Emerging Trends in Real Estate 2024 | Nashville | Urban Land Institute

The ULI Emerging Trends report provides an annual glimpse into the minds of leading real estate experts. Join host Tyler Cauble as he and his guests analyze the top insights from over 1000 industry professionals surveyed - including where they see opportunities, risks, and key trends shaping real estate in 2024 and beyond. Get ahead of the curve and learn how to capitalize on data-driven forecasts from the professionals shaping the commercial real estate landscape this year!

Key Takeaways:

• Nashville was named #1 city for emerging trends for the third year in a row, which is unprecedented

• The city is investing billions of dollars in major projects like the Titans stadium, airport expansion, and East Bank redevelopment

• Mobility/transit is one of Nashville's biggest challenges as it continues to grow rapidly

• Office real estate is facing an existential crisis as work habits change, and will need to evolve significantly

• Nashville has a shortage of affordable/attainable housing that will take continued investment to address

Guest Bios:

Sheila Dial Barton, AIA, Principal | EOA Architects | Nashville, TN

Sheila Dial Barton AIA, LEED AP is a Principal with EOA Architects in Nashville, Tennessee. Founded in 1991, this regional design firm is known for its innovative approach to architectural practice, called humanizing design. EOA’s focus on sustainable and environmental design includes Nashville’s first LEED-Gold high-rise, The Pinnacle at Symphony Place, along with multiple LEED/sustainable projects throughout the Southeast including the $160M Tennessee State Museum. EOA’s current work includes the new Tennessee Performing Art Center (TPAC), the new Tennessee Titan’s Football Stadium, War Memorial and Legislative Plaza Building Renovations, and a new concourse at the Nashville International Airport.

Website - https://eoa-architects.com/

Instagram - https://www.instagram.com/eoaarchitects/

LinkedIn - https://www.linkedin.com/company/eoa-architects/

Brittney Rowe | Bellwether Enterprise | Nashville, TN

As a Senior Vice President in Bellwether’s Nashville office, Brittney has over 15 years of commercial real estate finance experience and adds value to her clients by providing financing solutions through all market cycles. She is highly trained in underwriting, structuring, negotiating, and closing complex financing transactions across an array of real estate asset classes and markets. Brittney has structured and closed capital transactions totaling more than $1 billion. This includes primarily debt investments in multifamily, industrial, retail and mixed- use projects with institutional investors such as life insurance companies, Fannie Mae, Freddie Mac, FHA, CMBS, debt funds and commercial banks. Brittney also advises clients in acquisitions, dispositions, investment analysis and loan modifications.

LinkedIn - https://www.linkedin.com/in/brittneyrowe

Website - https://www.bwe.com/people/Brittney-Rowe

Edward Henley III | Pillars Development | Nashville, TN

Edward Henley III is the Founding Principal and Project Executive of Pillars, a real estate firm based in Nashville, specializing in planning, development, project and construction management. Edward has over thirteen (13) years of experience in the municipal finance and real estate industry; primarily in public sector and institutional development, but also in affordable housing and neighborhood scale mixed use. Ten (10) of which have been at the helm of his firm Pillars, which he founded in 2013. He excels within large capital projects, where he coordinates numerous government agencies, project personnel, and architectural, engineering and construction firms. Edward is also experienced with, and passionate about, planning and community engagement. He lends his unique perspective to assist with market assessments, concept development and people centered use policies. As a result of his passion for community engagement, he lends his experience and advocacy for education and comprehensive planning to assist with facilitating and presenting in community and stakeholder engagement efforts; as well as developing implementation strategies.

Website - PillarsDevelopment.com

LinkedIn - www.linkedin.com/in/edwardhenley3

Instagram - @edwardhenley3

Twitter - @edwardhenley3_

Check out CRE Launch Pro: www.crelaunchpro.com

About Your Host:

Tyler Cauble, Founder & President of The Cauble Group, is a commercial real estate developer and investor based in East Nashville. He’s the best selling author of Open for Business: The Insider’s Guide to Leasing Commercial Real Estate and has focused his career on serving commercial real estate investors.

Episode Transcript:

0:00

This episode of the commercial real estate investor podcast is brought to you by cre launch Pro. This online commercial real estate program is designed to take you from beginner to pro commercial real estate investor with access to all of my courses, our online community and monthly group coaching calls. Learn how to confidently buy your first commercial property today at www dot c r e launch pro.com. Welcome back to the commercial real estate investor Podcast. Today we're coming at you hot from the cowboy group Studios here in Nashville, Tennessee coming off of the emerging trends report, the Urban Land Institute put on I've got quite the panel here today, which I'm really excited to have here with me. We have Ed Emily, the third founding principal and project executive at pillars. We have Sheila doll Barton principal with EUA architects and this year's president of the white national chapter or chair of the ULI national chapter, and Brittany rose, Senior Vice President at Bellwether enterprise. And today we're going to be talking about the emerging trends in commercial real estate and real estate in general and 2024. In Nashville, made number one for the third year in a row again, three p

1:09

three P. What were our analysis this morning, it was Chicago Bulls.

1:14

The Yankees Yankees,

1:17

and now Nashville, now Nashville

1:18

in the midst of a dynasty.

1:21

Pretty, pretty wild to think about because I think who was the last person the last city to do that was in San Francisco.

1:27

So I heard that. And I mean, I could totally be wrong. But this was the first time in the report in 45 years. So there's been two beats or twice wins, but never three. Pete, is that right? Correct.

1:39

In San Francisco was close. They had they were number one twice. And I think they were the top

1:44

three, top five. First time in 45 years. Yeah,

1:48

I was thinking about that. When I was going through this preparing for everything. And I looked at the past, you know, five years. And I saw San Francisco, you know, really up at the top. And then they I mean, they're not even the top ad anymore. We will

1:59

not have that same fate.

2:01

I would hope not. Yeah, I

2:03

think last year when when, when we got the second year in a row. I was like, oh, man, like and now you're handing it over to me because it was chair last year. And now, we said the only place to go was down? Oh, no, don't say that. No, we're going for four P next year. Oh, yeah. I mean, we talked about the challenges today to do that. Yeah. Which was important.

2:24

Well, let's, let's definitely get into the challenges in here in a minute. But let's talk about the positives. Why did Nashville three peat?

2:31

So I mean, it's a survey semi surveyed over 1000 individuals in you know, that are in the development community, a built environment. And I think they look at, you know, livability, they look at what's our, our jobs, numbers, what's, you know, do people want to invest? Is there equity? Can they can they invest? And I think that, you know, we got dinged on a few things, of course, things like transit, infrastructure, affordable affordability, so affordable housing, but we're still a market that people want to be in. And I think, you know, what we talked about today is even though there's a, you know, we've used the word reset not never never said recession. We said the other

3:15

R word that that you mentioned this

3:19

morning, which is more of a pause. I mean, I think people are seeing this as a pause. I mean, it's really hard. And I know you can, you know, we can talk about lending and you know, the strains of that, but we're faring so much better than the rest of the country.

