it was a great program. It was the one thing I was surprised by. It was very theoretical based. It was kind of more academic. And so a lot of the professors that were there at the time were these like lions of the planning world, folks like John Forester and Pierre Clavel. I mean, these were guys that were very prolific writers about kind of social aspects of planning less than the kind of land user physical aspects. And so while it was fascinating and I learned a ton, I didn't get kind of the land use component that I was hoping to get out of the planning program. So I wound up taking a lot of courses in the hotel school there, which was where all of the real estate coursework was held at the time. They now, of course, have a very good undergraduate real estate program. So I learned a fair amount about real estate through the hotel school. And then the landscape architecture program had a lot of coursework on sort of urban design and kind of more physical planning.
• 21:11
  Speaker B: So that's where you did your drafting and your.
• 21:14
  Speaker C: Exactly. Kind of learned about the built environment through that. Right. So I was able to cobble Together, coursework that met my interests. Cool.
• 21:25
  Speaker B: Very cool. So you then went on into the industry, into urban planning. Talk about that and how that came about.
• 21:35
  Speaker C: Well, I tried right out of undergrad to go in, but it was 1992, which is one of the worst recession years in our lifetime. And so there were. No, there were not a lot of jobs. And so I knew I wanted to go on to grad school at some point, so I decided to just keep on going and got into University of North Carolina Chapel Hill's master's degree program in city planning. So went there for a couple years, and that was where that program was much more sort of land use oriented. And that was where I was able to satisfy those interests. And that was excellent program, excellent time there. We happened to win unc, won the national championship in basketball when I was there. So that was fun. I also met my now wife there. So achieved a lot of major accomplishments. Life goals. Exactly.
• 22:27
  Speaker B: That's fun. And Chapel Hill's beautiful place, too.
• 22:31
  Speaker C: Fantastic place to spend two years or any years of your life.
• 22:35
  Speaker B: Yes.
• 22:37
  Speaker C: So graduated from there in 1994 and wanted to go out and get a job in urban planning. This was my vision to eventually be a planning director of a major city or working somewhere in the planning field. And I interviewed for a number of jobs, ultimately wound up taking a job with a engineering firm in Boston called vhb. And what drew me to that, they had a small. It was a very large engineering firm. So most of the people that worked there were engineers, but they had a small group planning group that was led by a gentleman named Bob Kay, who. Our role was to coordinate the activities of all the engineering functions. So there was transportation engineers, civil engineers, environmental engineers, and so on some of these very large scale projects that tapped into each one of these engineering disciplines. Our role was to sort of be the air traffic controllers for these. All these engineering groups. And so we worked on projects there. There was, of course, the big project in Boston at the time called the Dig, which was the undergrounding of Interstate 93 through downtown Boston. And there were all these ancillary projects associated with that. So they were building the new Ted Williams Tunnel, which was the tunnel to Logan Airport. And then there were all the roads at the airport associated with that. So we worked on the road system for the airport and how it connected into the Ted Williams Tunnel. We also did a lot of the environmental impact statement work for that. So that was a big chunk of what we worked on, which was, what about the transit?
• 24:23
  Speaker B: Did you do the T Did you work on the T is all we.
• 24:26
  Speaker C: Did a little bit. And that just how it connected with, you know, it goes to Logan Airport.
• 24:31
  Speaker B: Right.
• 24:32
  Speaker C: So there was some coordination work that went along with that.
• 24:36
  Speaker B: That was the first rapid bus I've ever been on that silver I think they call it.
• 24:40
  Speaker C: Yeah, Yep, yep.
• 24:41
  Speaker B: That's kind of cool actually. I, I don't know why it wasn't made rail but they did a bus anyway. So you know the story there.
• 24:48
  Speaker C: Just out of curiosity, I don't or I don't recall a number of years. So we had that. We did a project in southern India. So the governor at the time, Bill Welded. Oh sure. He went on an Indian trade mission of India and came back with a project for us to help the southern state of Karnataka plan for design A basically an interstate highway between Bangalore and Mysore, two major cities in the south part of India. And along that interstate was going to be four new cities. And those the cities were going to be the selling of the real estate for those cities was going to help finance the construction of the, of the highway. So we, my team worked on planning for those cities along with obviously coordinating the execution of the highway as well. So my understand, I never went there. I still haven't been there. My understanding is the highway did get built, but I don't know what the state is of the cities that were planned along the highway route. But obviously very fascinating, interesting project. And then we worked with a number of smaller real estate companies. Particularly the one I remember the most was with aew, the big investment group in Boston. And they had just put under contract a office park outside Boston. They were buying from MetLife and they asked us to do a zoning analysis of what the development potential, redevelopment potential was of the office park. See if there was any unused density or how it might lay out. And so my boss gave me that product. It was sort of a bite sized, kind of good project for a relatively junior person to dive into. And I dove into that thing headfirst. I remember working really late hours just really perfecting it and had the opportunity to actually present it to the AEW executives that were working on the project. And they were just, I remember them being very impressed with the level of thought and effort that went into it. And that was I think the moment I can trace back to when I said to myself, you know, I want to be kind of on that side on their side of the table and more on in the real estate side of the business. Because I saw how decisions about investment can really shape what Winds up getting built and executed much more than planners probably can impact. The planners are doing very high level and working on the edges of what developers are proposing. I saw an opportunity to really have a more substantive impact on what can we get built.
• 27:44
  Speaker B: So did they look at feasibility? Is that really what the question was for you? You know, the density feasibility or the potential the site or what? What was the big question they were trying to answer that you answered for them?
• 27:59
  Speaker C: Yeah, they were buying this for the office buildings primarily. So, you know, the price they were paying was based on what the value of the office buildings was. And then. Yeah, this was in 1990 or 1996. So this was before, you know, there was a problem, as much of a problem as there is today in the office market. So I think they were pretty happy with what they were getting today. But they wanted to understand was there any potential future value that, that could be extracted from the site through potential redevelopment. So this was kind of a part of their just due diligence exercise and understanding what the potential of the, of the site was.
• 28:41
  Speaker B: So this motivated you towards real estate. So how did you take action then to get there?
• 28:46
  Speaker C: So, yeah, so I decided that that's. I really want to jump over to the real estate side, the private sector side. And you know, I really didn't have, other than a few courses I took at Cornell in the hotel school. I didn't have a lot of background. It was certainly running models and doing underwriting and analysis of real estate deals. But that didn't stop me. I didn't care. And I was young enough to, you know, I knew that, you know, you could still be trained. And so this was back before, you know, the online job search websites. You could go on to newspaper websites and search their classifieds. So these are the print classifieds that were converted into databases and you could search and I would just search for real estate and development on pretty much every east coast newspapers website. So probably sent out 100 plus resumes. And one day I got a call from gentleman who ran the Boston office for Toll Brothers. And he asked me, he said they'd gotten my resume down in Philadelphia, the headquarters for Toll. And they had. Philadelphia had asked him to reach out and interview me. So I went in for an interview and gentleman's name was Bill Gilligan. And he, I could tell the interview wasn't going great. I mean it was fine, but it wasn't, you know, we weren't clicking or he was sensing like I just really didn't have a lot of background that Might be relevant. And I felt like I needed to throw a Hail Mary. So at the very end of the conversation, I said, do you know what GIs? And of course GIS is Geographic Information Systems, which is the mapping of building map data. And he said, no, I have no idea what that is. And so I explained it to him and I explained how it might be able to. Might be helpful from acquisitions perspective. You can map out sites based on their zoning, based on their demographics, based on their size. And I could see his eyes just light up like, this was amazing. This could be an amazing tool. And I don't know for sure, but I believe that just that little bit of the conversation led to a second interview down in Philadelphia. And they flew me down there and they offered me the job, and I wound up moving to Philadelphia and that was my first real estate job.
• 31:18
  Speaker B: Did you introduce the firm to GIS then?
• 31:22
  Speaker C: I did. I got them to buy a copy of gis, which was sort of the consumer version of the. Of arkinfo's GIS system. And yeah, we used it.
• 31:34
  Speaker D: We used it.
• 31:34
  Speaker C: We used it in particular, what they wound up. I originally was working in the Philadelphia suburbs, but eventually they had me going to new markets for them. So it was like Chicago and Nashville and Detroit, Salt Lake City, places like that. And what was particularly useful for was going into places that, you know, we weren't really familiar with. It's one thing to map out suburbs of Philadelphia where they knew, yeah, every little parcel of dirt, but going to a new place and being able to kind of visually see where were the areas we should be focusing and the specific parcels we should be targeting. And yeah, I think it was very helpful tool for. For us to pursue new. New sites.
• 32:19
  Speaker B: So how did you learn about it? Was it that the engineering firm, they started using it or who taught you about it? Just out of curiosity, how did it. How did it. You get introduced to it?
• 32:28
  Speaker C: It started in planning school. Unc.
• 32:30
  Speaker B: Ah, unc. Okay.
