Mastering the Art of Trust and Communication in Industrial Real Estate with Joel Friedland

Unlock the secrets of industrial real estate and learn how trust can elevate your investment game with Joel Friedland of Brit Properties. Joel's tale is more than just transactional tales from the property line; it's a master class in the relationship-driven world of real estate syndication. From a tenacious young graduate to a seasoned pro, Joel candidly shares his journey, the role of serendipity and sweat equity, and the delicate dance of turning a no into a yes. His early leap into ownership at 29, armed with equal parts naivety and nerve, offers a playbook for ambitious entrepreneurs itching to lay their foundation in the industry.

Step into the art of conversation with strategies that turn monologues into meaningful connections. Joel and I dissect the power of listening, leaning on the WAIT principle ("Why Am I Talking?") to enrich interactions and solidify investor trust. This isn't just chatter about communication; it's an exploration into the genuine curiosity that builds lasting bonds and opens wallets. We share stories that highlight the nuance of understanding, from a principled investment decision to the daily grind of negotiating with unbending bureaucracies, proving that a good listener is worth their square footage in gold.

The episode wraps with an analytical look at commercial real estate's shifting tides amidst the pandemic, where industrial spaces have outshone their commercial cousins. We navigate the nuances of tenant operations, the importance of market size over location, and the strategic selection of properties to minimize vacancy risks. Additionally, Joel imparts wisdom on the development side, from dealing with the snail's pace of sales cycles to the thrill of transforming neighborhoods. Every anecdote and insight from this discussion with Joel serves as a beacon for navigating the unpredictable seas of real estate investment.

https://britproperties.com/about/our-team/

Highlight Timestamps

(03:21 - 04:12) From Broker to Real Estate Syndicator (51 Seconds)

(10:14 - 11:29) Investor Values Experience Over Perfect Record (75 Seconds)

(17:22 - 18:52) Gate Incident Teaches Patience (90 Seconds)

(24:58 - 26:30) Rise of Industrial Real Estate (92 Seconds)

(32:08 - 33:06) Dealing With Tough Investors (58 Seconds)

(38:02 - 38:38) Decline of Small Building Development (36 Seconds)

(39:38 - 42:30) Qualifying Investors for Syndication Deals (172 Seconds)

(44:16 - 45:56) Investing in Industrial Real Estate Market (99 Seconds)

Chapter Timestamps

(00:04) - Industrial Real Estate Syndication Success

(11:27) - Importance of Listening in Communication

(24:58) - Industrial Real Estate During the Pandemic

(39:38) - Qualifying Investors for Industrial Real Estate

(45:56) - Commercial Real Estate Investing and Development

Industrial Real Estate, Trust, Investment, Syndication, Relationship-driven, Property, Entrepreneur, Communication, Listening, Pandemic, Market, Tenant, Development, Qualifying, Investors, Commercial Real Estate, Risk, Mentorship, Neighborhood, Undervalued

Transcript

Marcus: 0:04

Welcome back to MVP real estate podcast, season four, episode four, with Joel Friedland of Brit properties in our backyard almost Well proximity. He's in Chicago, we're in southeastern Wisconsin, over four decades of experience, broker owner. A lot of his stuff, well, all of his stuff is syndication, which is interesting for me. We've never really done anything syndication wise, um, and he is in the industrial market. So another commercial side of things. Um, super nice guy and he talks about the importance of listening and how that affects his. I mean, his career has been built on listening and he talks about the one little I don't know if you can call it like a wake-up call or what did he categorize that as it was early on in his career with an investor. But I guess we'll bring him on the show. We can talk about it. Well, thanks for being here, joel. I want to get into a couple topics with you. I know you are heavy in industrial real estate, many decades of history that you can bestow upon us. You've already kind of done that before we started recording. So thank you for all the help already. But before we get into those things, can you just give us and the listeners a little like 30 second background of where you came from, in kind of some key moments in your life that led you to where you are today, and then we'll kind of get into everything.