3:36

I'll chime in the I think from a national perspective, one of the things again, you mentioned, it's a survey. So we had the fall meeting in LA about a week or so ago. And one of the topics that came up was another art word recovery. And one of the things that's being looked at heavily now is how our downtown urban cores recovering after COVID and kind of in this work from home, kind of post pandemic era. And what was found is that many of the cities that are faring the best their business districts are either in adjacent to or closely aligned to their entertainment district. And that just that just describes Nashville, right. And it describes Nashville really quite perfectly. And so when you have that type of attention on your urban core, and your urban core, comparatively, is still doing very well. And we've still got a lot of tower cranes swinging in. A lot of those cranes are for office, even though there's been some pauses and some different, maybe modifications to plans, you're still seeing office go forward here. And then you still have housing, you still have industrial so we still are, you know, the major food groups are still moving forward in Nashville. And so I think that's something that a lot of people's minds kind of propels Nashville steel to the top. Very few people you interact with that are just kind of, you know, I'm kind of bearish on Nashville, you just you still hear that right now People still bullish. A lot of people are still looking to enter the market. It's I think those are some of the things I think push Nashville to the top, when you look across the nation where some other areas are starting to cool off, and it's on people's minds, they're starting to pull away from them. And then the affordability piece, you know, yes, we're starting to definitely climb in terms of in terms of cost, average cost of homes, but we're still not San Jose, San Francisco, Boston, New York, Austin, there's a lot of those really big cities, I think we're still maybe slightly below Raleigh, as well, in terms of average housing costs. So when you look at our competitors, Sister Cities, we're still more affordable. That's right. And then you take the state income tax situation, or lack thereof into account for the state, and that all kind of still positions us well against competing cities. Yeah,

5:48

I mean, compared to 10 years ago, Nashville is not affordable, but you compare it to any Metro that it competes with. And we're probably a lot more affordable than anybody else on that list.

5:57

One of the conversations I was in this morning, before the presentation was about, okay, the market rate, multifamily developers have slowed, paused or just hit the brakes. But there are several affordable housing developers out there that although there's many more layers, there may be you know, 10, to 20, to 30 layers to their their financing package, they're still able to go get some of that financing and make make it work somehow. So I mean, we have to we have a project and design and a project that construction, that's completely affordable housing. And so I, maybe when other people are pausing or hesitant, it's really nice to see those projects move forward. Although, you know, we want to see, we want to see those in good times and bad times.

6:45

Right. Yeah, I think and you mentioned taking over as chair, this year that you were worried about the three P and last year we were talking about I one of my favorite comments was how Nashville is like a teenager. And it's growing pretty quickly. It's kind of in that awkward phase, it's not sure who it wants to becomes. But I think this pause has really been a benefit for us to your point. I mean, it's allowed us to kind of step back and take stock and look at the development community that's already come out of the ground and say, Okay, where are the sub hubs? Or how do we need to face these challenges? And we're recognizing those challenges. So the pause isn't terrible for us. And in some ways, before this report even came out, I was thinking to myself, we'll be the least worst off, right? We might not be the best, but we'll be the least worst off relatively. So it is all relative and everybody's facing a lot of these challenges, affordability. attainability is national, that's a national problem.

7:45

We've got a really funny question coming in value add, Mike is asking do all of your back's hurt from carrying the national economy? Appreciate it my, we need to see a chiropractor? Yeah, I mean, I completely agree. I think that, you know, it's just like reflecting on the pandemic. I actually really liked the slowdown, because it allowed me to take a step back and focus on the fundamentals. And I feel like Nashville is in very much the same spot where we've been going 100 miles an hour, for the last 10 years, and we haven't been able to catch up with ourselves. Yeah,

8:18

you must not have had small children.

8:23

I was my own small child.

8:25

Well, I think we mentioned it today that this came from a conversation last night, which was, you know, during the hard times, or the stressful times that we can reflect and say, Okay, how can we build better right now. And it was in the recession that we built the convention center. And, you know, coming out of the recession, I mean, look how Nashville exploded after getting that one. And then the hospitality market changed. And then our tourism changed. And so we're getting things from that. But we invested in ourselves in a downturn. And so I think we were also sort of talking about well, you know, use bank was one of the questions today. Well, an East Bank is, you know, is now the time to be taking the city taking on this enormous project. Well, now's the time to invest. And I know, Ed can sort of go on and on about, you know, we've really one of our channels, or one of our biggest challenges is infrastructure, and mobility. And we're gonna keep saying mobility instead of transit. But mobility and infrastructure. We've got to we've grown so fast, we have to invest back into our city, or we can't we can't keep going. Ed

9:35

could do the whole podcast on infrastructure land, let's

9:38

be honest. Actually, I do want to bring you in on that one. And I mean, let's talk about the infrastructure real quick, because I feel like a lot of people out there don't understand how not keeping up with your infrastructural systems can really hamstring a city. So can you talk about where Nashville is and where we're trying to get it to?

9:55

Yeah, absolutely. I think it's it's you teed it up? Well, you know, We've been on this breakneck pace, right for almost a decade now just growing in again, growing comparative to our size. I think that's just part of the conversation, you have to always bring into things into frame and its context, when you talk about infrastructure, it's not that the city growing is a bad thing. It's just relative pace of growth within the infrastructure that it takes to keep up with that growth. And so many projects and large projects have happened in our urban core, but also, so many of our corridors and these new nodes are growing. And our infrastructure is it's one big network, right. And that's the thing I think a lot people don't get is, you know, our transit network, it also kind of flows with our utility networks, and we have a lot of parts of the city, you know, so when you zoom out on Nashville, and you look at the county, it's still majority green. And it's a beautiful thing about Nashville, I think it's why so many people love it, I mean, you can drive, you know, used to be 1015 minutes in one direction. And your it feels so rural, for a city that has so much to offer from an urban context. And so what that means, though, is that all of our infrastructure hasn't really made it to all of those parts of the city in the county, but then also in our urban core, the pace of growth, our city hasn't kept up with that we have invested in ourselves. But it's a really difficult challenge to do that across all of your utility networks. And then we have some of our fastest growing communities. I'll mention ENIAC, because I know they're experiencing it, you know, they're starting to, at the front end, kind of face some of those challenges with the power grid. Right. And these are things we hear a lot about, maybe in states like Texas, and you start having that, that sprawl growth. Nashville didn't isn't necessarily you know, averse to sprawl, right, we've spread out. And now we're starting to have that growth in all these areas. But again, one network. And so I think, you know, one thing you mentioned this pause, I think, I'm also a planning commissioner and being able to see the city start to really take this opportunity to look at how to stitch all these things together. I know we have a massive undertaking in our in our combined sewer networks and our water network. But when we mentioned the east bank, you know, that is a project to really continue to city build. And the core of that is mobility and connectivity. We've got to thread a city together that's really dissected by a river and a lot of interstate infrastructure that is just experiencing massive growth. And we've got to make sure that we're making, we're making transit in there because, you know, we talked about the jobs. We talked about the livability and the desire to be in Nashville. I mean, we were rated the worst transit city. Right? I don't

12:33

understand that. Like, how are we worse than it Lanta? How I would like to see an

12:40

option, this option. You're in a car. But we're still.

