How to Invest in Commercial Real Estate

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Episode 111 - Warehouse Investing, Cannabis Boom, and the Power of Social Media with Aviva!

by Criterion, Braden Cheek, Brian Duck
July 3rd 2023
00:00:00
Description

Today hosts Braden Cheek, Brian Duck and Joel Thompson discuss warehouse investing, cannabis, and digital marketing with social media powerhouse Aviva Sonenreich!

Time stamps: 0:00 - Introd... More

Well, how is it going? Welcome back to another awesome exciting episode of How to Invest in course, real estate. I'm speaking it into existence. A and we have another super exciting guest that I will introduce him one second. But if you were on our investor list, which if you're watching this, it would literally be mind blowing if you're not on the investor list already because we made it through over 100 episodes of us shamelessly plugging how you can get on our investor list. But if you still don't already know, it's easy, you go to our website, there's a big button that says join our investor list and if you are on that list, you got an email last week while I was in Mexico. Thanks guys for you that said we are launching our latest investment opportunity and that is a super cool deal because it is a ground up, build a suit Starbucks and multi tenant strip center with the Shipley's Doughnuts, a liquor store, smoke shop and a and a little vacancy. And man did it fly by, by the way, Fort Worth. Did I say another city? I don't know, I don't think you said the city. So I was just let him know it was in Fort Worth. Ok. I actually think it's a Marine Creek Dallas since Fort Creek.

So, did you mention there's a Starbucks? I, I feel like I mentioned the Starbucks too. Anyway, if you saw it last week, uh, it's already too late because we already, uh, oversubscribed, uh, to that investment. Yeah, it was a small equity raise. So if you didn't check your email in the first day, then you missed the opportunity. But for the investors that got involved, we are super excited. We close on that tomorrow. Um and it's an awesome deal. We're gonna build it, we're gonna sell it. We're gonna make tons of money who so speak it into existence. Um The Feds also have met again today, Joel. Yeah. Now kept interest rates the same. It's the first time they've done that since March of 2022. Uh inflation is, has been coming down steadily over the last few months. Uh I guess everyone's hopeful that it will continue to come down and that will pause rate increases for the foreseeable future. And if we get below, you know, 3% probably on our way to two where they want it, they may start lowering interest rates again. Well, I think we've made her wait long enough. Um Everyone, we are super excited to have Aviva on, she is the managing broker of the warehouse hotline she's located in, in Denver, Denver and we are so excited to have you on today.

So, uh come on, tell us a little bit about yourself what you do and, and kind of why you're in commercial real estate, I guess. Yeah, thank you for having me. I uh really appreciate y'all reaching out and uh you taking the time to have uh to chat. So, yeah, my name's Aviva. I'm a broker, a managing broker here in Denver. I'm a third generation warehouse lover in the great state of Colorado. Um My parents, excuse me, my grandparents fled Nazi Germany, came to America with nothing in their pocket epic epic immigrant story, which led to my gramps buying his first warehouse here in Denver in 1984. We still own and manage that property to this day. 40 years later. Yeah, it's sweet. Gramps knew it was a uh I met him but my father uh from that warehouse realized there was something to warehousing and went on to syndicate uh uh 10, 15 property portfolio of warehouses in the Denver metro area before warehouses were cool.

And um we still lease and managed uh a large portfolio as well as do third party uh leasing management, the works brokerage. But um I joined the family business at 22. Just love warehousing, love the legacy and the people and the players and the deals. And uh I realized that what was probably beachfront property for my old man or for my grandpa uh uh beachfront property in Malibu is not what my beachfront property in Malibu will be. I feel like beachfront property in Malibu for commercial real estate today is uh the internet and digitally facing. And um so I decided to hop on the internet and start talking about it. And then I just realized there was a huge demand for people to talk about this industry online. A small supply of folks like you who are forward thinking enough to get there in an industry that has generally been super resistant to publicly speaking about anything outside of their friends and family.

And uh that is what landed us here today. Nice. Yeah, I love that. So what uh do you have a favorite platform that you use um on social media? Well, I like them all for different reasons, right? Like for my own personal consumption, probably go to youtube more for dealing with my own friends, community inner circle city, probably Instagram. Uh If I wanna waste two hours on Mindless like content, probably Tik Tok if I wanna get in, you know, if you want to get crazy right now in commercial real estate discussions, Twitter like it, Twitter is insane right now. So just depends what mood I'm in. How much cop makes sense. Aaron, did you hear that? Did you catch that? OK. Yeah. So super interesting getting into uh industrial property and warehouse in Colorado and you guys were so ahead of the the game and then you had a stroke of luck where they were one of the first to legalize marijuana.

And then the whole world changed for you guys probably doubled the value of your portfolio overnight or at least in the first couple of years of that. Uh Is that boom still happening? Is are there still deals in Colorado and industrial and office and warehouse, not office but uh office warehouse maybe tell us about that. Oh my gosh. So yes, I was definitely in the passenger seat in on January 1st 2010 when Colorado was the first state to recreationally legalize cannabis. I think that's what they call anyway. Um You know, there is a limited inventory of C class warehousing, you know, and anywhere there was limited inventory and there uh Denver is a city of small businesses overnight. The weed industry absorbed 25% of the C class warehouses in the city. Obviously, rent prices and property prices went through the roof. Um It was crazy.