Joel Friedland: 1:47

Sure, yeah. So my family is, like you guys, from Wisconsin and they landed in Chicago and I grew up in Highland Park northern suburb and went to the University of Michigan and I knew from the time. I was very young, way before college, I wanted to be in real estate. I just knew it. I knew people in real estate and it looked like kind of a cool thing to do. So I graduated from Michigan during a big recession, 40 something years ago. I'm 64. The 22 interest rates were in 1981, 17%. And I got hired to be a leasing agent by a family that owned 80 industrial buildings. It was a father, two sons and a daughter and I went to work for them and they said, hey, we've got all these vacancies, why don't you fill them? So I went canvassing door to door to industrial parks and talked to owners of companies and said, hey, I've got a vacant building a few doors away. You want to move. And I did that like hundreds of times a week and I filled up nine of 10 vacancies and learned the business and I was a real estate broker. But broker, like people, do homes. There are brokers who do nothing but industrial. People do homes. There are brokers who do nothing but industrial. And so I became an industrial real estate broker, helping tenants and sellers and buyers. And I did it for a long time and I realized the only way to get wealthy in real estate is to own it. Brokering is great, good way to make a living. As you know, when you're an agent and you're leasing you can make a really good living. But you have to start over every day. Every January 1st it's a new year and you got to start the new year and you're starting from scratch and I saw that if I could buy properties and own them, owning is forever and collecting rent is monthly. So I went to the family that I worked for. They were syndicators. They had done dozens of syndications and I said I want to be a syndicator, will you help me do it? And they said yes, we'll help you do it. They said we'll put up a third of the money for your first deal. We'll introduce you to our investors, but you've got to find the deal and you've got to find your own investors and put your own money in. So my first deal was an industrial building in Gurney, which is about 20 minutes from the Wisconsin border up north in the far north suburbs of Chicago and I built a building from scratch 14,000 square feet and I raised money from a bunch of people$20,000 each, including myself. I did something called a private placement memorandum. There's a lot of securities laws and when you raise money from people it's highly regulated. So this thing right here is called a private placement memorandum and I put one of these together for the deal in Gurnee. I got a lawyer who specialized in securities and I went out and I met with all these investors and they said, yeah, we'll take a chance on you kid. So we raised the money, built the building, leased the building and collected rent and it felt really good. So I went and did another one and that one was bigger. It was two and a half million dollars, raising money in chunks of 75,000 each. And then after that I've done another 98 acquisitions of industrial buildings Chicago, florida, ohio, new York and I raise money from people when I have a building that makes sense for them, that they like the look of, they like the feel of, they like the return. Most importantly, they have to trust the syndicator, the sponsor. So I have to convince them that I'm worthy of their trust in order for them to give me their money. They don't just wire money without knowing somebody. It's all about relationships.

Marcus: 6:03

Yeah, and how old were you on your first deal?

Joel Friedland: 6:07

29.

Marcus: 6:09

Man that is going from zero to 100 quickly, because that is that's a lot for a 29 year old to raise capital on for ground up projects. So kudos on that one. I'm. I'm trying to put myself in your shoes and try to understand the nerves that were going on in the nervousness as we're in the building process.

Joel Friedland: 6:33

I was too stupid to be nervous.

Marcus: 6:35

Sometimes that's needed, though I think there's. There's been so many people that talk about like you need to be a little bit stubborn and a little bit naive to get things done.

Joel Friedland: 6:46

Yeah, I yeah. I thought I could do it, so I did it. I didn't know that I couldn't do it, yeah that's something that I see.

Dan: 6:52

I'm going to relate it to sports. But, like you see people breaking like records for, like, either the hundred yard or hundred meter or the one mile like time, but if there's nobody ever there to put the negative thought in your head like this can't be done, you don't know that you can't push beyond that barrier that is just mentally created by others. Right, like you push through it, not even knowing that there's an obstacle or a hurdle in front of you and you break that record. And people like, well, how did you do this? You're like, just went out and did it. Nobody told me I couldn't do it. Right, like there's the denied. Then what do you call it?

Joel Friedland: 7:28

naivete of people like yeah, that's yeah, but I'll tell you what but there is a thing about it that has to be in place, which is you've got to have the talent and the perseverance to do it. People, if you never give up, you're going to get something done. If you have the talent, you know someone can't run the fastest mile. No one's going to run a three minute and something mile unless they are wildly talented and incredibly in good shape. Right yeah, it's just not going to happen unless all the stars align. But if you have a dream, I think it comes down to having a vision. First I had a vision in my mind of what I wanted to do and all the pieces were there. And if I had a big whiteboard I could write all the pieces down and the vision is whole. It's find the land, find the builder, find the investors, figure out the materials you're going to build it out of, figure out how you're going to find tenants. It all has to be there, which means in order to do a syndication properly, a lot of experience is needed. Nobody just starts with no experience in real estate and goes and does a syndication. First you have to know something and you have to have had some level of difficulties along the way, because people relate, investors relate to honesty, and so when I go syndicate, I don't tell people how great I am. I tell people I have a lot of experience and I've learned a lot. And learning a lot means I made some mistakes and had some rough times and had to figure out how to get through them. People trust someone who's had a rough time and has worked through it.

Marcus: 9:26

Yeah, it's funny that you say that, because my son's jujitsu instructor says there is no losing, there's winning and learning. So you're either on the winning team or on the learning team. I guess the only loss is if you don't take anything from it. So you go through those, those failed projects or projects that don't pan out the way that you wanted to. Just don't make the same mistake. Learn from it and get better.

Dan: 9:54

You reminded me of Wolf of Wall Street when you said don't judge me by my wins, judge me by my losses, because I have so few.

Joel Friedland: 10:01

Oh no, I don't say that.

Dan: 10:03

No, I just said that. That's what it reminded me of. But it's like you said you don't. You don't have losses, you have learning opportunities or ways to improve the whatever well, yeah, I, I actually talk about my losses.

Joel Friedland: 10:14

um, I had a very interesting experience. Um, uh, I went to see a very wealthy guy to invest and I sat with his family in their in their kitchen, trying to convince them to put money into a deal, and he said so tell me about your track record? I said we've never lost any money. This was a number of years ago. He said, oh well then I'm not investing with you.

Dan: 10:43

Really.