• 32:32
  Speaker C: Yeah. This is where we first started to work with it. And then, yeah, when I got to vhb, they had it. They actually had a GIS team there. And so I was working. I was very interested in it as just the sort of subject matter. And so I got friendly with the GIS team. I was trying. Was doing a number of projects with them. So yeah, I've become quite familiar with the systems.
• 32:58
  Speaker B: That's great. That's a tool that obviously has exploded since then.
• 33:03
  Speaker C: Oh, yeah, yeah. Now it's like mainstream.
• 33:06
  Speaker B: Oh, absolutely. It's awesome. So you Were at Toll Brothers for how long?
• 33:11
  Speaker C: I was there for a couple years and learned a ton. That was where I really learned how to run a model. There was a guy named Paul Brucha. It was this grizzled old land guy. Taught me everything he knew about land acquisition, including how to underwrite dirt guys.
• 33:30
  Speaker B: They called him Dirt Guy.
• 33:31
  Speaker C: He was a good guy. Um, yep. And he took me under his wing. And so I was there for a couple years. But you know, I really wanted to get back to the Washington area and I really wanted to get into more urban oriented development. Of course Toll was doing more suburban track subdivisions. You know, they hadn't gotten quite into the urban stuff yet, but they were starting to dabble in it. They didn't have the whole kind of city living, you know, that was not. That was still years and years away. So I was ready to move on. And again answered. I'm probably one of the few people that a huge chunk of my career was built on just answering classified ads. But I think most people get their job through connections. But again, I answered a classified ad in the Washington Post and it was for a. I didn't know at a time, they didn't say where the job, who the job was with, but it wound up being a job with eya. And so at the time was called Aiken, Young and Taub Associates before they shortened it. And they wound up inviting me to come down to D.C. and interviewing with Terry Akin and Bob Young and some of the other folks. It was, it was. This was. So this was a 1998. The company was probably only maybe three years old. Three or four years old.
• 34:51
  Speaker B: So they were with the Holiday companies before that.
• 34:56
  Speaker C: Exactly. And they had had some success at Holiday building kind of early prototype urban infill high density townhouses. And I think Terry and Bob got together and said, you know what, we can do this on our own. And so they set up EYA and they were doing all of the acquisition and development work, the two of them alone. And I think they determined that they really needed some, some help.
• 35:22
  Speaker B: Yes. To listeners out there. I did an episode with Bob Young and Tom. So please listen to that.
• 35:28
  Speaker C: Yeah, it's a great story. Yeah. And so they, they hired me basically to be their right hand development acquisitions guy. 20, 28 year old kid. I'm sure I was appealing because I was relatively inexpensive at the time, but I had had the experience with Soul Brothers doing land acquisition and quick quickly became. Became fully ingrained there and learned.
• 35:56
  Speaker B: Are you looking at sites?
• 35:58
  Speaker C: Mostly I was, I Was I was chasing new, new sites and also working side by side with them on the entitlements, the design, somewhat the financing of the projects, although we did have sort of exclusive relationships on the. On the equity side there. And I just learned the two things I remember learning the most about there was, you know, Bob and Tob is a genius when it comes to design a product. And I would see him, he'd sit down. At the time, our architect was Chris Lassard. And the two of them would sit down for hours working through every little detail of a unit, moving walls, you know, an inch or two here you're just shifting things around. And they would go through dozens of iterations. And what it really just taught me was like, never. The thing we're selling in, especially in residential development, the product we're selling is the unit. It's the thing that the person is. Is buying or renting that they. That they're living in. And you want to perfect it. Like any product, if you're selling a refrigerator or, you know, whatever it is, you know, the people who are developing those products are constantly working to make and perfect them. And I think it gets lost a lot in our. In our. In our industry that just. That product, you know, they sort of leave a lot to the art, you know, just hand it over to the architects to just sort of do what they do, and then whatever they design is what we'll wind up building.
• 37:27
  Speaker B: But what they did, in my experience, and what I noticed, is that they were the first ones that kind of went into existing subdivisions in existing areas and carved out sites in ways that very few other were willing to take the risk doing to make it work. But they understood the economics well enough that they could spend the kind of money they had to to develop these sites. And they actually made money doing it because no one else was willing to do that. So they were kind of a pioneer in that infill townhouse development space. And I argue they probably still are the leading infill townhouse developer in the region. Wouldn't you argue that?
• 38:11
  Speaker C: Absolutely. I mean, they certainly were the only ones doing that kind of stuff back in the 90s. And they're one of only a few that are still doing it and doing it well. I mean, what they really did well, and what I think shocked a lot of people was the densities that they were building. Yes, townhouses. I mean, some of the projects we were building were 40 townhouses.
• 38:32
  Speaker D: So this was.
• 38:32
  Speaker C: These were these simple townhomes, 40 units to the acre. Yeah. And I Think most people just couldn't even fathom that people could live that densely and have it be livable. Right. And so by doing that and being very creative about the design, how they laid these projects out, they added a tremendous amount of value to the sites because most people were like, oh yeah, we can get max 10 or 15 units to the acre. And they were able to, you know, in some cases quadruple that density, which obviously delivers a lot more value to the land. So, you know, learned a ton from, from Bob on that and just, you know, how to run a business, a small growing business. And then Terry Aiken was just the master of make the. Making the deal. I mean, he just. The relationships, leveraging his relationships and the toolkit of little tricks he use. Trick is the wrong word. But little elements of, of contracts to sort of get help solve a seller's issue. You know, the seller would say, you know what? I just, I would love to do the deal with you, but I just, I need this one thing. Can you help me solve it? And Terry always had something he pulled out his toolkit was like, all right, we have the way to solve this for you in our contract. And nine times out of ten that did it. So I always just kind of kept a memory at database of those little tricks of the trade that Terry. I saw Terry use, and I still use many, most of those today. And I credit that with being able to make a lot of deals I have over the years.
• 40:11
  Speaker B: Well, I think urban development requires that because you're looking at different odd situations almost every infill project you look at, and it requires a unique perspective each time. There's no cookie cutter. It's not like, I hate to say it, but Toll Brothers, it's pretty much a cookie cutter business out there doing those greenfield development deals. You can basically lay the landscape almost identically every site, except you do have some undulation of the site. But normally it's relatively simple to do from the land development standpoint. But infill is. It's three dimensional and you have a.
• 40:53
  Speaker C: Lot more neighbors, you know, and certainly cities like that we were developing in like Alex, Old town Alexandria.
• 41:01
  Speaker B: Yes.
• 41:01
  Speaker C: D.C. and Silverstone, Maryland. You know, infill sites are scrutiny.
• 41:06
  Speaker B: Yeah, no question. Yeah. So then you went on to another infill developer talk about that experience.
• 41:14
  Speaker C: So when I was at eya, we did a project called the Bryan School, which was an old D.C. public school property on Capitol Hill. It had this historic school building and it had some land around. It was the parking lot and playground for the school that was completely abandoned, had been abandoned for, I think, 20 years. We got entitled on that site conversion of the school building to 20 condos and 38 townhouses on the surrounding land. And Bob and Terry was not our business to be doing adaptive reuse. That was just. We weren't really set up to do that. And so they said once we got the entitlements, they said, go out and find somebody for to buy the school building and we'll build the townhouses. So I went out to, you know, the cast of characters that were doing adaptive reuse at the time. You know, this is probably like early 2000s. And one of the major players at the time was a guy named Jim Abdo and who had gotten just a lot of notoriety and media attention for the work he was doing primarily in the 14th street corridor at the time, which was still sort of in its early stages of revitalization. And I remember I met him out on the site. We were walking through this old school building. It was a mess. You know, there's pigeons everywhere. And kind of had to see, see the vision. But, you know, I could sense he was excited about it. He's like, can we get up on the roof? And I had never been on the roof of this building. So we kind of figured out how to get up there. And once we got up there, I saw why he wanted to get up there. Because it had this unbelievable unobstructed 360 degree view in every direction, including, you know, dome of the Capitol and the Library of Congress, Washington Monument. And his eyes lit up. And I think at that point he had a vision of creating a rooftop deck up there. And he basically said, I want this building. So we wound up working on a deal and selling him the building. So for two or three years, he and I were working side by side. He was developing the. The condo building, the conversion, and I was doing the townhouse development. And we got to know each other pretty well. And both, I think, sort of got liked each other, liked working with each other. And so I reached out to him and I said, you know, are you. Are you ever interested in bringing in a partner or, you know, somebody to help support you? He was sort of one man, and he had, I think, maybe four or five people working for him, but he was the only one really doing development. And I said, you know, now that you say it, yeah, I think I could use a little help. And so we wound up joining forces. I left eya. I was at EYA for I think, six years. Left eya. And part of the reason I left EYA was I felt like we were running out of sites. It's like, how many townhouse development sites are there? We needed like three or four acres and I was worried we were going to run out of sites. Well, they proved me wrong because they've been doing it for now, 20 years since I left and haven't run out of sites.