Very, very cool to experience like such a high high and uh uh just this revolutionary reality for the warehouses and legalization and new industries, I digress anyway, uh that high, you know, with the highs comes the keep talking about high. Tell us about what you did this morning. Speaking of start talking about what happened recently, uh which was bound to happen, but people still act surprise. Uh More uh legalization throughout the country led to less of a demand for the product and it, you, the cannabis industry is a bloodbath here in Colorado now, like by uh all this, only the strongest have survived, I've been in too many warehouses that have been destroyed by various uh grow operations. And um but it did ultimately propel our specifically c class warehousing forward and uh it was definitely wild to watch.

You're, you're telling the exact story that's going on in Oklahoma right now, that, that exact scenario because we legalized it. What, three or four years ago, the exact same scenario is playing out. We had a showing once on a building that was in a, it was zoned for pot and we were showing it, we generally try to stay away from those types of tenants, but there's a few exceptions. And the guy brought $50,000 in a suitcase in his trunk to the showing. And he said, I, I have the money, I have the deposit, it's in the trunk. I have cash 50 grand. And I was with my old man. He said, I don't want it, I don't want anything to do with that. And uh that was the kind of stuff you used to see. Uh But during those times, yeah, it's funny. So you're saying you're bringing this new wave of technology into commercial real estate, which you said is, has been, you know, resistant to these sort of things and I think we've tried to do a very similar thing, not necessarily just with social media, but with a lot of aspects of, of the business just bringing it online into an easier, more accessible younger um a above board transparency.

Um I, I guess I'll say, and we've had a lot of feedback with that. So what have you found that social media and you being online talking about social media and, or talking about commercial real estate and, and what you guys are doing at these warehouses in Denver, where have you seen the value that's added to your family business? Uh I think if you were to say like dollar for dollar value, it's probably realistically my immediate community like and their community just if you're just pounding content about warehouses in Denver for years on end, eventually somebody's going to say I need a warehouse in Denver and then the, the way that we consume social media, you know, you have to look at your own consumption habits to understand other people's consumption habits and we spend a lot of time on Instagram. So if it's free to post valuable content to other people through that medium, it just makes a lot of sense and is effective.

Um It's a look, the social media thing as you know, it's a long game but right, it's not an overnight, it's not a post and cash the check. But this industry, commercial real estate is also a long game and so I figure I might as well just play the two at the same time and, uh, see what happens. Yeah, I think, I think that's completely right. I think you're gonna have a ton of people. Right. That are, are seeing, you talk about warehouses. Hey, you know, I need a warehouse. Who do I call the warehouse lady? I mean, we're, we're all doing that. Right. Are you seeing any like funnels into? Hey, how do I own something like this? How do I get involved in something like this? How, you know, how do I buy something like this or is it strictly, you know, more, more leasing stuff? Oh, no, overwhelming uh curiosity. And there, there's an overwhelming number of people who want to invest with me. You know, I, that's probably been the most shocking thing or how many people are like, I have 50 I have 75.

What are you buying? And I'm like, oh my God, I don't even know you. But you know, that's probably, that's the reality of the future and uh being internet facing. Sure, I'm not getting uh all my cell, you know, my sellers are not all from Instagram by any means. Uh but um it's working thankfully, I've got a couple brokers under me and I keep them busy for the most part right now. It's pretty crazy. But yeah, a couple of things that struck me is talking about the cyclical nature of what happened in Colorado. And then Brian mentioning that it's happened here in Oklahoma. I, I want people listening to understand that that is a bedrock of commercial real estate investing. It. Not all uh industries go through these cycles like commercial real estate and we won't get into the details there. That's probably a whole podcast as talking about how the cycle flows and what are the indicators of each section of the cycle. But you know, this is a game that is a long game and they're, you know, when you don't have enough uh product to, to meet demand, developers go to work and they start churning out more square footage uh because it's hot and everybody wants it and prices are going up and then what happens, interest rates go up or uh you know, they legalize pot in other areas.

Now the demand starts going down. Well, all these projects have started and so they're, they're gonna go ahead and finish them out. So that's gonna put a lot of square footage in demand on the market that will not get absorbed. Uh at least not initially. So then people start to lower their rent prices to, to get those tenants. Uh And so then it starts to drive the prices back down. And so that's how this thing goes and you're not gonna get out of uh of being in cycles when you're in commercial real estate. What people might do is they might get in a cycle at the wrong time and they, they, it doesn't go well and they say, oh, shoot, I, I, I'm never gonna do that again, but they didn't recognize that that was just a short window in time. And the biggest example we have of this is, is 08 and 09 where literally the world ended in commercial real estate. And the best deals in the history of commercial real estate in my lifetime were available in 2009 and 2010 and 2011. And, and that's when a bunch of people decided they were getting out of commercial real estate. So I think it's just a broader point that I wanted to bring up is this is a game that has cycles and you need to learn the cycles and don't get discouraged when you're on the wrong side of a cycle because the wrong side of a cycle means you're really close to the right side.

All right. So how do we put them? And uh our listeners in touch with Aviva uh after the show, you just gotta go to the warehouse hotline dot com. It's beautiful. Oh, that's easy. Yeah. Well, we appreciate you being on social media and promoting commercial real estate. Appreciated hearing uh about your story in Denver. It's a great market if you can afford it. Uh Family story too. Yeah. So thank you for coming on today. We really appreciated It?

Episode 111 - Warehouse Investing, Cannabis Boom, and the Power of Social Media with Aviva!
Episode 111 - Warehouse Investing, Cannabis Boom, and the Power of Social Media with Aviva!
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