Joel Friedland: 10:45

He said yeah, it's unrealistic that you've never lost money. Maybe you haven't really lost money because you've never been through a rough patch, or maybe it's because you have bad deals and you just aren't admitting it and you're hiding them from people. He said but come on, because I told him that I had bought 70 buildings already. He said and you have no bad deals. I said well, we haven't lost money. He said you will. He said I'm out, I'm not investing.

Marcus: 11:18

Not with you. Interesting. He wanted to see the battle scars and the perseverance of of how you work through it.

Dan: 11:29

Yeah, interesting and probably, probably the amount of money you're asking for wasn't even significant for him to even like scoff at. He could have just given you the. He could have just given you the money and let you go have success with it. But he I mean on principle he's like yeah, let's see what you can learn yeah, it's a yes or no situation.

Joel Friedland: 11:46

Yeah, and I was a no. For him there was. There was nothing I could have done, um, to convince him. After that I could have said whoa, whoa, and I could have maybe come up with a brilliant answer.

Dan: 12:00

I didn't have one on to the next one one.

Marcus: 12:03

Oh, it's like Pursuit of Happiness when Will Smith comes in and he's like what would you say if I gave a job to a guy with no shirt? That's your, he's got to have really nice pants. Comment that you could have came back with.

Joel Friedland: 12:17

Yeah, exactly, I've learned one thing about investors and how you build a relationship with them, and that is to listen. You know, there's so many, there's so many stories and so many slogans about listening. One of my favorite ones is take the cotton out of your ears ears and put the cotton in your mouth yeah, which you know. Instead of telling them how great we were and we hadn't lost money, I should have been asking him questions. Yeah, and then they, and that's another. There's another statement that I really like, another slogan. There was a guy named Dale Carnegiegie, who was he wrote books about positive mental attitude and making good decisions, and he said um, nobody cares how much you know until they know how much you care.

Marcus: 13:21

I like that one. What book was that in? How to Win.

Joel Friedland: 13:24

Friends and Influence People.

Marcus: 13:26

Okay, because that's the one. I've read, that one for sure. I want to say that I've read two of his books Super good mentality on people and self-reflection. But I mean for you and your career. I think that speaks very, very true With you starting out as a leasing agent. You need to, number one, listen to what they need, Like. Can the facility that I'm selling even suit what they want? So, your first thing is to listen. So in within networking, which is pretty much everything you've been doing within your career, is networking and listening to to either investors or companies that are going to lease buildings from you. So it's very interesting that you bring that point up, because from the second you got on here, you are a very good listener, like you ask questions and you'll sit and you'll listen to our answers of whatever we've got going on.

Joel Friedland: 14:24

so um, you're staying. You want to hear my favorite? My favorite slogan is really kind of a tool. It's a four-letter tool, uh, w-a-i-t. Every time you're talking to someone, think w-a-i-t, which it means wait, but it stands for why am I talking?

Dan: 14:48

I catch myself in those situations sometimes and I think of the only one that sticks out to me and I think we learned this from snap or maybe earlier is that you have two ears in one mouth.

Joel Friedland: 14:56

Use them proportionately that's right you know it's funny my, I use that w-a-I-T especially when I'm dealing with my wife. Don't say what you're about to say. I was just in Florida visiting my mother a complex, uh, where there was a gate, um and a guard shack, and the young guy at the guard shack he must have been brand new and it took like five minutes to get to him because everybody was, their car, was like stuck where. He was talking to them through the window of the guard shack and I'm thinking why is this taking so long? How long does it take to get in? And I finally got up there and I said to him I'm here to visit the Cirque family and he said what building are they in? And my mother and I were sitting together. We said we don't know what building they're in. He says well, I can't let you in unless you tell me what building they're in. So my mom grabs her phone and starts dialing her friend to figure out what building they're in. Buildings all have numbers G7, g4, g3. We didn't know. So I said to the kid he must've been in his early twenties. I said, look, I don't, we'll get through to this person. But if you look behind me, there's like six people in line waiting to get in. How about, if you open the gate, I'll pull my car up behind the guard shack and I'll wait, and then I'll come back to you and I'll tell you what they're in. He said no, that's against the rules, I can't let you in. I said well, do you ever go like to a fast food restaurant where you're at the window ordering in the drive-thru and your food's not ready? So they say come? I said come on. You ever watched curb your enthusiasm with larry david? Yeah, that's just I. I, you know he's a. He's a character in that that nobody really wants to be, but he's funny because nobody would want to be that way, because they'd be hated and despised. And so I, I said to my mother, I said said, this kid's an idiot. And my mother said be patient, he looks like he's new. I said hey, kid, there's six cars behind me and it's going to take us a couple minutes to get through to the person and get the building number. He said you can't get in until you give me the building number. I said just let me move in, open the gate, I'll put my car there. I'm not going to drive around and smash into somebody's house in your complex. He said I can't do it. I said you're an idiot. My mother looked at me and she said what is wrong with you? I said the kid's an idiot. What is wrong with you? I said the kid's an idiot and it was such a mistake. I should have remembered W-A-I-T. He was just doing his job. He was an idiot, but he was just doing his job, so you know, and so when you're, when I'm dealing with tenants, investors, contractors, I try to be as friendly and nice as I can, no matter what happens. I try not to get flustered and I try to listen, and that was one of those experiences where I didn't do a very good job.