• 44:31
  Speaker B: But they're creative.
• 44:32
  Speaker C: Yeah, exactly. But anyway, I jumped over to ABDO and was there for about seven years. And did you know some very iconic projects there, including Monroe Street Market, which was the project that basically created a retail main street for a Catholic university. We did some buy right multifamily deals in the Roslyn Ballston corridor, which nobody does buy. Right. Multi deals in Arlington that were very successful, called Worcester Mercer Lofts and Gaslight Square for Rent. Those were all for sale condos, all for sale. We were all pretty much for sale developers.
• 45:11
  Speaker B: That's interesting, the thread there, because you started with Toll Brothers and then to EYA and then abdo. All for sale. So you never really looked at rental projects in your career up until that point, right?
• 45:23
  Speaker C: Nope. No. And I really didn't know much about analyzing a rental deal. I knew For Sale and then did a project called Senate Square, which was one of the first.
• 45:35
  Speaker B: That's a gorgeous project.
• 45:36
  Speaker C: Yeah, thank you.
• 45:38
  Speaker B: Yeah.
• 45:38
  Speaker C: On H Street, which involved also conversion of a historic building and development of. Of new.
• 45:43
  Speaker B: A lot of history in that building.
• 45:45
  Speaker D: Yeah.
• 45:45
  Speaker C: Little Sisters of the Poor. And then the Capitol Children's Museum was in.
• 45:49
  Speaker B: That's right.
• 45:50
  Speaker C: For a number of years.
• 45:51
  Speaker B: The architecture there was pretty unique, spectacular.
• 45:55
  Speaker C: So I had an amazing run with Jim and I would, I always say, like, I probably would still be there. I'd like to think I would still be there if not for this little thing called the Great Financial crisis that kind of put the end to the great. Certainly the for sale housing run that we had. So that was, you know, in 2008 and I was in a position where I had to shift once again.
• 46:22
  Speaker B: So talk about that decision, what you just did after. After abdo.
• 46:27
  Speaker C: Yeah. So Jim and I, you know, we would talk and it was becoming clear that he really just wanted to finish up what we were working on at the time. So we wound up getting a partner in Busuto for the Monroe Street Market project and they wound up taking the lead moving that forward. They had Kenny Pritzker was their equity on that deal. And then we had a project, Gaslight Square that I mentioned earlier that was on Clarendon Boulevard in Arlington that we needed to kind of power through the. The finance, you know, the issues related to the financial crisis. But that I don't. We, I think both came to the conclusion that there probably wasn't going to be much more happening after that. And so my, my wife Jessica had some health issues and there was the financial crisis and unclear future with Abdo. And so we decided to get out of D.C. and to sort of cash in our chips and ride out the storm, not knowing how long it was going to last. And so we had this house we had renovated. It was this beautiful 1912 house in Chevy Chase, D.C. that had gotten some awards and was in Washingtonian magazine. So we knew we could sell it even though it was kind of a tough real estate market. And sure enough there was a lawyer couple bought the house, probably overpaid for it, but it was allowed us to kind of cash in and we had to figure out where we wanted to go. And so we decided to move to upstate New York into the Finger Lakes region to a little town called Skinny Atlas. And this was going to be. We had, we had been vacationing up there in the summers and really loved it. Just thought it would be a good place to kind of settle, settle down for a little bit, they said, and dried out the storm. And meanwhile I'd worked out a deal with Jim Abdo that I'd work 50% time for him, help him kind of close out the projects we were working on as long as he would let me use the other 50% of the time, start my own company. And I had an idea that had been brewing in my mind for some time, a business plan about building a company around prefabricated construction or modular construction and developing in college towns. Because I felt like college towns were places where there was still some economic drivers in the face of the financial crisis. And there was also tended not to be the wherewithal to do more complicated infill housing. So I set out to create, called the company Agora Development. And I tied up a site in Ithaca, New York, which of course where Cornell is. So I was familiar with that area and it was, it was. You could build I think like five or six houses on the site by. By right. And I wound up getting approval to build 29 houses. So sort of following the EYA model of densifying the site. So I had approval to build 19 single family modular homes and tiffy simple modular townhouses and got the project acquired the site, got it financed, worked out some creative financing with the modular Factories where they were carrying the costs of the construction until we closed on the homes with the buyers, the individual buyers. So I didn't have to finance the actual construction of the homes, just the acquisition of the land and the infrastructure, the site work, and it did okay. And we still were fighting against the background issues of the financial crisis in terms of just the market demand for for sale housing. But it certainly proved out the concept that it was a viable business model. And so I had another site I tied up in Northampton, Massachusetts, and I was ready to just like proliferate this thing, you know, all up and down the east coast. I had a portfolio of pre designed, modular friendly homes that I had had an architect engaged an architect to design for me. They were proprietary plans that only I could use. So I had sort of all the pieces were ready to go to scale on. And that was when I got the call from Vernado to come back, potentially come back to D.C. and help them start up a multifamily development platform there, which they did not have. Everything they were working on was primarily office development. They needed somebody who understood multifamily. Excuse me, I'm going to take a quick drink of water here.
• 51:16
  Speaker B: So talk about that decision. That had to have been tough because here you are, you're an entrepreneur, you're doing well, you're selling these units and you have this design, you built this infrastructure that you're excited about, I have to assume, and you get this call. So what made you say, you know, maybe we should go back?
• 51:40
  Speaker C: So what made the hardest decision of my life? I labored. Oh man, I labored. I labored over it. And for all the reasons you just described, I had put blood, sweat and tears, my own money. I mean, it was just so much invested in this thing. And I saw your ego too, right? Yeah, for sure. And I just, I don't know, I guess I sort of. It was this inflection point. I was like, all right, I can try to flog this thing out. It wasn't like I was just on that. I wasn't just on the cusp of becoming wildly successful. I saw a long road of having to kind of build this thing out and get to a place where it was sure, you know, sort of self sustaining. And I think I just decided that I needed something a little more stable, a little more certain, I guess probably the better word. And because if it had been just any development job where maybe I was stepping into an existing multifamily platform, somebody had left and I was replacing somebody. And There was already a team there. I think it would have been a lot less appealing. It was the fact that it was still very, felt very entrepreneurial. I could pick my own, hire my own people and sort of create my own culture in a way, kind of like what I was hoping and planning to do with my own company. So there were still some aspects of it that were comparable to starting your own company. And I didn't have to worry about where the next dollar was coming from. Obviously deep pocketed.
• 53:22
  Speaker B: This was, this was your biggest leap though, into for rent housing, right?
• 53:27
  Speaker C: Yes.
• 53:28
  Speaker B: Yeah. So that's, that's, that's a big change.
• 53:31
  Speaker C: Yeah, it was, it was daunting because I had a really, you know. Well, it's. By that point I certainly, I mean, we had done the Monroe Street Market project at Abdo, which notwithstanding the fact, you know, what I said earlier, that we mostly did a condo, that project was rental that we had with Busito. So I had learned a fair amount. Enough to be dangerous or enough to be semi confident in my skills. So, so I got to, you know, I did make that decision, made the leap. It was a difficult decision and, and wound up, you know, putting together just a really amazing team, all of which I'm still, you know, the people I hired are all people that I'm still close to and stay, stay in close touch with, including, I don't know if, you know Jason Fuden, he started Y Hotel.
• 54:19
  Speaker B: Yes, I bet Jason, his partner, was a mentee of mine.
• 54:24
  Speaker C: Yeah, Bow. Yeah, yeah. Jason worked for me on that team and he used one of our projects, the Bartlett, which was a big 700 unit multifamily project in Pentagon City. Right, sure. The beta test site.
• 54:39
  Speaker B: So that was their first deal.
• 54:40
  Speaker C: Y Hotel. Yeah, yeah. That's where they stood up the Y Hotel concept before breaking off on their own. So we did a number of projects there. I mean, what, what also appealed to me to that for that opportunity was Vornado already controlled the development sites that we were going to build out. They owned all of Met park, which wound up becoming the Amazon HQ2 site for JBG and then pen Place, which was also became part of the HQ2 site. These were all multi, multifamily development sites that were just sort of laid out in front of us. Like I had thought I had years, if not decades of development pipeline to work. And so I was there for, for five years. And again, it was a, it was just a really great run and worked with just some amazing people. And we started getting rumors about the Potential JBG merger, which, you know, found out later, had already been discussed probably two or three years earlier from that. And I was actually asked to participate in terms of helping underwrite some of the deal, some of the sites that JBG was contributing into this new partnership.
• 55:54
  Speaker B: Yep.
• 55:55
  Speaker C: And so it was becoming quite obvious that where this was heading and that, you know, JBG was more known, better known for their development team than Vornado was. They were kind of more of an operating platform. And so it was clear, you know, JBG was going to be the top dog when it came to the development.
• 56:16
  Speaker B: Especially on the residential side. I mean, Barnado, of course, had a long history in the office sector, of course, so.
• 56:23
  Speaker C: Yep, yep.