12:45

We're still kind of riding a bike playing Frogger and tracks,

12:49

right? Well, yeah. You're pedestrian on a sidewalk that doesn't connect. Yeah. So that's our that's our challenge.

12:56

We were driving up and down Dickerson pike the other day, and my girlfriend was like, Can you believe I used to run on the street? I was like, where? Yeah, there's no place to run and running and traffic. Yeah,

13:06

that was the most like jaw dropping thing to me when I moved here from Memphis. And I started driving the neighborhoods. And I was like, Where? Where are the sidewalks? There are no sidewalks, there is no sidewalk in my neighborhood. It was It was shocking, really, it goes

13:21

back to their lack of infrastructure. Right. And again, it's just these networks, they work learn each other. And, you know, we've been able to build fantastic new projects of all types. But those things are just being kind of filled in. And that kind of overarching network isn't working in tandem with it. Some of that's because this growth just wasn't planned. I mean, who would have planned for the supernova of Nashville, right? No, no one would have really believed you if you said it a few years ago. But I do think that there's still some lessons to be learned that we should have done a better a better job of planning, we should have seen some of the writing's on the wall. And I always say, you know, now we have a really good opportunity of capturing the lightning in a jar. And we've got to point it in focus it. And I think infrastructure is just that place that needs to happen. And it's unfortunately not sexy, but is going to be the most needed type of investment our city has to make, especially when you think about three PT is number one, looking at a four P and just honestly looking at the trajectory of the city, no matter where we're ranked, but just to keep the city vibrant, in a place where a lot of people feel comfortable living and working. This

14:29

is why I love that y'all are both on the east bank involved with East Bank because you have such a history here and such a knowledge of where we we've come from, which is important. I mean, it's important, like you mentioned there's we didn't know that we were going to need this. So why would we have invested in that, you know, 10 years ago? I'm excited for what you guys are going to do it?

14:55

Yeah, I mean, you'll have the opportunity to basically design a central business district as it should would have been designed. Right? I mean, that's what's exciting to me.

15:03

I think, you know, every so our product, I think at AOA, our projects are about community focused. And so, you know, again, just we're a small part of the east bank, but I do think, you know, the east bank is is creating a community community is creating a neighborhood. It's not, the goal is not to create, you know, entertainment district, it's not repeating downtown, which I get excited about, because how often in the in the country or in the world do you actually get it create something from scratch from an industrial area that can be focused on community. And so it's so close to the urban core already close to downtown. And I mean, and you've got a historic neighborhood adjacent, you can tie it into the greenways. So there's mobility options, there's transit options, there's everything that you could imagine, could be brought into that area. So it's really I mean, it's right next door to our office. I mean, right. Right in the middle of it.

16:02

As an investor on Dickerson, Pike, thank you. Yeah.

16:04

That's, you know, that's okay. You've got another 20 years to construct that I mean, Dickerson Pike is one of those places exploding too. I mean, that just how I think we looked at Wedgewood Houston 10 years ago, I think that's Dickerson pike. So in 10 years, you won't recognize what Dickerson Pike is because of all of the development that's going to be going in. And I know that you know, this pause is sort of reset some of that, but it's still going to happen. I mean, it's amazing quarter to be on.

16:32

Yeah, I mean, one of the one of the headlines in the report is itching to buy. Yeah, I mean, there are investors that are itching to buy people still want to be spending this capital. It's not that all of a sudden this money has gone nowhere. Everybody's just pulling back and and kind of like they said, you know, your core investors are waiting for interest rates to come down. Your value add investors are waiting for more opportunistic buy scenarios, your buy still they're wanting to move into Nashville? Yeah, yeah.

17:00

And the you know, this is different, we're not going to call it the big R word. But that the reset like this is different from other periods, because there's still liquidity. And let's take out office of the discussion, but there's still the property fundamentals are still strong. And that hasn't been the case. And in other periods like this, you know, there's, I'm not sure how much opportunistic investment there's going to be and, you know, multifamily per se here. I mean, I just I think there's so much money out there that's wanting to smell blood in the water. And I just don't know that we're gonna get there in Nashville. Knock on wood. Let's hope that's correct. But But yeah, there's there's liquidity out there. For sure. Yeah.

17:41

I mean, I have a hard time seeing how there becomes blood in the water with with apartments. I mean, they were talking about how, you know, they're, I mean, there's over 600,000 apartment units that are going to be delivered in 2024, across the country. And Nashville still doesn't have enough to remotely keep up with the people that are moving here. What a while and to provide enough to even start chipping away at affordable housing. Affordable housing came up quite a bit today. Yes. That is the number one issue. Yeah.

18:09

And I don't even know that, like, I wish we would almost call it attainable housing, right? Because I think people hear affordable housing and they think, Section eight or but that's not even the case here. I mean, we're talking about attainable housing for people with good incomes that are trying to live near their job. I mean, it's not, you know, it's not your dad, Section Eight project that we're talking

18:34

about here, you know, and correct me if I'm wrong on the stat here, but you know, over half of Nashville hits the 80% Ami, so average median income. So over half of Nashville, which is, you know, one and two people out here are in the 80% range. And so when we're building 80%, ami, housing is for all of us, it's not for, you know, when you get into the 60%, you get into, you know, even lower than that, then you start getting into much more affordable housing, but the 80%, ami is for the average nashvillian. So, you know, we have to keep building that. And, you know, a big discussion on the panel today was, okay, well, if the numbers don't pencil for a regular market rate project right now, how are they going to pencil for affordable, and you have to have the incentives, you have to have federal state local money. And on top of that, some sort of different incentive. And, you know, one of our panelists saying that, well, they're still building and they're still planning because, you know, they have investment already, they already own the land or the land was at a low price or whatever, you know, so it's a different type of investment, and they're in the planning phases. And we're probably going to have a different outlook one to two years from now than we have at this moment. But I think there's a lot of people and we're seeing it in our office, there's a lot of people still planning, so we're still designing multifamily projects. Not as much Any, but we're still in the design phase for quite a few. And I think that gives me hope that people are looking beyond the now and looking into the 2024 2025 of when these are going to go construction online. So it's a little bit different. But we did, we did sort of flood the market with a lot of housing in the past five years. For a while, we still need some more, right, there's a lot of properties with, you know, a lower occupancy, because we flooded so quickly, and then there are now starting to see concessions that we never saw in Nashville before,