Marcus: 18:41

Yeah, we all have those, though Cause I. I try to do the same. I try to be patient, I try to listen. There are some times that catch you at a bad time in a wrong conversation. Yesterday I had one of those as well. I'm at the gas station. I'm pulling a trailer behind me, so my I'm a larger vehicle here. I stop off at the gas station because I got into the gas station with zero miles left to my tank being empty. So I pull into the spot and I'm on the phone. So I don't want to turn off my truck because my car speaker is carrying the phone. And I see the gas station attendant come out and he's like are you getting gas? And I was like yeah, I'm on the phone, give me a couple minutes. And he's like okay, went back in, came back out. I was on the phone for 20 minutes. Is that etiquette? No. So when he came back out the second time, he's like hey, you got to move. And I was like I have zero miles. If I move my truck, I might have to like push it 10 feet to the thing. And I've been here for 20 minutes. Not a single car has come to your gas station. So if you didn't have eight other open gas things, I'd understand. I'm taking up two of them, but you've had no customers. But I'll move, I'll move Again. You're an idiot, but I'll move. I get it been able to like talk to him, but the conversation I was in was pressing. I lost my cool a little bit through, a little bit too much. Uh, yeah, yeah, I had a rough day.

Joel Friedland: 20:14

I it was, it was. I have employees. You know, I've got a property management company, an accounting department, people work for me and earlier in the day I had had had an argument which I never do with my controller who does all the numbers. He gave me some stuff that was just incomplete and I just was so upset with him and he started arguing with me when I said, hey, this is incomplete, he started telling me that I can't talk to him that way and all that kind of stuff. And I said, wait, just wait, just wait. And I wanted to just unload on him because I was right and he was wrong and I'm the the boss, but you know, uh, I used weight, but the kid just, it was just one thing too many that day yeah um, and then I mean on the flip side of that too, and not I just like to plead, that was the advocate objective all the time.

Dan: 21:23

But like on the flip side of that, back to marcus is with the gas attendant. Did he need to come out twice, let alone once, especially if it's not busy? My response to marcus maybe in that situation the failure to plan on your part is not an emergency for him, right? so like yes, it's just a combination of the, the both parties, and then with you and your, your controller, it's like well, what led him to that? Maybe he's got some personal going on or like something other pressing. Obviously I don't know what his job duties are and everything there's compounding effect with that, like you know, like what led to his? If he doesn't normally do that and it's a one-off, like hey, this isn't normal for you and I expect certain excellence or certain quality of work from you. And when you, when it's off, there's got to be something wrong. Like how do we?

Joel Friedland: 22:14

yeah, when you don't know somebody and you're talking to them, you don't know what pain they're in, you don't know what's happening in their life and yeah, and sometimes it's just good to give them the benefit of the doubt, because they may be struggling through something and I don't want to make it worse for them. Kindness is really important to me and when I'm unkind I feel bad about it and I know that's the wrong thing to do I agree, every time, every single. Even when someone's aggravating me.

Dan: 22:47

You know the old ad adage kill them with kindness, oh, and that just sets them off further, sometimes too yeah so what?

Marcus: 22:53

else do you want to?

Joel Friedland: 22:53

know about syndication and industrial real estate.

Marcus: 22:56

Yeah, let's get there um, what was I going to get into? Oh, before we get into that, have you ever read? Don't split the Difference.

Joel Friedland: 23:05

I've not read it, but I've talked to many people who have recommended it.

Marcus: 23:10

Yeah, it's a very, very good. I think you'd enjoy it with your acronym of WAIT. He always talks about basically embrace the silence. So ask a question or say something. They may respond, but don't respond right away. Just wait and they'll divulge more information or say what they really wanted to say once there's that little bit of silence in there, people start to get a little uneasy and they start to. They'll open up a little bit. But if you haven't, I would recommend reading that. It was a good one. I will, I'm going to read it. Thank you for that recommendation. I would recommend reading that. It was a good one.

Joel Friedland: 23:45

I will. I'm going to read it. Thank you for that recommendation. I've heard that before from a few people.

Marcus: 23:50

Yes, and with what you're doing. A lot of your work is negotiation, whether you're working with people in the leases early on your career or you're negotiating with investors in with these industrial buildings. So negotiation being a big, big thing, strictly for industrial buildings we just had a podcast before. The guys in commercial as well. They've been kind of taking a hit since COVID, with everything pulling to go into more remote work. Industrial is, I think, probably and I don't know anything about commercial, so correct me if I'm wrong uh, one of, I would think, the strongest commercial spaces with self-storage and, um, I'm thinking about like amazon, like retail storefronts are going down. Is that what you're seeing? Is that?