• 56:24
  Speaker B: With Charles E. Smith companies, so.
• 56:26
  Speaker C: Exactly. And, you know, the residential components of Charles E. Smith had already been spun out to Archdeam.
• 56:32
  Speaker B: Right, right.
• 56:32
  Speaker C: So we were kind of rebuilding something that had previously existed within the Charles E. Smith organization. So I started to, you know, this, this is probably, you know, four and a half years into the Vornado situation and I realized I was going to need to probably find something else, sadly, because again, we just had this great. We'd even branded our little team as the, as the residential studio, just to kind of give it a little cachet. But, you know, so I. That was when I connected with, with Martin. Ditto. That was my next opportunity.
• 57:07
  Speaker B: That's when we met.
• 57:09
  Speaker C: That's right. So what Martin. Martin and I started to talk and it became clear for those listening, Martin was and is, was another visionary, kind of, you know, along the lines of, you know, they're obviously very different people, but more like a. Like a Jim Abdo in the sense of a small development company doing really interesting kind of design forward projects in dc. And part because of that, it was. He was a very compelling figure to me because I'd already kind of been through the Abdo experience and enjoyed that. And so we got to talking and it became clear that, you know, there was an opportunity for us to work together. You know, Martin had very amazing vision for what living in the 21st century could be like. And I was kind of oriented to create, turning, converting vision into a business plan, converting it into reality. And we wound up working up a deal to join forces and partner up together to advance the company.
• 58:20
  Speaker B: So how did that do? So how many deals did you work on and what all happened there?
• 58:26
  Speaker C: We did a couple of deals and, you know, I think it became clear that we were just sort of headed in different directions in terms of where we wanted to go. And again this was not. There was no animosity or you know, just two people sort of with different goals and it was. His name was on the door and you know, so I deferred to him. I wasn't going to try to challenge where he wanted to take things. And I think we just kind of came to the mutual conclusion that it just wasn't a good fit. And so I wound up at that point Brookfield had become known that Brookfield was in the process of acquiring Forest City and not only their operating assets but their development pipeline in D.C. and I thought that looked like, you know, another good opportunity to join up with an or deep pocketed organization that had a kind of built in development pipeline that I could help execute. So I knew some folks at Brookfield and was able to get in front of, you know, the folks making the hiring decisions. And as soon as the deal closed on the Forest City acquisition, they made me an offer and I wound up moving over there to ultimately run the development platform for Brookfield in the Mid Atlantic and then eventually the entire southeast of Mid Atlantic and Southeast were in my purview there.
• 59:58
  Speaker B: Did you succeed Debbie, Debbie Ratner, Salzburg basically in that role or were you kind of working hand in hand with her?
• 1:00:06
  Speaker C: I was working hand in hand. She had, you know, she was head of, of Forest City in Washington. So she had a much more sort of. It wasn't just the development role. She was.
• 1:00:16
  Speaker B: Broader role.
• 1:00:17
  Speaker C: Yeah, I mean she was the. She was the CEO effectively of. I don't know what her exact title was but I mean she was effectively the head of the whole office. So I wouldn't say I replaced her but worked closely with her. She had some overlap in terms of when I joined she was still there and got to know her through that and learn a tremendous amount about projects like the Yards, the history of that and how they had acquired that and with the vision for that for that was. And you know that was probably the Yards. The development of the Yards was my primary focus because that was the most active development deal we were working on. So we built the. The office building in the Yards for Commonix which is international development organization that relocated their headquarters to. That was a 300,000 square foot office building. We also built another multifamily building called Vila which is finishing up lease up now. And then we did a deal with a group called Irby to build micro units in a 450, 460 unit multifamily deal project that's finishing construction right now and then we were also leading efforts to redevelop a site next to HQ2 in Pentagon City, and then also a site called Haley Rise, which was a 3 million square foot development master plan development out in Reston. So had a number of simultaneously active projects.
• 1:01:49
  Speaker B: One of my mentees, more creative guys that I've ever mentored, Jason Binet, was working for a city at the time when I was. This is before the Brookfield acquisition. He stayed on through the transition and then moved to California, I think, after that merger took place, but apparently came back. So I guess you worked together with Jason for a while.
• 1:02:14
  Speaker C: I did, yeah. He was. He wound up moving back to New York City. And he. And he was focused on. Oddly, even though he was in New York, he was focused primarily on stuff down in the Southeast. A lot of mall redevelopments that were associated with the GGP acquisition. And among other things, I mean, he was doing a lot. So I got to work. I got to know him, got to work very closely with him, probably that last year or so that I was. Was at Brookfield and really enjoyed working with him. He's. He's a great, great person. Very smart, smart developer.
• 1:02:48
  Speaker B: He told me your favorite shape was octagon. So he mentioned that to me, which I thought was funny. I don't know where that context was, but what's the context of that story?
• 1:03:00
  Speaker C: Well, there's a room that. So when Covid hit and I was working out of working from home for six plus months, like all of us, my office was in a bedroom in our house. And the shape of the bedroom is an octagon.
• 1:03:18
  Speaker B: An octagon.
• 1:03:18
  Speaker C: Oh, wow. Everybody would always comment on that. Toby. Oh, Toby's in the octagon room again.
• 1:03:26
  Speaker B: That's great. So obviously you made a change after that because that's where you are now here. What at the time was Perseus, now Trans Western, So talk about that transition.
• 1:03:40
  Speaker C: So unbeknownst to me, I mean, you can kind of get a picture of my career here, that there were kind of series of stops, most of which were unpredictable or were not predicted. And so I'm here at Brookfield. I've been there for about four years. And it became clear that Brookfield is really a giant finance machine. We were working for a fund, essentially, and they have the opportunity to invest in anything. And they buy ports and railroads and solar farms and hydroelectric plants. And development was not the highest yielding asset in their asset class in their portfolio. And so it's becoming clear that their investments were starting to get steered more towards Other types of, even within real estate, they were buying more operating assets, moving somewhat away from development. I just decided, you know, I, I like to build, right? I mean, that's why I'm in this business. And so I didn't want to sit around and wait for years just to get an opportunity to build something. And so I decided it was, it was time to probably move on to, to next step and learned about this opportunity with Transwestern and Transwestern, just to give you like a quick primer. So there's a Transwestern family of companies and there's four companies within that. There's real estate services, which is the brokerage and property management, those kinds of functions. There's tig, which is the investment group. So they raise capital, invest into real estate. There's the hospitality group, obviously hotels, and then there's tdc, Transwestern Development Company. So that's the platform that I work for. And the president of TDC is gentleman named Carlton Reiser, who's based in Houston. So interviewed with Carlton and it quickly, you know, I didn't know much I knew of Transwestern because I knew they were a real estate Services Group in D.C. but it was not that familiar with the development platform. And it became clear that this was a really a unique opportunity to work for a company that was privately held and was still run by, you know, the original founders of the larger Transwestern company and was a nice hybrid where I had worked for large institutional companies that were rather bureaucratic organizations just by their nature. I've worked for a number of small entrepreneurial organizations, including my own company, that were very financially lean, but fun and entrepreneurial. And I think TDC offered this opportunity of somewhat of a hybrid. The local office, local offices are run very entrepreneurially by the leaders of those offices. And we sort of think of ourselves as a small local entrepreneurial group chasing deals and executing on those projects. But we're backed by a large, deep pocketed institution not only to help sort of post deposits and fund entitlement costs, but HR and accounting and all those functions that can be somewhat mind through.
• 1:07:04
  Speaker B: What was interesting about your change there though, compared to your situation going to Barnado, was you had a culture already built by your, your predecessor who actually had a company that was acquired by Trans Transwester Development.
• 1:07:19
  Speaker D: That's right.
• 1:07:20
  Speaker B: One of my former podcast guests, Bob Cohen. So talk about the cultural, you know, shift and you know, why Bob, you know, who had built Perseus back in probably the early 2000s when he first Started it into the organization he had when he decided to bring Transwestern in as a partner at the time before the transition to the firm. Talk about that history a little bit.