20:35

right? Yeah, well, I feel like I heard somebody on a panel last week that's got a significant amount of the units. I think it's 15,000. And, you know, core downtown, under in lease up phase, and he was saying, you know, based on their leasing velocity, that their units are 15 months out, and their primary goal is getting heads and beds. So I can't tell you how many lenders I've had conversations with about oversupply in the market. And should we be concerned and when you look back at when the development actually started in downtown Nashville, relative to the rest of the country, we've had a lot of ketchup. So it just feels like this very short term. Maybe you're 15 months, there's gonna be one to two month concessions. But I'm just hard pressed to think that that doesn't get absorbed. And in Nashville continuously since I've been covering this market or living in this market. It's this constant back and forth of we don't have enough, we don't have enough, we have too much. Whoa, slow get off the brakes. We've got like, can we just balance a little bit here, but I think

21:35

I think it's important to put it in perspective to that a 15 month lease up for a new 200 250 unit apartment complex, historically, is pretty good. Yeah. Okay. You know, like, good. That's good to hear. Yeah, no, that's still good. I mean, you know, working 2020 2122 It was very common to see I mean, we did it, we did a project, it was a motel two apartment conversion where we signed 126 leases in six months. That's unheard of. I mean, you don't do that. That's not supposed to happen. Yeah. I mean, it's

22:08

so really interesting, because the square footage is so small, so the rent is high, but they're really actually affordable. They're actually attainable,

22:15

right? It's they were 216 square feet. And we were renting them out for 900 bucks a month gross living. But I mean, if you think about it, like compared to everything else in Nashville for a relatively new construction unit, that's, that's affordable, right. But

22:30

I will say the reason we have such a catch up and downtown is because when I first moved here, it was illegal to live downtown. Right. So we weren't so for people to have residential in the downtown core. So it's crazy that a city would do that. But finally, you know, we approved zoning for residential. And then we started having I mean, I think, you know, Tony's Cumberland, you know, high rise was probably the first high rise we had whether it was your residential downtown. And I mean, that was, what 15 to 18 years ago. And when

23:01

you look at verse one, right, and when you look at the supply coming online, and that context, the historical context, it's it changes, it changes the conversation, because 15,000 units in downtown core in any other market is going to be hard to absorb. But it's just, I don't think that's the case here.

23:20

Yeah, well, I think there's you know, and there's several studies on this, and I don't want to misquote figures, but you know, there is a amount based on just the size of your downtown, the amount of residences that you want to have to have a healthy, vibrant, kind of complete downtown, that allows you to service, you know, one that balance between your households and residences, as well as all of the vitality that you want to see in terms of commerce and types of cultural activities, and all those things that, again, make you want to live in a place. And the you know, the proverbial terms get thrown around now a lot is the doom loop, right? Where you have this vacate this vacancy, this pure evacuation from office in the urban core, and what that does to your tax base, and how that also cannibalizes businesses, and then those businesses leave and your tax base drops again. And one thing that really kind of combat that is having those residences in downtown, right, people are living there, because they probably don't mind walking to work, because that commutes easier, and they also patron, all of those businesses that don't have to run purely on Office in Nashville. While we're growing. That's one of the things that we don't really have to worry about. And I think that's why we can you know, as we're a city, that's number one, and 2024 we can like, look at what everyone else is struggling with or fearing, or what their nightmares are about and like take that into consideration when we're planning a new district. And again, I don't think it'd be a central business district because I think we've we've got that and again, you know, the writing on the wall is business districts have to shift anyway. But I mean, how Fortunate are we to be building in the downtown area with that knowledge, right? Like our core infrastructure, our core planning is built on, hey, maybe office isn't what you anchor everything around. And hence, that's what we're doing eastmain Because it's much more about building a neighborhood that's around entertainment and culture and that connectivity. And I think it's kind of that hub of an entire city,

25:23

that many people want to live in those areas. Right. I mean, that's, that's the biggest issue with with Nashville's downtown right now is it's either office or honky tonks. There's almost no in between. Right. And that's caused a lot of issues for for some of the office tenants, you know, you've got some really big names past bury pinnacle, these groups moving out of the central business district. Yeah. Because they don't want to deal with it anymore. But I also kind of look at it and go, well, that's kind of a positive thing, right? I mean, maybe downtown's going into his new evolution. And maybe I'm totally wrong. But you know, now we've started referring to it as entertainment district. Right, you know, and I, for one would love to see a 60 story hockey talk.

26:02

If anywhere in the world.

26:07

Yeah, we're getting the grocery stores down. I mean, they're smaller. But you know, we're, we're finally getting the grocery stores, we're finally getting all the amenities you need for to actually live downtown, we're finally getting those. We need more daycare options. We need other things that would be a support system for the residents. But we're I mean, we're, I've been here 26 years, by far, much better than we used to be. So used to it was you had some office? And then you had you had the entertainment. And that was it. There were no amenities. So thankfully, people can now live there.

26:41

Somebody on the panel mentioned this morning, it's a logistics problem. And I thought that was pretty well said, because I feel like probably pre mean, moving here. It was a lot of pushback on the way downtown was evolving. And I feel like now we're just embracing it. Like you said, it's an entertainment district now. So, you know, let's let it be what it is. It has its identity, and it generates

27:06

a lot of income. Yes, a lot of income. Yes, well out of income tax. I mean, that's, you know, helping really carry the state right now.

27:13

And I think that was mentioned on a panel today that, you know, we, if we want more affordable housing, we are sometimes we're going down on density. And it may be not as large a project if it's an affordable housing project versus a market rate housing project. So we are sort of deferring or delaying or, you know, missing some of that tax base by doing more affordable, but it's something that our city has to have. So what's the impact? And I know Business Journal ran several stories on this the tax basis of affordable housing versus market rate or office or other things. But we have to have that to have a true neighborhood. You know, the downtown, can you imagine downtown workers actually being able to live near downtown to go to their job downtown, less cars on the street? I mean, it was it's a win win for everyone. It would solve

28:02

the biggest pain point that workers at companies Downtown have, which is dealing with the traffic and the nightmare of tourism. Yeah, I mean, if you were able to just walk two blocks, it'd be great. I mean, that's why the five of five was great. I mean, there's there's so many great projects that are coming online down there that are selling out quick, or they're leasing up quickly. One thing I want to dive into is office, I mean, we're already kind of talking about it. But let's, let's go ahead and address the elephant in the room. It was kind of surprising to me, because it didn't seem like the overall sentiment. Now there's obviously a lot of office deals that are struggling. But the overall sentiment didn't seem too bad on office, I was surprised by the statistic that work from home employees have only gone up from about 10% and 2019. To just under 20%. Today. mean by headlines you would think now over 50% of employees are working from home right now. Nobody's going into the office, this isn't happening.