Joel Friedland: 24:40

yeah, yeah. So self-storage is is an asset class in and of itself. It's not industrial, but it is an asset class and it's a good one. I know a lot of people who've done very well and are continuing to really enjoy that business. It's doing great. What's struggling are offices and retail. Industrial is the opposite. Industrial has never been higher in value, rents have never been higher and occupancies have never been any better than they are now. And the reason for that is the internet. It's because, look what we're doing. We're on this Zoom. Call for the podcast. Call for the podcast. We can sit on a call like this with somebody and look at them. If you told me when I first started in the business, when I was a fresh new agent, that one day people wouldn't be going to their office because they were going to work from home and they could turn on a computer and have a screen and see the other people and have a conversation, I would say what? That can't happen. So offices are struggling because people don't have to go to work. Look, I'm sitting at my home office. I have an office, I just don't go there very often. Some people do. They want to get away from their husband or their wife, right, but that's funny, I go there. But yeah, office is struggling and many investors, which are mainly large investors, are losing their buildings to their lenders because the offices in their big buildings are vacant and they can't fill them. Industrial can't be done from home. You cannot do warehousing at home. You can't do manufacturing at home. There has to be a place to go, where the equipment is bolted down to the floor. They don't move it to your house because you can be on Zoom, and so most of our buildings are occupied by manufacturers who make various kinds of products. We have a company that makes protein bars. They were on Shark Tank, actually on year one. What was the name of that one? It's called Element Bars, jonathan Miller. Okay, so he's our tenant in 50,000 square feet, that's awesome.

Marcus: 27:11

I love Shark.

Joel Friedland: 27:11

Tank, yeah, yeah, yeah, he's got 80 people who work there. You can't make protein bars unless you have the ovens and the mixers, right yeah, and the packaging equipment and then places to store the raw material before you make the product and then the finished product to be shipped out in truck docks. We have another tenant who's also in the food business. They make fruit juice concentrate. It's called Tampico, and they have giant tanks and tubes and wires and 20 million dollars worth of equipment where they put fruit, something or other, into the one side and it comes out as a goopy goop and they put why is it cloudy?

Dan: 27:59

I don't know why tampico is cloudy. That's the only thing. Okay, keep going. I'm sorry it's goop.

Joel Friedland: 28:06

They're in the goop manufacturing business and they have to go there. They can't make the goop at home. They make tons and tons of this stuff right? The constant in every flavor that goes into the drinks that they sell. And then we've got companies that make magnets and companies that make machines and just so many safety products. We've got a company that makes safety products, and each one of them is a company that does millions of dollars worth of sales and they try to make a profit on their millions of dollars. So they have to be very efficient. They need the best building possible to make their products the most cost-effective way, where they can make it and ship it out in a location where the trucks can get to it easily and where there's plenty of parking for all their employees in the parking lot. So industrial is doing great. Amazon and many other companies that sell consumer products are all online most of the time. We have this one tenant called Instacart. They deliver groceries. They have to have a place where they assemble all that stuff and send it out. And then we've got one where we have a package delivery facility for the us postal service, potentially possibly the worst tenant we've ever had. They, uh, they are very disorganized and they don't pay the rent on time really talking about the us government yeah, they always owe us money. Yeah, by the way, they're good. They're good for it. They're good for it. But they also have a hundred employees in this facility and the employees they smoke outside and they throw their butts on the ground and they eat hamburgers from mcdonald's and they throw the wrapper on the ground.

Marcus: 30:07

And that's wild because in the residential side that Section 8 housing, like landlords go to that because the rent is on time and it is guaranteed to come in. So it's weird that it's so backwards on the industrial side for that.

Joel Friedland: 30:23

Yeah, most of our tenants pay rent perfectly consistently every month. Yeah, and we only have a couple that don't and they usually catch up. It's not like they're not bad, they're just they're disorganized or they're having a little problem for a short period of time. But when I go to an investor group and I put together a group of, say, 30 investors to buy a building, I have to tell them the good and the bad. I can't just sell it. I have to explain what's wrong. And the trust is built when you syndicate with investors, when you tell them the risks and the bad things that are likely to happen, because then they understand that you know.

Marcus: 31:03

Yeah, and is that something you learn through experience or because, as an agent, when I started out on the residential side, that's like the fear, like you don't want to tell them all the bad stuff because you're going to lose the sale.

Joel Friedland: 31:16

Yeah, yeah, it's not selling. When you get investors, it's really, it's disclosing. It's how you disclose. You know you got to do a little bit of selling because if you believe in the investment and the property, you can't help but be excited about it, right? So that does come shining through. Hey, I love this building. It's a great size, it's a great location. We've got a fantastic tenant. But here's what could go wrong, and there's about a dozen things that you need to know that if you don't ask, I'll tell you what could go wrong.

Marcus: 31:48

And there's about a dozen things that you need to know that if you don't ask, I'll tell you what could go wrong.

Dan: 31:51

Yeah, that transparency is key. I think transparency and, like you said, disclosing. But you know, if, if you get to that point and you make them see the big picture, as opposed to just all the shiny, bright good stuff, then they get. They get a better idea of what the true potential or risk is.

Joel Friedland: 32:08

So yeah, I wish I could go back to that wealthy family and sit in their living room for the first time and make a first impression and say first let me tell you why you should not invest with me.

Marcus: 32:21

That would be. Have you talked to that investor since?

Joel Friedland: 32:24

Yeah, I did. I called him about a year ago. I said I have a new deal. He says I still have a bad taste in my mouth. Really yes.

Marcus: 32:33

Plenty of fish out there.