• 1:07:44
  Speaker C: Yeah, so I don't know all the reasons why Bob connected with Transwestern. I know sort of the chronological history of it. That 2017, they. Transwestern wound up becoming his investor, funded some the projects that were underway at that time. And then by 2020 they had fully acquired the Perseus entity, the platform that Bob had created. And then so the company name at that time, it was rebranded as Perseus tdc, which I don't think. I think many people didn't even know what that TDC was. But of course it was Transwestern Development Company Company most people thought a lot of it is Percy, it's Bob Cohen's company. And they were quite active in the development space at the time. And then I think at some point Bob decided or there was this understanding that Bob was going to retire. And that was around the time that I came into the picture. So it was important for Bob to meet me as effectively his successor. Nobody can succeed Bob. I don't want to give the impression I was just stepping into Bob's shoes, but you know, the person who was going to be day to day running the operation and I had a couple of really good conversations with. I had met him a few times over the years. I already knew him a little bit, but you know, I had a real opportunity to meet him and understand the history of the organization and culture. And I think we both agreed there was a really good fit there. And then of course, I was also speaking with the folks in Houston, the Transwestern leadership, including Robert Duncan, who's the chairman and Larry Heard, the CEO. These are all people that I interact with today. And again, what I loved about it was what Bob had created. There was just this sort of sense of almost like a family, you know, it was a. It was a. It was a very casual, informal group almost, you know, more like what I had experienced with Abdo and Ditto and those organizations. And I like that. I was drawn to that. And so Bob stayed on for a few more months after I joined in April of 23 and we wound on. What Bob did ultimately retire, which was obvious, which was planned, we decided, you know, we really need to. It was a lot of confusion in the market about what was Perseus, what was tdc, what was the relationship. So it was somewhat sad because, you know, Perseus had this long history, but we did decide ultimately to remove the Perseus name from, from the company and just kind of lean into Transwestern Development company and go into a full education program because most people in Washington thought of Transwestern as the brokerage and property management services. So we needed to make sure folks understood that TD Transwestern was also a full blown standalone development company. And I think we've been pretty successful in educating.
• 1:10:58
  Speaker B: Were you the last holdout of the Transwestern Development divisions with a name that was not Transwestern at the time or were there other.
• 1:11:07
  Speaker C: I think we were the only one that had. The only one at all. Everywhere else they had kind of set up so it was de novo and.
• 1:11:14
  Speaker B: Other markets, not JVs. Like this was. Okay.
• 1:11:18
  Speaker C: Yeah, exactly.
• 1:11:18
  Speaker B: Interesting.
• 1:11:20
  Speaker C: Yeah.
• 1:11:21
  Speaker B: Well, I think you're. It's interesting observing from an outsider's viewpoint, you're in a unique situation where you've got, as you said, kind of a family culture, but you also have the backing of a very large national organization that has a robust reputation and capital sources. So you have a. Unlike your prior entrepreneurial situations, you now have a backbone that you didn't have before to get deals done. Right?
• 1:11:50
  Speaker C: Indeed. Yeah. I think we can tell a really good story about where this locally based group, the people are all from dc. These aren't folks that got shipped in from Texas to try to set up, you know, a DC operation. We're DC based folks. Our offices are at 20th and K downtown and we know the market extremely well. But you know, we have access to these, to these resources to access relationships with the capital markets. And you know, right now in particular, you know, being able to demonstrate that you can, you have the wherewithal and the resources to close on a site. I mean, that's probably what the number one question brokers ask us when we've submitted an offer. Where's your capital coming from? And I would imagine it's a lot harder for a local shop to make the case that they have the capital just available to them, that they're not going to have to go out and try to shop it around to get it. And in this day and age right now, everyone knows that's a little bit of a challenge. Whereas I think.
• 1:12:55
  Speaker B: Let's pivot to that for a moment. Why don't we pivot to financing? So let's say you get control of a site, it could be an existing building or a ground up situation. So what is your process in trying to capitalize that?
• 1:13:10
  Speaker C: So I mean, we have a group of LP equity Partners that we have done a lot of deals with, we have relationships with, including our own in house. You have Transwestern investment group. TIG is a non exclusive equity source of equity for us. We talk to them on every deal. They don't do every deal, but we talk to them about every deal. And our capital markets. We have a TDC Capital Markets team that's based in Houston. These are not brokers per se. These are sort of business development or managers of our capital markets relationships. We also do have access, of course, to the Transwestern capital markets brokers who we use on some projects and we also use some third parties depending on the situation. And again, we just have, I think, a credibility in the market. And because, you know, I think we're perceived as being a kinder, gentler group, folks like to work with us. I think we're easy, relatively easy to work with. And I'm learning more and more about all these long time relationships that have been developed over years, if not decades that I'm able to get the benefit of for our local DC projects. And so I'd say again, nothing's easy right now. I'm not going to say that. We just make a call and all of a sudden the money just shows up. You have to work for it. But it's a lot easier than going out into the wilderness without any sort of relationships or limited track record.
• 1:14:54
  Speaker B: So talk some of your recently completed projects perhaps first and then talk about some upcoming opportunities that you're looking at right now.
• 1:15:04
  Speaker C: So we've, we have some great stuff in the pipeline, both finishing up and also into the future. But two projects that are under construction or finishing, just finished up construction. One is called the six, which is a stick wrap deal, meaning it's a wood frame building wrapped around a precast garage. It's in Hyattsville, Maryland. It's about 300 units and it's in an opportunity zone. So we have an opportunity zone partner, equity partner on that particular deal. And that's leasing up right now. And it's going very, very well.
• 1:15:39
  Speaker B: The market's good there.
• 1:15:41
  Speaker C: Very good. Yeah. It kind of came to us that neighborhood all of a sudden there were some name chefs that started opening restaurants literally, you know, across the street. So that always helps to kind of put you, put you on the map. Folks are already going there for nightlife. And then we have a project called Capitol rose, which is 15th and S streets downtown D.C. this is a deal that was, this was struck before my time. But it's finishing construction now. It's 158 units. It's a ground lease on land owned by the Scottish Rite Temple. Really complicated deal. It's an historic district. It went through, you know, my understanding, I again wasn't there, but went through very challenging entitlement process as you might expect. But it's leasing up very, very well and getting very strong rents, as you might expect in the location. Like they had low Logan Circle, Dupont Circle neighborhood. And then looking forward, we have a, we've really leaned into and believe in office to resi conversions. So we have a project at 1133 19th Street. So this is between L and M right in downtown D.C. this is the old MCI headquarters building. And this particular building lends itself very well to a conversion. It's a relative relatively small floor plate. It has the ability to have windows on three of the four sides of the building. It's not post tension construction. It checks a lot of the boxes you're looking for for these conversions. And we're finishing up our DD drawings there and expecting to start construction in the latter half of next year. On the other end of the spectrum, the other types of deals that seem to be working right now, we hope that there are more deals will become more viable as interest rates come in and construction costs flatten a little bit. But the other type of deal that's working are surface park garden apartment deals out in the suburbs. So we have a site out on Richmond highway near Fort Belvoir that's going to be about 250 units that serves that, that niche and those deals, the downtown conversion deals work because you're able to get, you know, the rents necessary to make the economics work. The suburban stick built deals work because your cost basis is low enough to work within obviously somewhat lower rent structure that you're getting out in those locations.
• 1:18:17
  Speaker B: So how are you manning those projects? So talk about your team a little bit.
• 1:18:22
  Speaker C: Yeah, so we have, and it's typical for a development team, it's a relatively small team, there's seven of us. And my formula I've been able to develop over the years is that one development manager can handle two, maybe three projects in any sort of stage of development. So you could have, you know, that one person could have one project under construction, one project entitlements or two projects in construction, whatever, some combination. And so right now with the five or so projects that we have various stages of development, the team is right sized. We're about where we should be. We have two development professionals, we have an analyst head of Construction, myself and an office manager. That's all we need. Eventually, as we add to the pipeline, and we'd like to at least double our pipeline, we will add more people to help staff the execution of those projects.
• 1:19:26
  Speaker B: What's interesting is you're not vertically integrated per se within ttc. You're kind of horizontally integrated with your company, Transwestern. So for instance, you don't have a property management division for multifamily at least, but you do for commercial properties. And so it sounds like you're focused mostly on residential right now, though. So you're not looking at commercial deals at this point.
• 1:19:53
  Speaker C: Yeah, I mean, we're capable of doing office or hospitality. We do have another division of TDC that strictly focuses on logistics, warehouses, industrial. We do not. My team does not execute on those types of projects. There's another group in New Jersey that does the east coast work for that. And so that's a pretty active group, as you might expect. But yeah, right now my team is almost entirely focused on a multi family.
• 1:20:23
  Speaker B: Well, that's interesting. I think, about the various stages of development. I mean, if you had two projects in entitlement, that might be. That'd be hard. Especially in this environment when you're looking at mostly conversion situations, there just aren't that many ground sites that you're looking at today. That's complex because you've got to analyze the physical what's there and then all the entitlement issues. Certainly in the District of Columbia, that's mammoth with not only dealing with the planning agencies, the government, but all the neighborhood people and having to convince people that, you know, residential use for office, former office use, is a little bit, you know, there. But I think Your site on 19th, which is interesting, is very close to residential development and interest. So, I mean, you're right. N Street is all residential up there. So Ann. And then north is pretty much residential in that part of the city. So you're really at the edge of the cbd where you are physically your office. That would be, to me, a little more challenging to be right in the heart of the district to build residential. But I guess there are examples happening right now.