28:59

Does that include the hybrid? Like? So? Is that the you know, I feel like there's just this massive number of people working three days. Yeah. So it's, it's I don't know, if it's fully capturing, like, how many people are in the office Monday to Friday? You know, eight to five? Probably

29:18

not as many. But I think it depends on your industry. Right. Yeah.

29:21

I mean, I think this was a topic that came up quite a bit and it comes up at the national level. It's, you know, when people are looking at metrics, right, and you know, office use Office use efficiency, you know, how many people are swiping in or badging in or fobbing in based on the use of the office space in? I think, I think, to your point, it's, they're not exclusively work from home or working remotely. And so therefore, you still have that space and you still have that utilization. And again, you know, one, one point that I've made is, I think people in Nashville go downtown to the office when they know there's something else they want to do. Right? Like it's like, oh, well, that's right. I have I have this social event after work on Tuesday, so I'm gonna go in, won't really complain about it because it's not the nine to five time period I'm planning for it's the breakfast or whatever on the front end, or the evening event on the on the back end. And that's what's making it okay for me to go in, if not, I'd be grumbling all the way to work. And again, you know, having that interwoven pneus of an entertainment district, an area where there is the opportunity to see a show, five, seven nights a week, right in Nashville, and you're like, hey, you know, going downtown, while the work that commute to work is not exciting, or enthralling, and I don't like this, I would still make this trip because there is an active center that I would go to. And I think that's something that when we talk about what's kind of separating Nashville from other places, I think that's it now, what does that mean for the, you know, the tenant, right, the decision maker on on where they want their office, I think people are really more so looking at vacating fully, they're downsizing, or trying to, you know, get the nicer, newer office space, that is a smaller footprint, that kind of works, and kind of checks more boxes, because you know, every CFO or whoever is responsible for finances, and the company is trying to shrink that bottom line all the time, regardless of if we had a pandemic or not. And one thing that's just like hitting them in the face is that the office isn't full. But it doesn't mean the office space isn't valuable, it doesn't mean that you don't need it, you just may need it lists, or you may use it differently.

31:35

Yeah, I think it depends on the industry. I mean, we don't do a lot of Office projects, we do a lot of mixed use projects. But I will say that, you know, when you're when one of your top employers in the in the city is the state government. And so when they, it was mentioned today, when they went home for, you know, the pandemic, they went home permanently. So I mean, they lot the majority of the state workers, because we work with the state a lot, they're working from home, and it's a better model for them, they have less real estate, they're able to consolidate, and you know, in, they're still getting their work done. So I'm not saying every state employee isn't going in, I'm just saying a lot of them are working from home. And when you have the majority of them in the downtown core, it changes how many people you have. So, you know, we're a hybrid and our office, we're a hybrid work model. So I mean, we're Monday, Friday, optional work from home. And I think it you know, I think it works for us. I don't think it works in every industry. But I mean, we're a very collaborative sort of industry and architecture design. So I think we have to have that one on one time. But there's also time that we can we can be very productive from home. So I think it depends on where you are and what you're doing. But I don't think there are developers out there right now that are wanting to build another office tower in Nashville, for sure. I don't think anyone's going to finance it. And I don't think anyone's going to build it. Now. Does it mean they want a year from now? Maybe? You know, things change, but I don't see I don't see people knocking down the doors to build an office tower.

33:11

Yeah, I think the problem with Office is that it's, you know, I say this about commercial real estate all the time. It's stuck in the 80s. Right, like it honestly is, I mean, Office has not changed, you look at what has multifamily has gone through over the last 1015 years. I mean, apartments are entirely different today than they were, you know, back in the early 2000s. Same with retail. I mean, retail has undergone its shift office, just an even industrial, right, like everybody else has evolved. Except for Office.

33:39

Right? Yeah, it's an existential crisis right now. And I think it's gonna be so interesting. And I know you've done this on some previous podcast and I've seen some information on it, but you've seen the future of office. But it's gonna be it's gonna be interesting to see you know, what happens to these assets. I mean, we hear so much about these office to multifamily conversion at one point I read an article that said one in three office buildings are prime for multifamily conversion, no way there's no way there's no way I just don't understand that but then at the same time doesn't work you hear I remember Janet from Colliers who moderated the panel this morning had mentioned you know, we're going to come out of this and we're going to be natural is going to be underweight on class wa office.

34:22

I thought that was really interesting. Yes. So said that before it's

34:25

it's like Okay, so we're gonna be underweight on class double A and then you see all of this kind of suburban office going more granular because of what you mentioned, Ed, and then you know, you're gonna have some of this office to multi conversion. I am not creative enough to know what that looks like. But you know, you're gonna see some stuff get scrapped, but all it's going through this evolution, nobody knows what office is right now are going to become right. And I think you're just gonna see a bifurcation much like you're seeing and other asset classes will be interesting.

34:57

Maryland Farms is a perfect case study of how to do Office wrong. I mean, I think like, seriously, I mean, I'm probably gonna offend somebody, I'm sure. But look, you drive through Maryland farms, you can't differentiate any of the office buildings. I've tried going out to businesses there before. And if I didn't have GPS, I would be so confused. There's nothing that differentiates any of those offices. The problem is Brentwood doesn't have any multifamily zoning. And that whole area would be prime for multifamily redevelopment, but they don't want to do it. I mean, what happens to these suburban office parks like that? Well,

35:28

let's be honest, you are not the tenant that they are after. It's fair, it's not in Maryland far.

35:38

A couple of too many tattoos.