Joel Friedland: 32:35

Plenty of fish. He's not the last fish, right, right and, by the way, he's a good guy but very tough. So I heard, before I even met with him, this guy's tough and he was. He shut me down after my first comment, yeah that is the definition of tough, that's. That's a tough battle there he said to me we can be friends, but we're not investing with you. Interesting, yeah well, yet we'll put yet at the end of that one oh, he didn't say yet, no, he was just upset that I told him I hadn't lost any money and started with cockiness, cock, cockiness doesn't work. Cockiness can work, but eventually you piss off somebody. When you're so cocky all the time and you never stop being cocky, people feel it it just isn't right.

Marcus: 33:38

Yeah, you kind of have to dabble in that confident cocky line because things go wrong a lot of humility.

Joel Friedland: 33:45

Yes, yeah, humility. Humility is worth it Absolutely, because it's honest, you know it's honest, to be vulnerable and admit that you've got some faults and you've made some mistakes that people really relate to that.

Marcus: 34:02

Yeah, and you've made some mistakes that people really relate to that. Yeah, cause if, if they're in that position to where they're now investing, they've made, they've paved their road and along that road they have also had their hiccups, so they know what you're going through. So that guy might look from I don't know how old he was looking at the 29 year old you thinking like man, he's got so much to learn yeah, I was 39 at that point.

Joel Friedland: 34:26

Okay, because I had already done a bunch of deals. That's why I told him I never lost money. That's right, that's right I've done all these deals. I've never lost money. You should count on me. Yeah, okay, goodbye, joel, goodbye goodbye.

Marcus: 34:41

At least he kept you around for a friend, so that's good we still got. We have since played golf with each other I've just got into golf, so I'm I'm like that's, uh, my new favorite hobby, so I'm waiting for the snow to finally fade be careful.

Joel Friedland: 34:59

It becomes an addiction for a lot I know it's already kind of close. Don't let it be an addiction it's gonna ruin your baseball swing yeah, I don't have a baseball swing anymore.

Marcus: 35:08

That was gone 10 years ago, no, 20 years ago. Oh geez, yeah, uh, all right, industrial real estate. Uh, one thing I was reading about you is you go B and C class.

Joel Friedland: 35:22

Yeah, the new stuff is really big, huge, huge, big box warehouses over 200,000 square feet. My investors don't want that. That's for pension funds. Pension funds, insurance companies, REITs, people who have unlimited funds buy those because for them, a $50 million deal might be a small deal. For me, a $50 million deal would be the most gigantic thing I've ever done. And people who invest with me like the small deal and they get a better return because if you buy one of these Amazon buildings and you're their landlord, the return's 5.5% return. That's the yield and my investor is like seven or eight and the small buildings are better for that and the big buildings are great. I'm not against it. People should invest with all different kinds of syndicators and sponsors and developers, of syndicators and sponsors and developers. But just for me, in our case, small deals, all cash, no mortgages, safe, safe, safe. Because I went through such a hard time in the down cycles in the past. I just want to be really secure and have staying power in the future.

Marcus: 36:40

Yeah. So that's what my question was with that bc, because on the residential side they look at like communities as an a or b or c. Obviously you can have like higher end buildings. I didn't know in the industrial side of things how do you group an a b? Was it the size of the building or the size of the deal in its entirety?

Joel Friedland: 37:05

It's how modern the building is relative to older generation buildings. The A stuff has very tall ceilings, lots of truck docks, lots of maneuvering room for trucks, room for trucks, a special sprinkler system that's like a very high density deluge system called ESFR. We have these buildings that are older and smaller and not quite as efficient. But Amazon doesn't lease little buildings, they lease the big A buildings. So the B and C are maybe built in the 1970s or 80s or 90s and the ceiling's a little lower and the truck docks may be fewer. And it doesn't have the same curb appeal. It doesn't look the same, but it's got a lot of utility Companies need to be in them. So we keep them leased as best we can and we're mostly leased. Curb appeal it doesn't look the same, but it's got a lot of utility companies need to be in them. So, right, we keep them leased as best we can and we're mostly leased. Because there are so few small buildings being built anymore. The big ones are the ones that are the class a are being built now by developers. No one's building the little ones, so they're they're not so much a commodity as they are like a little diamond in the rough.

Marcus: 38:23

Every time one comes available, it's, it's unusual yeah, and obviously, with the buildings being built, uh, years ago, when you acquire them, is there, um, I don't know, a general cost to upgrade it, to get it back up to standard code?

Joel Friedland: 38:43

yeah, we're always chasing roof work, hvac upgrades um paving driveways, dock equipment, overhead doors, lighting uh, I know people in lighting.

Dan: 38:58

If you need connections with that, I'm sure you do as well, but that was a former life of mine, I used to sell led lighting interior and exterior oh with the, with the um, what is it called? Application engineers laying out, you know, and then also, yeah, we have, we have a guy that is in that business who's actually one of our investors.

Joel Friedland: 39:17

Okay, I'm locked and loaded with that I'm sure I'm.

Dan: 39:22

It's very competitive. I know that.

Joel Friedland: 39:24

It is, and in our area Commonwealth Edison has a program where they do subsidies and pay for some of the lighting and they make it very attractive to redo the lights. It's really a good program.