• 1:21:45
  Speaker C: There are. I mean, I think each site, you know, this is, you know, again, tapping into my planning background. There you go. And frankly, you know, even like folks like Jim Abdo, you know, who. What I learned from him, or one of the many things I learned from him was just how to kind of tell a story about a site created. Not tell a story, but create a story about a Site. And you know, every site I look at I feel like has some story to tell. That 19th street site, I think the story is it happens to be on one of the most active, vibrant retail streets in the downtown. You know, got the Palm and you have the AC Hotel which has a very vibrant ground floor bar. You know, there's a number of other restaurants up and down that corridor and down Hemp street as well. So there's already enough there that I think from a, from a multifamily demand standpoint there's not much you need to do to convince folks that this is a viable neighborhood. But yeah, if we were looking at, and we are looking at sites in other parts of the downtown that are maybe a little more challenged from trying to sell, tell this, tell a selly story that this is a neighborhood. And so one thing we are looking at is I think at some point once the sort of easy buildings are picked off, the easy conversions, we're going to be left with a lot of buildings that are going to be a lot more challenged, a lot more difficult to convert, both because of the location and just the physical aspects of the buildings themselves. And so I think there's going to be, there's going to need to be more wholesale redevelopment. Not just one building here, one building there. So assemblies, some form of assemblage with city support to make those happen. And I know we, we are starting to look at stuff like that. I know others are, I certainly the city is eager to see, they think they've come to the, the recognition that, you know, we can't do decades of just piecemeal conversion here. We need, at some point we're going to need to do something more holistic.
• 1:23:50
  Speaker B: So in seeking a project for development, what characteristics are you seeking? Talk about your evaluation of a site and or existing building. Of course cost basis is critical. However, the capital markets tend to govern feasibility most often. Any other considerations like government incentives for instance that help you?
• 1:24:10
  Speaker C: Yeah, I mean we're completely opportunistic. So we don't have like a food group of project type that we're focused on other than we know what one seem to be working the best right now. And those are the two that I just mentioned, the downtown conversions and the suburban stick built. And so we tend to focus on those deals just because we know there's a higher probability they're likely going to work. And everything goes into the model. Right. So you have all these assumptions, cost assumptions, revenue assumptions, incentives, taxes, you name it, it's all going in there. And it's all feeding and creating, generating an NOI net operating income. And we have to hit a certain yield and certain IRR internal rate of return to make the projects, to know that the projects are going to be finance. The capital markets have made it clear to us what metrics they need to see to be projects that they'd be even willing to look at. So it is heavily driven by the capital markets and just by the interplay of assumptions that go into our underwriting.
• 1:25:24
  Speaker B: But it's a dance and oftentimes you can get people to lean in if they believe in something thing.
• 1:25:31
  Speaker C: Yes.
• 1:25:32
  Speaker B: So that's, you know, you can put all the pro formas together and I haven't found a pro forma yet that's actually met its, its pro. Its projections in my entire career. If you show me one that you've done that actually met your projections all the way, I'd love to see it.
• 1:25:50
  Speaker A: Because it would be unique.
• 1:25:52
  Speaker B: So the idea is convincing the capital market folks that this is a project that's going to be viable and you'd like to bet on that. So I guess my, my gut sense is what to you makes a deal work and not work from that standpoint, even, you know, all the numbers come in. What does the gut sense to you? What makes sense to you to develop?
• 1:26:17
  Speaker C: I mean, to me I'm always looking for sense that there's upside, that there's a greater likelihood that it's going to do better than what we've modeled, then it's going to do worse. And I look to projects like when I was at eya, we did a project called Harrison Square, which was this entire city block. It was 13th and V in the Logan Circle just off 14th Street. And it was a rough, really rough neighborhood in the late 1990s when we were doing that project. But I intuitively had a sense and again I probably tapped into my urban planning just intuition that the, the develop that the, that the development was coming to that location and that we were going to be. While we were on the frontier, by the time we were under construction, you had gotten through the entitlement process and we were actually putting houses up. The market will have come to us. And that's just sort of some ways reading the tea leaves or just kind of watching where development is pushing from. So I felt like, you know, we were, we had managed the risk on that deal so that we knew that we were. Our downside risk was protected, but that we had tremendous upside risk there which was realized. The project wound up Doing way better than we had modeled. And it wound up being a really important project for were the redevelopment of D.C. because it became kind of a thing that leaders, government officials and the development community pointed to and said, oh wow, those guys did really well there. We should be looking for more sites. And so with these conversions and again really any site, I'm thinking about it like what's the potential for this thing Overperforming? And I will, I think you're just talking about it right now. It's making me realize that I tend to sort of gravitate toward the sites that I think probably have a higher potential for overperforming. And I do think these conversions, as the downtown redevelops and more and more of these conversions get done and more and more people are living downtown and it becomes more and more acceptable, I think people will look back and say, oh, that was a no brainer. Of course these conversions made a lot of sense. And you know, I think that's going to probably be the case when we get to that point in time.
• 1:28:45
  Speaker B: So Toby, tell me about your business being evolving due to several factors including work from home, amenity wars, the capital markets, the affordability housing crisis, among others. Describe some of the innovations that you believe had the greatest impact in both developing and operating properties. What, what is happening today that most has the most impact on the current business in your mind?
• 1:29:12
  Speaker D: Well, I mean the beauty of, and probably the curse of development is there are so many moving pieces to everything that we're taking into account. You know, I think on the affordability side this has obviously become, this is a bubbled up is probably the biggest issue that's facing our industry in terms of being part of the solution. I think that's why you're seeing a lot more projects right now getting financed with various forms of tax credits or public subsidy. And you know, I think we certainly will be looking at more financing avenues for those kinds of projects. I think one thing that's interesting about development and construction in particular is how slow the uptake is with new technology. We're sort of, I think behind as an industry in terms of we talked a little bit about modular and prefab, you know, that's been sort of slow to get adopted or find opportunities to use that. I do think there are from a technological technology perspective. There's been some programs like bim, which is I think Building Information Management, I believe, where you're able to see buildings in three dimensions instead of just, you know, two dimensional piece of paper and be able to see the conflicts between H VAC and structural elements. That's been a huge innovation that saved a lot of time and money and headaches. I think we just starting to see some of the early impacts of AI, especially as it relates to leasing properties up and the interface between the consumer and the property. Where we're probably taking a little bit of a step backwards is with LRO and these dynamic pricing systems where there's a feeling of belief, I guess by some that the. As a form of collusion and there's some pushback on those. So we're having, you know, to kind of go back to the, to the old ways of just comping properties, you know, manually. So it's a little bit of two steps forward, one step back in some cases. But at the end of the day, you know, I think in any terms of making a project viable and financeable, you know, you have. There's. It's a dynamic situation, you know, either rents are strong and your. And your costs are high. Sometimes your rents are a little bit depressed, but often those are situations where your hard costs are a little bit lower. So it's just sort of understanding what, you know, in this slice of time, what inputs are allowing for your projects to go forward or frankly not go forward.
• 1:32:01
  Speaker B: What's interesting is what's current today is not what's two to three years from now when we're delivering. So how do you be prescient enough to understand what the market demand is going to be like two to three years from now? Offline? We talked a little bit about this new software product called Rockerbox, which they look at predictive analytics and they use the research techniques with certain tenant bases out there to understand what are the amenities people want to want, what will they want in the future, what are what seems to be the trends to try to stay ahead of that in predicting it, and whether, you know, the.
• 1:32:43
  Speaker A: Market can stand the amount of amenities.
• 1:32:45
  Speaker B: It has or if it needs it to get it and what get granularly into that. So that might be a product that certainly would help from a development standpoint.
• 1:32:56
  Speaker D: Yeah, no, I'm really interested in learning more about that because we do feel like we're always in a position where we're trying to predict, you know, what the market wants. We're also, you know, I think it's discussing earlier, you're sort of trying to predict where development is going, you know, just physically, geographically, in the city or even regionally.
• 1:33:14
  Speaker B: Yes.
• 1:33:14
  Speaker D: And, you know, a lot of that is just instinct. Right. You're Sort of you're extrapolating trends. Like if you see, you know, for many years the DC was getting redeveloped.
• 1:33:25
  Speaker C: From west to east.
• 1:33:26
  Speaker D: So it didn't take, it wasn't rocket science. Realized that if you're even developing sort of three blocks east of the line where development had happened, you know, it was probably going to come to you eventually. But I think, you know, to your point, the sort of market trends or consumer preferences, those are a lot harder to predict. You could be building amenities, you know, the sort of the, like the kind of best example are like theater rooms in apartment. That was the rage.
• 1:34:00
  Speaker C: Right.
• 1:34:00
  Speaker D: Everybody had a theater room. Nobody's building theater rooms anymore because the market has kind of moved past that. But there was probably a period of time when people still were develop delivering theater rooms because they were designed and planned five years earlier. Earlier. So even though the market didn't want that anymore.
• 1:34:15
  Speaker B: Well, the pandemic changed a lot of the market situation obviously. And so I interviewed Toby Buzzuto and I asked him. So you know, he said yes, we have people staying in their homes much longer than they ever did before.
• 1:34:29
  Speaker D: Yeah.