35:40

I mean, that's the lack of of mixed use. And I think what is making neighborhoods like Wedgewood Houston and East Nashville, so interesting in Germantown is the true meaning of mixed use. And I you know, as I said, we do a lot of mixed use buildings that are very heavy on on apartment or condo or, or things but the apartment model is that you can you can get in and your amenities can be very flexible, and your ground floor can be completely flexible. So whether you want to do it as a live work, a flex space, a retail space, it can pivot to where you want it to be, it can be a retail space this year, it can be an office space next year, the live work can be you know, on a downturn where you're not getting any retail, it can go straight to live, but you're still enlivening the ground floor, which is what we want to do in a true mixed use in a real successful neighborhood. So I like the spaces that can pivot. And we're also building a lot more amenities that are co work. So different versions of CO work, whether it's the conference space, it's the individual, it's the group, we're just doing that in all of our apartment projects right now. So I think, you know, people pivoted from going to work, and now they're working from home, but they don't want to work from home and be there by themselves. So they're in this communal, communal space, but they're not downtown,

37:03

you still want to be around other people. And I think there's a lot of power in shifting your space to shift your mind. I could not work from my house now. And then just shut my laptop and think that everything's good. Like I would be so much in that work mindset. I couldn't get out of it. Yeah, I

37:19

mean, I think one thing, too, we're thinking about, and I love what you said about office, I think it's absolutely right, in terms of it just not morphing and modifying with the rest of the rest asset types. And, you know, I think the future is out there already, too, right? It's, it's kind of turned innovation districts where you start to see, you know, you have the anchor institution, regardless of what it is. And it's starting to kind of modify its fringes or just picking a truly new location. And you kind of have the, necessarily the anchor tenant and a tall office building, but you have the kind of the anchor foundation around it, and you're giving a path of progression, right. And so you have your scrappy entrepreneurial businesses to kind of your mid tier businesses to your kind of prestigious, they probably can take up a few floors, or even have their name on a building, but they understand the value of being in this space. Because what do they want, they really want to be productive, innovative, and share talent, and be able to grab that and create those spaces. And it's almost like Office has to take what it's been forcing itself to try to do inside the four walls. And like open it up and say actually, this is how you do it, that public realm and that open space, that's where that creativity is going to happen. That's where you're going to get those, you know, freshly graduated, students are kind of newly trained, and just or even, you know, the future skill set that are doing AI and all the tech stuff, and you put them in the same pace place with the gray hairs and they are going to interact. But they're going to do it in a way. That's not just this very hierarchical structure of corner office versus cubicle, it's got to be much more dynamic than that. And again, the masses are coming in from the younger age. And that doesn't work anymore. Which is why I think just like anything we've been talking about, you know, this 15 to 20 month reset, like, you're not going to feel it until two or three years from now, right? Anything you feel that stops financing and construction of projects, you're not going to feel it in the moment like you do. But what you're really going to do is see that echo throughout, you know, the next 1015 years. And I feel like the areas that are really booming, a lot of them are tied to healthcare, or educational institutions or tech. Right. And that's because they're looking at so many different segments. They're trying to, you know, articulate what their mission is in the built environment. And office just has never done that. And it's got a shift to it. And when you start seeing more of that, which is why I think we're gonna have a fun time on East Bank. And maybe that's why Oracle's looking at what they're doing a little bit different on River North, is the space has to start to speak to people and I think Tony, you said it. You go to Maryland forums. I don't even know what I'm doing here and it feels like I should. I should leave it alone. Have you ever wondered? Well, I mean, people have brought it up. It's a good example. I think it's good example.

40:06

Well, I think that's a brilliant way of putting it, because you mentioned how office needs to get out of its four walls, I think that flexibility is going to be key moving forward, because a lot of office is so permanent. You know, like, I mean, we're looking at these walls right now, like, I can't expand my studio without tearing out a bunch of walls doing some construction. I mean, it would have, it could have been designed in a much better way, using a modular wall system or something to that extent, to where I could easily just collapse that down, expand this out. And, you know, I could accommodate, you know, a meeting room in here, if I was going to host a bunch of people for a day or, you know, whatever that is, I think that that's the biggest issue in office is that the way that we work have changed, but the place that we work is not?

40:47

Well, that's why I'm anxious, you mentioned it, that's why I'm anxious to see how Oracle is going to pivot and how their campus is going to change after, you know, they had a pause because they were able to sort of rethink it during the pandemic. Okay, how's it gonna come back different? And how's it gonna come back better? And is it more community focused? Is it more green focused? Is it flexibilities built in? So it'd be interesting to see what happens.

41:10

Yeah, I'm really excited to see them, get them on a podcast. I'm on it. You might know somebody you want to me up. So we mentioned mobility earlier. And, you know, that is that is probably the number one thing that Nashville has going against it not just from, you know, the city's growth perspective. But that's also holding us back from, you know, originally landing the Amazon headquarters when they were on the search a few years ago, it's likely keeping a Super Bowl from Nashville for the time being right. Because, you know, once we have the new stadium, we'll have a whole new mobility district, it'll be a little bit different. And of course, Nashville is just, for whatever reason, we keep voting down transit options. What I'm really excited about is that Mayor Freddy O'Connell, one of his primary goals, during his term in office is to fix or at least start the process of mobility in Nashville. What do you think's gonna happen during his term over the next four years?

42:13

I feel like Jimmy Granberry said it this morning that, you know, the previous votes that have come before the citizens, he didn't even really like the plan. And, but he and he's one of the first people you would think of to be supportive of a mobility and infrastructure plan. So I think it's going to be so important as to how palatable is it? How financeable is it like what, you know, you've you've they've mentioned it this morning to you saw this, and in Austin and Austin, you know, they voted it through and then realized, oh, it's double the cost, and we can't fund it. Right. Um, but I feel like I feel fingers crossed this time might be the time for us, because we've learned from our mistakes along the way, in this process.

43:02

I think the biggest thing we did to shoot ourselves in the foot on the last one was do an underground tunnel.

43:08

Yeah, that was mentioned several times. I mean, you know, we're not going to put a tunnel under Broadway, I think, you know, and it was mentioned this morning, let's just start with something easy. And maybe this isn't easy. But let's start with a route that goes from the airport to downtown. Right, let's get, you know, 70% of those people that come in from the airport that are tourist, let's get them off the roads because they don't need a car, their destination is downtown. So are the neighborhoods and

43:35

oh, by the way, bna, could share in that cost? Right? Yeah, he

43:39

didn't say that. But I mean, I do think that's something that we can, you know, that's a that's a step that people will see the congestion on 40 Go down. So and then there are some easier things we could do. And I mean, I have to say, you know, mobility is everything. And so, you know, I get so excited every time I go down to well, South now with the complete street. Oh, well. So having a street that has the dedicated bike lane, the separated pedestrian, we've got the stormwater infrastructure. I mean, it excites me that we can do things like that. And it took a while and it probably took a lot of coordination. But imagine if Dickerson went to that imagine if Trinity went to that imagine if Main Street went to that, I mean, throughout our city, we would be such a better city if we could connect the get the pedestrians where they're supposed to be get the get the bikes where they're supposed to be and protected, at the same time allocating a space for cars. And even Janet mentioned, you know, it doesn't if you're sitting on a bus, and you're sitting in the same traffic that you would as a car, you're not going to ride the bus. So let's get some dedicated lanes for the buses. So does

44:49

that not does that actually decrease your time or is that just increasing everybody else's traffic?