Dan: 39:38

I have two questions. So how do you qualify new investors? What would be like a minimum entry point for, say, you had a new project or a new opportunity come up? I guess what do you look for in that?

Joel Friedland: 39:58

All of our investors are accredited. That means they're all some form of millionaire. We don't have any non-accrediteds in our deals, not on purpose. We want people who can afford to lose the money just in case the deal goes bad, and we want sophisticated people. So I qualify them by talking to them like this on a Zoom call for usually half an hour to an hour.

Dan: 40:26

Okay.

Joel Friedland: 40:28

And I ask a lot of questions, I take a lot of notes. I want to get to know them, they want to get to know me and at the end of a 45-minute or one-hour conversation we know whether or not it's a good fit. Okay, we know pretty well. And then sometimes they want to check out our references. They want to talk to existing investors. I'm happy to have them do that. Sometimes they want to get a list of all the deals that we've done, our track record. I'll send them that list and it's got all the good deals and the bad deals. So it's very transparent and they like that. Got all the good deals and the bad deals. So it's very transparent and they like that. So we qualify each other and if it's a fit, we go do it together and usually someone who goes into one deal with me goes into five or seven deals over the next couple of years.

Dan: 41:14

Yeah, that's interesting that you say that, right, because, like you said, you're basically interviewing each other or qualifying each other, because I know with talking to other podcast guests and even some personal friends like they're sometimes hesitant about syndication, just like you said, because if you don't know who you're working with and you have to like get to know them and are they trustworthy and all that good stuff, yeah.

Joel Friedland: 41:42

Yeah. And I don't want anybody joining who's not a good fit. I'm not. I'm not trying to. I don't try to sell anybody into investing. I just tell them the facts, I give them the downside, I give them the upside, and then get to know um them and understand who they are and where they're, and I want to know everything about them. I want to know who their spouse is, if they're single, if they have kids, how old they are, what they do for a living, what they did for a living if they're retired. I want to know them right, really important, because that's what life's all about for me. It's about the relationships and connecting with people.

Dan: 42:23

Yeah, without that, what good is it? I agree, I agree. The other question I had was who is like your most unique or abstract tenant that you have? If you could, you don't have to name the name of the business.

Joel Friedland: 42:38

No, I've got a really great one. I've got a woman owned business. Okay, they make exhibits for children's museums okay creative things if you ever go to a children's museum and they have all kinds of interactive um exhibits where kids climb around or they play with water and sand or it's, it's we have that in Milwaukee Discovery World and then Betty Brin Museum and yeah, those are okay very cool. So that's what she makes for museums like those all over the world. She's she's a a renowned designer and builder of those exhibits. It's a fantastic company. They make an impact on children all over the world and I love them and, uh, it's cool. I love to bring people there to see her operation. It's so fun.

Marcus: 43:27

That is cool how do you get into that line of work?

Dan: 43:30

it's super cool, but if there's a need, there's somebody to fill it. Man, I think like yeah yeah yeah, one more one more does.

Marcus: 43:39

Uh, my son does crunch labs it this guy who used to work for NASA engineer. Now he makes kid toys and he's got a factory. I believe it's in Southern Illinois or Indiana. But every year he gives out a thing for like one lucky kid. It's like the golden ticket to come to his factory and like that's what I'm picturing her facility as it's just a big industrial building with a bunch of cool interactive stuff going around.

Joel Friedland: 44:05

Yeah, it's a workshop. She's got paint and she's got materials wood and metals and plastics and acrylics. It's very cool. All of our tenants are cool. Industrial is great because every tenant's different and they're all interesting to see how people make a living and what they do and what their passion is. It's really fun.

Marcus: 44:27

Yeah, and obviously you had mentioned all the different states that you've been doing deals in. Every state works a little bit differently in commercial real estate, with it being as wide open I call it the wild west. Do you have like states or areas where you are more pro investing in? Some areas where you're like the trend is no, no no, every area that's big enough.

Joel Friedland: 44:55

It's gotta be big enough For industrial. The key is not the location, it's the size of the market, because if you're doing residential leasing, you know, if you have 1000s of potential tenants, that if a unit becomes vacant you'll fill it. If you're in a very, very small town and you're remote and you have 20 units coming available in the next year, it can be worrisome if there are only potentially like 100 tenants Because they can go anywhere, they don't have to go to your building. And so the size matters for industrial because we have 16,000 industrial buildings in Chicago. That's a big market, that's the biggest market in the country for industrial, and it's very important to have enough tenants and buyers that if a building becomes vacant that you don't have to worry about it. When I had a building in De Pere, wisconsin, that my aunt owned and there were 20 buildings in the entire industrial park, she said they had a liquor distributorship that they aunt owned and there were 20 buildings in the entire industrial park and she said they had a liquor distributorship that they own there and I said I'm happy to sell the building for you, but I don't know how it's going to go and I put it on the market and I went up there and I called on every company of the 20 in the De Pere Industrial Park. There's two parks there now there was just one then and nobody was looking to move. So guess what? It sat vacant for two years and I said to my aunt I hope that you can cover this, because the carrying cost is the taxes, insurance, maintenance and utilities and that's going to cost you somewhere around a hundred grand a year. She said well, fortunately I can cover that. And then we eventually sold it to the next door neighbor who was the only person that wanted it and he knew that nobody else wanted it, so he stole it from her. It was probably worth a million dollars if there were two buyers and the guy paid 700,000.