• 1:34:30
  Speaker B: So you've got different utility needs. You've got different needs for common amenities. You need people. People may want to get out of their small apartment and go down and share the common areas, but not necessarily leave the building.
• 1:34:43
  Speaker C: Right.
• 1:34:43
  Speaker B: Be there. So you in essence have different uses within your space.
• 1:34:49
  Speaker D: Yeah, I mean co working in apartment buildings now is a big thing. Big thing. It's very important to set aside. I mean for many years you didn't really have set aside quote co working areas. You just sort of had lobby spaces, lounges and people were sort of setting up a conference room. Rooms that people were taking over for their personal offices. Now in a project I delivered recently or was delivered that I helped, I was involved with for, for Brookfield, there were quite a few small set aside offices that you could close the door and it was just a desk and you know, a space with WI fi that you could sit in all day and do work. So more and more of those are becoming prerequisites for part of your amenity package.
• 1:35:31
  Speaker B: Yeah. So anything that you've seen that really is unusual or mostly just common trend at this point.
• 1:35:41
  Speaker D: Yeah, I mean as you sort of, I think said before, I mean it's. There has been, we've gone through a period of amenity wars. I think there is a pulling back in some ways of things that have become clear aren't necessary.
• 1:35:53
  Speaker A: Interesting.
• 1:35:53
  Speaker D: I mean I've toured a number of buildings now in the market that don't have pools.
• 1:35:58
  Speaker B: Yeah.
• 1:35:59
  Speaker D: Which seemed, you know, nobody thought you could deliver a 300 plus unit building without a pool. I mean, to me it makes sense why a pool isn't necessarily at the top of everyone's list of something they absolutely need. So you know, I think there's some trial and error in terms of what the market is showing it wants. But also pool of things like that are very, very expensive to deliver. If you're not getting ROI on it, why are you providing it?
• 1:36:26
  Speaker B: So the other angle I wanted to go after is hotelization of the, of residential properties. What, what's your opinion of that?
• 1:36:36
  Speaker D: I mean, I think that's been in the works for a long time now. I mean, I think there's been a merging of especially the interior design community that has been working on hotels and has now been more active in the multifamily space. And that's been, we worked, you know, we have worked with on projects where we've hired interior designers, whether they were the primary designer or maybe a peer reviewer. That's coming out of the, out of the hotel industry. I would also say, you know, if you go back 20 years ago, there was a clear differentiation between condo for sale, condo product and multi family. Condo was always higher level finish, often had better amenities and rental was sort of a lower middle tier product. In some ways I feel like it's almost the roles have been reversed. I think if you go into a multi family building in this area, between the amenities and the level of finish in the unit, I think they stand up head to head and in fact a lot of cases they're, they provide.
• 1:37:39
  Speaker C: For a stronger amenity bag.
• 1:37:41
  Speaker D: A lot of condos don't do a lot of amenities because they amp up their, their, their condo costs, right?
• 1:37:47
  Speaker B: Yeah.
• 1:37:48
  Speaker D: So they're trying to limit the amount of amenities, whereas with an apartment building they're able to more easily cover those costs.
• 1:37:55
  Speaker B: Urban development, at least in the D.C. area currently is driven first by residential demand. With either for sale or for rent projects, usually including retail and other amenities. Office development has come to a halt primarily unless driven by a build a suit or part of a mixed use project. Do you see a resurgence in office development should the federal government decide to vacate many of their underutilized buildings in the city? We talked a little bit about that earlier. The new administration may impose back to work guidelines for federal employees and several class B buildings downtown may become more suitable. Your thoughts?
• 1:38:33
  Speaker D: There's so many dynamics at play here. I think it's impossible to predict what the future of the office market is going to be here. We did internally a little back of the envelope analysis of what the impacts might be of job cuts. And the Washington area has about 400,000 federal jobs. These are non military jobs or non uniform military jobs. 400,000 federal jobs. This is in a market where there's 3.3 million total jobs in the area already a relative, I think 12% of the workforce in the Washington area is federal. 75% of those jobs. So about 300,000 jobs are defined defense, civilian defense, security, intelligence. So probably as the signs are that those are largely going to be untouched, those jobs. So you're talking about 100,000 jobs that are potentially at play in terms of being cut. And they're not going to, they can't.
• 1:39:38
  Speaker B: Cut all of them.
• 1:39:38
  Speaker C: Right.
• 1:39:39
  Speaker D: I mean, it's people working at the Social Security Administration, ira. I mean, they have to have. So let's just assume 20% of those.
• 1:39:47
  Speaker C: Jobs can be cut.
• 1:39:48
  Speaker D: You're talking 20,000, which is about 0.6% of the total employment base in the Washington area. And the job growth in this, in this area, even in the face of declining federal employment. I mean, the federal employment has been going down over the last 10 years since 2013.
• 1:40:06
  Speaker B: Yeah.
• 1:40:06
  Speaker D: And so job growth is consistently 35, 40,000 jobs a year. I mean, for the last, pretty much, much on average for the last 20 years. Right. In the Washington area. So just assume it's 40,000 jobs on average. We will make up for 20,000 lost federal jobs in six months.
• 1:40:24
  Speaker B: Right.
• 1:40:24
  Speaker D: And that's it. That's only one cut.
• 1:40:26
  Speaker C: Right.
• 1:40:26
  Speaker D: I mean, I mean, it's not like they're continuing to cut new jobs. Once those jobs are gone, they're gone and you know, we'll make up for it in six months and we can move on. I mean, in terms of the, the back to work, I mean, I think that alone could offset some of those cuts. Yeah, I think my understanding was about 15,000 people whose federal jobs are based in the Washington area, but they live outside the area, they've been able to move away. So, you know, if those folks are required to come back to the office, you know, that also could offset any potential job cuts.
• 1:41:03
  Speaker B: Shifting to company cultures, when you interview people for your company, what characteristics do you look for young professionals?
• 1:41:12
  Speaker D: The number one thing is intelligence. I know it's an easy thing to say, but when I, when I say intelligence, it's just, it wraps up knowledge of the industry, knowledge, sort of expertise on what we're looking to hire for and just sort of innate intelligence and the ability to think for yourself. I'm very much a believer of and I'm a manager where I let folks do their own thing. I'm not a heavy handed supervisor. And so I want people working on the team that can kind of go off and self starters. Self starters who can do their own thing. So that's, that's the number one thing for sure. And then you know, after that and you know it's not far down the list, it's a close second is just cultural and that's an intangible. Right. It's just sort of in talking to somebody do you feel like they're going to be a good fit, have the right sort of temperament and personality for the organization and you know, and going along with that is sort of an innate curiosity and excitement and interest in what we do. You know, development is, is hard, really hard and, and it's getting harder and harder to do every day as there's more regulation, more nimbyism and you know, everything's kind of getting layered on top of development to solve you know, a lot of the world's problems. And you know, having people who are just excited about being in this business and naturally curious about learning more about it is a characteristic certainly look for.
• 1:42:49
  Speaker B: Shifting to your personal philosophy. Toby, when you were fully engaged in multiple projects, how did you see balance the balance among family business and giving back anything you'd like to share about that?
• 1:43:01
  Speaker D: I've never mastered it and I think, you know, we may have, I think talked a little earlier about this sort of two front living arrangement I have where I'm working down here in D.C. but my family is for the most part living in upstate New York. So there's a little bit of back and forth with that going back between those two places which is both the pros and cons of that. I think while I'm working pre retirement a lot of my time and energy gets invested outside of my job. My day to day job is getting reinvested back into the industry. So I'm, I'm on the executive committee for dcbia. I'm active in uli. I am a mentor through the Cornell Real Estate Council. So I'm trying to build up and help our industry. I mean to some degree it's self serving, obviously mentorship, things like that. But I enjoy it and I feel like that's an area where I can add a lot of value. I also from a kind of like cultural standpoint, I am on the board of the D.C. history Center, a big lover, as I know you are, history, both D.C. history and regional national history. So I love being part of that up in upstate New York, you know, we, there's a gallery there. There was a, there was an artist named John Barrow who was active up there. So we support that. There's, there's obviously the Finger Lakes, which we like to support because they're some of the cleanest water bodies in the world and we'd love to continue to see, maintain that. So we support those efforts. So it's, you know, it's a wide variety of things that myself, my wife, attributed to and participated, but the things that are meaningful to us.
• 1:44:55
  Speaker B: What lessons would you share both in career planning and in business performance to the young leaders in the listening audience?
• 1:45:05
  Speaker D: So I've had that question a lot. I entertain a lot of young people, especially Cornell or UNC folks have connection to academically. They call me up cold call. So I get those kinds of questions a lot. Usually what I tell them is if you have a choice, because between, you know, if your first job is, you know, working for a large company going into the real estate industry or a small kind of mom and pop, you know, entrepreneurial situation, I recommend for their first job, they actually take the go to the larger company because they're going to learn some discipline, some systems.
• 1:45:43
  Speaker C: They're going to learn, they're going to.