44:54

relatively, you know what I mean? But but that was part of that was Part of the previous transit plan was dedicated bus lanes. Sure. And so I mean, those were things we, I think what happened is we lumped it all together. Yeah. And it's very ambitious. It was very ambitious. And we could now start to look at these individual pieces that would make the city better as a whole.

45:17

Yeah. So in, you know, a couple of things come to mind. So I'll try to keep these succinct, but I think, in all development, but one of the first things always comes to mind is, you know, perfect is the enemy of progress. And, you know, we have a city that isn't quite educated on all the different modes and benefits of transit, because we've never had it. I think you mentioned it, right. I mean, we just didn't have sidewalks like, we didn't have the basic thing that said, Hey, it's okay to walk here. So when you think outside of the car, we've been built out of such a car centric city, I mean, our downtown, our sidewalks are tiny, you know, hub and spoke system that people don't really understand the value of a hub and spoke. That's why people don't use it properly. You know, we work with state, you have 840 trucks to come directly into the heart of urban core, like there's an education that needs to happen. But I do think there's also the value of saying, Hey, we've got to start with something, and like, not only deliver, but like over deliver, like, instead of saying we got to throw a lot of money at everything, we got to throw a pretty sizable amount of money at one of the first two things. And like, do it so well. Because one of the first, I guess one of the main measurements of the investment in transit is ridership. And most people's experience with our current bus system is doesn't work takes too long. And so it's like, Well, if your answer is dedicated bus lanes, you're saying you're going to take more right of way. We're pretty strong property rights. City State, it doesn't matter, like people don't want their property encroached upon, and then to to do what with it? And your answer is to put a bust in our cognitive associated with the buses, crappy thing that doesn't go fast enough, right. And so we've got to like really start to improve, what is our base function, which is we have a bus bus just becomes a stellar performing asset, like our bus system for our city, just, I mean, make it home, and then continue the network that we talked about what complete streets and you know, there's a education on that too. But I think when you can start to just do those few things, and like, show that the city is so committed to their success, people believe in you, you got to build that trust factor. If you believe in you to do that next thing you say, and then you can I mean, it can be part of a really big ambitious plan. But you got to show that path to that plan. And I think that's where we lose a lot of people. It's either it's not enough, or it's way too big. And there isn't a way to kind of get people in the middle say, Well, here's the whole plan. It is a big plan. And we we understand how important transit is. But here's where we're going to start. We're gonna do that so well, that you will start asking for the rest of it. I think that's the approach, I think, and I think this may only administration can seize that we've got to start Biden at that Apple and got to do it pretty intensively where they're not as big buys or small bites to be determined, but it has to be happening at this time.

48:01

So is that is that number one? Is that the first thing they they put money towards? dedicated bus? Yeah,

48:08

I mean, that's,

48:08

I mean, essentially have inside knowledge.

48:10

I can just speak to these make, I mean, the east bank and that corridor, the Boulevard is supposed to go there. I mean, it is the city's I think the east bank period, as I've described it, and maybe others have, I think it's the proving ground for the city. Right, anything you say you're going to do will exhibit A should be there. And so when you talk about having a transit hub, when you talk about a connectivity hub, when you talk about having bus rapid transit with a dedicated lane, when you talk about Greenway connectivity, bridge building to kind of braid our city together across the river, like all of that has to happen now happen there. And so again, it's not going to be inexpensive. National has an issue with big numbers, it's not gonna be an expensive. And so whether you did a crappy job or a good job, it's still gonna cost you some money, might as well do a really good job. And I think as Nashville gets to the point where people start to say, Okay, you said you were going to do it, that was the place to look. And you know what, when I when I go downtown to a Titans game now it's actually not, it's not that bad. Like, like, if you gave me this bus now on the Gallatin corridor, I might write it. But that connotation can shift because right now, what people know, they're dissatisfied with,

49:17

how do you go about educating neighborhoods, communities, metro areas, that this is actually for their benefit, because, you know, there was so much opposition to 12 south when it started coming down to adding the bike lanes increasing sidewalks slowing down traffic, and it has caused that neighborhood to absolutely Bill,

49:40

what was there? I mean, who was opposing because I mean, I live near there. I didn't hear I didn't hear people opposing but it was it the commercial businesses opposing or was it the resident

49:51

it was more of the residents or was it it will end not even necessarily residents but people that wanted to pass through 1212 avenues out the downs

49:58

not to talk to you Yeah, they

50:01

avoided us. I mean, same thing happened on Eighth Avenue southward actually got shot down. Yes.

50:05

Yeah, right. Yeah, you're right. You're right. Yeah. Again, our hub

50:08

and spoke system is seen as highways. And it's not really that. I think I think one of the main things to do, and I think we've done a good job with 12, to be able to point at an example. And so now we have a local example. Again, it's going to be stewarded well over the next two years, as it's talked about, I hope so. Right? Because again, are you going to do is give someone an at home version of, you know, critiquing, and you want to limit their critiques, but I think it's make days where I think you know, a miracle, kind of encourage the city to do it. Like, let's all see how we can commute to my inauguration speech, not using a car, like let's like, let's do it, and then let's, but then let's talk about it. Right, it's not just do it and never mentioned it again. It's okay. Well, tell me all the things that have worked, like what worked, what didn't because I'm working on it. When people see that from your leadership, I think people say, okay, when you're challenging me to critique it, and I'm ready, right, so like, whatever way you did, but you got to get people to buy into the conversation, whether it's the, you know, the grumpy old guy in the back room with his arms folded, it's just waiting for the time horse to advocate who's already navigate, but you got to create that forum. And I think you started that already. So

51:19

what the one really criticism of God is, and I love to use this as a project. And as a, you know, everything it does for Nashville is that we don't have a great transit option to get to the stadium. And so, you know, we are congesting a single family residential neighborhood and the majority of the border of it with all these cars that could be avoided if we had a better transit option. Yeah, no, that was the master plan. I know it was supposed to go there. We

51:48

just didn't get anything else. Right. We cart before the horse, right? Yeah, that's all of this. Put the horse in the front. I

51:55

mean, it's probably a controversial take on my part. But I think that it's helping push forward the narrative as to why we need better transit. Oh, yeah, you have to put things like that, that are futuristic. I mean, it's, you know, on a much, much smaller scale the washers the same way. Like I got a lot of people saying, you know, we were going to open that up that there's no way anybody's gonna go to that you don't have any parking. I was like, Look at Sadko man. Sacco has been there for 25 years and no parking. And I still go all the time.

52:21

There. You're just, yeah, every place on 12. South, there's no parking.

52:25

It's terrible. We've got a comment from Jessica on Maryland Farms is a space that's great for a mature conservative crowd.