Marcus: 46:58

The sales cycle, for commercial or industrial, is one of fear for me. I'm not in it, so it's a little bit of that unknown the fear of the unknown. But yeah, the sales cycle is always a little stressful. It's a lot stressful.

Joel Friedland: 47:16

Yes, that's it. Vacancy is our biggest risk, and vacancy can last a long time in the wrong place with the wrong building. That's why we have to choose our buildings carefully Good sub markets, good sizes, good specs.

Marcus: 47:34

Yeah you've obviously developed a pretty good system of what to look for and where you're headed for.

Joel Friedland: 47:40

those I eliminate when I look at buildings, I eliminate almost every one of them as I can't do it, can't do it, won't do it, can't do it. I'd say we probably end up buying one out of every 100 we look at, because if it's not the right building, I don't wanna be stuck with it. We own them long-term and every time it comes available it's a problem. If you buy a bad building, a bad building can't be made into a good building. Yeah, if it's got too low of a ceiling or not enough parking, you can't fix that.

Dan: 48:13

Yeah. Do you have any plans for future use or future? I guess not marketing, but if you have buildings that you would look to acquire, do you come up with ideas of how?

Joel Friedland: 48:27

to use them differently rather than just for manufacturing. Yeah, the one, the fruit juice concentrate, tampicos. We bought those buildings. There were three buildings and they have 1200 feet on the Chicago river and a really nice neighborhood and I think when their lease is up, some residential developer will buy it from us and put condos there, and so that's. It's called a change of use and it's probably the best way to make money in industrial. If you buy something for $10 million and it's industrial zoned and you can get the zoning changed and get a developer, it could be worth $20 million. So in a very short period of time I have a friend who bought a building for $3 million, so in a very short period of time. I have a friend who bought a building for$3 million in a terrible, terrible, scary, awful neighborhood where shootings took place and he took the risk $3 million and he sold it 10 years later for $35 million.

Marcus: 49:17

Wow, Nice yeah he took a risk.

Joel Friedland: 49:20

He took a risk, he went into an area that nobody wanted to ever go in and it the area turned it just, it just changed it, just all of a sudden, like the artists started showing up and the cool shops and the cool restaurants were edgy and they were in a, like people say, oh I don't want to go there to that restaurant, but then a bunch of restaurants and then a bunch of art, art galleries, and then the caterers start moving in and the florists. All of a sudden you've got like the coolest neighborhood in the city and it came from nowhere.

Dan: 49:54

Is it appropriate to label it hipster area or no? Yes, okay.

Joel Friedland: 50:02

Guys, I am going to go show a building I have to go yeah, okay. I have to go show a building to a potential tenant. Okay, anything else that you want to cover?

Marcus: 50:12

No, I was. I was just about to wrap it up Cause I know we were coming up on the hour, wanted to be respectful with your time and I know you got to finish up your Friday. So no, I appreciate it. We're definitely going to keep in touch. I mean, you're, you're the closest well, I won't say closest guests we've had, because I've had one in Wisconsin here, but with where you're at in your career, very successful, like I want to learn more from you personally, so call me anytime I'm available. My son always wants to take the train down to Chicago, so we'll we'll make our way down to Chicago and we'll come see you.

Joel Friedland: 50:49

Yeah, I'll take you on a tour of the goop building. That'd be awesome, and I'll give you some, some bottled fruit juices.

Marcus: 50:57

He's going to be ecstatic when I tell him we're going to go see goop.

Joel Friedland: 50:59

It's going to be ecstatic when I tell them we're going to go see Goop Goop. Yeah, so anyway, call me anytime, and we've got a website for reaching out. It's britpropertiescom. B-r-i-t-1-t. Britpropertiescom, and I do a lot of mentoring for people who want to try doing something new that I might have experienced with. I'm happy to do that.

Dan: 51:27

No, that would be awesome. I'm definitely going to pick your brain offline and maybe we can have you. Have you on in six, eight months, maybe a year, just to touch base again and redo this all over.

Joel Friedland: 51:33

If you're interested in doing okay, I would love to.

Dan: 51:35

That would be great sounds good, maybe we'll meet at the marina and have lunch right, right, right.

Joel Friedland: 51:40

That would be great I can get you a free lunch. I know the owner sweet.

Dan: 51:46

No, I appreciate the time.

Marcus: 51:47

Thank you so much. Uh, enjoy the snow that I think you're getting yeah, we, we do have it yeah yeah, um, but otherwise. Yeah, we'll keep in touch. Uh, we'll drop a link to your website in the show notes. So so, people that are listening can go check that out.

Joel Friedland: 52:02

Okay, great guys. Hey, this has been really fun. I'm glad that we did this.

Marcus: 52:07

Yeah, it was a great time. Thank you so much.

Joel Friedland: 52:09

Thanks Marcus, Thanks Dan, Bye.

Marcus: 52:14

See ya.