• 1:45:44
  Speaker D: Meet a lot more people and maybe even more importantly, they're going to have probably a brand name on their, on their resume. And I saw this firsthand, you know, when I worked, my first development job was with Toll Brothers.
• 1:45:56
  Speaker C: Right.
• 1:45:56
  Speaker D: That job, that Toll Brothers kind of stamp of approval was, was very meaningful in terms of finding the next job.
• 1:46:04
  Speaker B: So that's, that's, that's good advice.
• 1:46:06
  Speaker D: Often my recommendation. I also, notwithstanding how my career has gone, I also, they, people need to recognize that in real estate to make money, you need to build equity. And the way you build equity is through tenure. And so there's value in staying at a place as long as you're happy there and things are going well, stay at a place as long as you can. Now, the first few jobs, there's always job bouncings. And you should actually try a few different places early on, but find a place that you can kind of settle into and ride out because you'll build, it'll come kind of compound on itself.
• 1:46:44
  Speaker B: Sure.
• 1:46:44
  Speaker D: The wealth creation. And then the other last piece of advice I typically give folks is if your goal is to have sort of control over the outcome of what you're trying to do, the development project you're trying to create. The closer you are to the decision about how money is being invested, the more control you'll have over that project. And so being in an organization and sitting in a seat where you're have, you know, maybe not necessarily day to day communication with, but you know, week to week, month to month communication with the folks that are making investment decisions, that's going to generally be a more satisfying career where you're feeling like you have some level of control of your destiny.
• 1:47:35
  Speaker B: Yeah.
• 1:47:36
  Speaker A: So the more bureaucratic situations you were.
• 1:47:38
  Speaker B: In were more challenging for you than to some extent.
• 1:47:41
  Speaker D: Yeah. I think in general.
• 1:47:43
  Speaker C: Right.
• 1:47:43
  Speaker D: Where you're sort of. You could be toiling away. And if you're not sort of in regular contact with the folks that are making the investment decisions, a lot of your work could be for not.
• 1:47:55
  Speaker C: Mm.
• 1:47:58
  Speaker B: How do you see the advantages, disadvantages to acquisitions versus development and to long term holding and merchant building? Do market cycles have the most impact of those decisions?
• 1:48:10
  Speaker D: I mean, it's obviously acquiring operating assets, if that's what you're referring to, is a totally different business than development. I get why folks do that. And certainly there's pension funds and insurance companies that buy operating assets to tap.
• 1:48:30
  Speaker B: Into cash flow or family offices or. Yeah, right.
• 1:48:35
  Speaker D: So there's a reason to invest in those things. It's not something I'm interested in doing because I'm a, you know, if you trace again, going back to the very beginning of a conversation, I'm in this business at the foundation of it because I'm interested in creating, building and creating value through. Through construction. And so I'm committed to that. You know, there may be periods where buying operating assets is a more accretive part of the business. I'm sticking in my lane and sticking with the development.
• 1:49:09
  Speaker B: I get it. And it's interesting that there's so many people out there that have a wholly different perspective.
• 1:49:16
  Speaker C: Yeah.
• 1:49:16
  Speaker D: Again, there's nothing wrong with that. In fact, in many cases they're probably making more money doing it. But you got to stick with what you know and where you can add the most value.
• 1:49:26
  Speaker B: That's great. So tell us some of the biggest wins, losses and surprising events that happen in your career, Toby.
• 1:49:36
  Speaker D: So I'd say I was thinking about this and that probably the biggest win and the biggest loss are the same thing, which was when I started my own company. And there's nothing I'm more proud of than what I created there. The Company itself, seeing through the business model, the business plan, seeing it actually work and do what I hoped it would be and could be, gives me a tremendous amount of pride and satisfaction at the same time. As I mentioned before, the projects that I worked on during that period were the most challenging by far. They were the least financially successful projects in part because of the unforeseen challenges that I faced on those projects. And so it's just sort of this like within one, you know, episode of my life. They're both the, the best and worst.
• 1:50:35
  Speaker B: What about surprises?
• 1:50:37
  Speaker D: I mean, the surprise, biggest surprise frankly is like just my career in general again. I sat set out to be an urban planner.
• 1:50:44
  Speaker B: Right, right.
• 1:50:45
  Speaker D: And you know, not only did I completely shift gears to be in the real estate development industry, I'm, you know, leading a team here for a major company, national company, in a major metropolitan area. I didn't, I did not foresee that. That was not, you know, where I would have thought my career was going to go. And I'm very happy that, you know, I am where I am.
• 1:51:08
  Speaker B: Well, you've had quite a winding path.
• 1:51:10
  Speaker C: Yes, I have. Not always by design, but yeah, I'm.
• 1:51:13
  Speaker D: Going back to the, I wish there was more opportunity for some more extended tenure and I'm, I'm hopeful that I'm out of place, place that I can kind of stick around for, maybe set a new personal record for years in one place. But has been a winding path for sure.
• 1:51:28
  Speaker B: Yeah. It's interesting as I look at your career and I, I look at mine and there's a lot of similarities to it as far as movement. Yeah, I, I had one 20 year stretch with one employer that's pretty good. But we were sold twice. So in essence it was three different employers because it's three, three different owners, but it was the same entity that was just sold twice during that time. But other than that, I've been, you know, one, two, maybe three years, most at other enterprises and sometimes as you say, it's not necessarily by choice, but opportunity comes. Yeah, you never know.
• 1:52:04
  Speaker D: So no, I mean, I wouldn't trade it for anything. I've had a tremendous, you know, experience and met some amazing people. So it is what it, it is.
• 1:52:12
  Speaker B: If your 25 year old self were sitting here, what would you tell him?
• 1:52:17
  Speaker D: You know, this is a hard one because I am definitely not a person with like regrets.
• 1:52:23
  Speaker C: Right.
• 1:52:23
  Speaker D: I do not have regrets. I don't look back and say I would, you know, I made decisions based on what I knew at the time. But if there Are one thing I probably would do differently is, or what I would tell myself to do differently is instead of going a master's degree in planning, I would go get an mba. And that was because I had to learn especially the sort of analytical side of the business piecemeal. I never got sort of a comprehensive academic instruction on how to analyze a real estate deal. And so I picked it up over time and I think, you know, I'm pretty good at it now, but I think it would have jump started things if I had been given a really good analytical real estate underwriting foundation. It would have sort of cut out a lot of the headache. Now if I had done that, of course I wouldn't have met my wife and you know, because I met her.
• 1:53:18
  Speaker C: Planning school, I mean, Keenan Flagler school there. Right, well, true.
• 1:53:22
  Speaker D: Yeah. I mean, so like, you know, obviously that means other things would have been different and, and I do value tremendous, tremendously my planning background because I think I do, I do bring that to bear. It's not like I went to medical school or something completely different. There's an aspect of everything we do that has a planning component to it. So. But that's probably the one thing, one piece of advice I would have given myself and it's a piece of advice I frankly tell to some of these kids who call, you know, like recommend going to getting an MBA or going to, you know, good real estate program undergrad, either undergrad or in graduate program.
• 1:54:00
  Speaker B: Well, I talked about it in my introduction, but I have a community that I've started that I kind of am helping people think that through and career planning and thinking through those ideas. And often college doesn't give you that. So sometimes it has to, it's after school and while you're working is there are skills you can learn along the way, which I'm trying to help people do.
• 1:54:21
  Speaker D: That's great. Yeah, that's much needed.
• 1:54:24
  Speaker B: Yeah. So if you could put a billboard on the Capital Beltway with a message for millions to see, what would it say?
• 1:54:30
  Speaker A: Toby?
• 1:54:31
  Speaker D: It would be a very simple message and it would say just simplify with a period and, and you know, and a lot. What, what I mean by that or the sort of meaning behind that is that, you know, if again, real estate development in particular, I think is one of the most complicated industries out there. I mean there's this, you know, there's legal issues and design and construction and you got people fighting you from every angle. And so development is just inherently complicated. Why over complicated? Right. So I mean, I've had situations where we could have acquired a neighboring parcel to add, you know, 50 more units to a project. But just by bringing in that neighboring parcel, even though maybe made the project bigger, you're just introducing a whole other level. There was another entity that we're having to negotiate with. It almost never pays off in the long run, those kinds of things. And then just from a personal level, I strive to make my personal life with my family as sort of simple as possible so that, you know, my work life can be this, you know, cauldron of activity. And if it's contained by a very simple, straightforward life where we've sort of.
• 1:55:53
  Speaker C: Shedded unnecessary, you know, appendages, then it.
• 1:55:58
  Speaker D: Just makes life a lot easier. So simplify is my word of wisdom.
• 1:56:03
  Speaker B: That's something a lot of people can learn from. Life gets too complicated sometimes.
• 1:56:10
  Speaker D: Absolutely.
• 1:56:12
  Speaker B: Thank you very much for your time and energy today. I really appreciate it. Thank you.
• 1:56:17
  Speaker D: Thanks again. It was an honor.