52:34

That would be mortgage bankers, and mortgage

52:37

bankers. She's saying how close are we to the comprehensive 2040 National master plan?

52:45

I would so this is this is coming from a planning commissioner, I think we're not that close. And I honestly think Nashville has to pivot from almost any significant large scale plan and not pivot is in toss it out. I don't mean that. But pivot is in we've got to open those up and digest them with new lenses, because Nashville is not the Nashville that anybody projected, it would be at that time, and to not take into consideration what's happening now. And trying to push forward with those plans. It's I just don't think it's advisable. Now, I think there's great opportunity to do what I say where there's, you capture the lightning. And there's some things that are in those plans. There. They were, they were done, residents there, there's there's a lot of value in them. There's some things that should be grabbed and accelerated. And I love what you said, like this, you have destinations now you can accelerate certain things. I love this, the story from Dallas. And they talked about their dark system, which is a regional system, which I think national is got to get outside of its its four walls, but it's county lines. So really get to a good transit system that we need. But it's you've got to put things that are out there to create that that kind of that dumb that dumbbell right? People are willing to ride it because they know where they're going. I think the same thing has happened with our plans, we've got to put plans that are attainable in the short period of time, because politically political will, financial support has to come for them kind of right now. And so they've got to be something that I think people can really see in short order, and doesn't mean that we abandon those plans. I think there's a lot of things in there that need to be kind of re curated or re curated and refined. But I don't think we're far away from you know, being able to achieve that. I just don't know if is it right, anymore? Right. Yeah.

54:30

I mean, that's, that's the the tough thing about putting plans together like that is I mean, especially in today's age, I mean, the way that I have worked is entirely different than it was last year, just because Chechi Beatty blew up on the scene in December. And then I had to figure out what the hell was going on with that. And now, I mean, it seems like AI is in everything. Yeah. I mean, you can't predict every conversation. Yeah, I mean, yeah, let's let's talk about Yeah.

54:57

Yeah, but I think just one thing, the 2040 plan, I think greenways we actually are getting Oh greenways is making strides. And our development community is really starting to embrace it, I think our planning communities weaving it into a lot of our design guidelines and principles. So I just wanted to say that before I kind of said, 2040, I get that greenways. And mobility is still variable, say,

55:19

I mean, before we go into AI, I do think I have, you know, I've been here 26 years, I've never seen a city, I don't think in this country that has had the amount of public sort of investment as we have right now. So I mean, we used to talk and millions and now we're talking and billions. So you've got, you know, $2 billion $1.6 billion Titan stadium, you've got a new to Tennessee Performing Arts Center, you have a couple of billion dollars in the airport, you have, you know, a billion plus and the east bank, I mean, these and then, of course, you've we just completed God, I mean, we're looking at baseball on the horizon. So I mean, we've never, I've, this is so exciting to be in a city where we're investing so much money into it. And the second degree, it is livability, because it's these assets that will bring more tourism and more tax dollars to us, which will hopefully improve our school system, give us transit options fund these things that we want to do. But I don't know of any city in America that's doing this at once. I think so. It's an it's absolutely it's mind blowing.

56:31

I think that's a great point. Because, you know, back when one Bellevue place was undergoing its redevelopment. I mean, that was it was like one of the three largest redevelopments in the United States or the southeastern United States. And now it seems like we have those announced left and right.

56:46

Oh, yeah, absolutely. It's something that's not really I mean, I shouldn't say sexy, but it's not really talked about a whole lot. But like the state of Tennessee is investing $2 billion across the state. Now, not all of that is coming into Nashville, but it's going into our community colleges, it's going into our infrastructure, it's going it's going into a lot of sort of historic renovation, rehab. I mean, we're working on four state projects right now. I'm totally excited that we're going into the park system, we're going into all these places that make you know, places we want to go and be great and semi but $2 billion in the state is absolutely amazing as well. I mean, we're somebody billion dollars everywhere.

57:25

I mean, well, what do you mean? Yes, across the state, but think about it in the past few years. What's happened on the mall? Oh, yeah. And in there, but I mean, been a billion dollars there. Yeah, in public assets. And, again, not sexy, but you know, water services, you know, we got to flush our toilets, and the water's got to go. So

57:40

always, always bring a conversation back to water.

57:45

They've got $2 billion just in separating combined sewers, right. I mean, there's just so much work in terms of like the built environment seen and unseen. Yeah, that is happening in this city. And again, it's the return on investment. For that is there, you know, it I will say this, because you mentioned, the pain point for people is to your point, it is happening all at once, which is hard to experience as a as a as a resident of a growing by just I mean, vibrant city that is also still growing like it's growing. And then it's vibrant as it's growing. And then oh, by the way, we're going to keep growing. Like that's a little bit of an anxiety. We're

58:24

just a construction zone is what we are. And we continue to be I mean, just driving here all the construction on Dickerson. I mean, there's just construction everywhere. And I get it to all South didn't like the construction. But look what we got out of it. Yeah, and Wedgewood Houston, it's just one big construction site. But imagine what it's going to be when it's complete. So they have another

58:45

two years. I'm so numb to all the constraints. Because we've just been we've just seen it. I mean, you know, Nashville has had the most cranes per capita in the country for multiple years in a row. I mean, you know, we had we had an investor in town this past week, and he was like Guy y'all have so there's cranes everywhere. There's so much and we were like, oh, yeah, I guess there is

59:06

many, but yeah, maybe we went to Toronto in the spring for spring conference. That's not what the this the fourth, the city with the fourth largest amount of cranes in the world. But you don't see them that much. Because they're between all the high rises. So but when you go up top, you're like, oh my gosh, there's cranes everywhere. That I mean, they're exploding. I can't remember how many 100 cranes they have at once, but

59:32

they have 50 You have like 51 tower cranes, though.

59:37

Yeah, that's crazy. But those, you know, that's a different market. I mean, that's an investor market. So they're building you know, international investors. It's really not our market. But could be Yeah, I'm

59:51

not sure we'll be there in

59:53

1020 years 20 2040 If we revise our plans.

59:57

Well, we're coming up on an hour one of the risks Next with everybody's time, but I do want a quick thought from everyone on AI, like, what are your? What are your sentiments on it? What's it changing with the way that you work? What are your thoughts?

1:00:09

We talked about this before this are we going to have to like pray, I am like, I wish I still had a dial phone, like I'm stuck in the past. So the AI is just beyond me, like, I can't grasp my mind around it. But I do think like our company is looking into how to adopt it, I think there's a lot of I mean, we don't want to be office, right? We don't want to be stuck in the past, like we're gonna, we're gonna have to, we're gonna have to change and embrace it. And I'm not the mind for that. And I'm gonna let somebody else take the charge first, and then just tell me how to adopt it. So I'm not the best one for this question.

1:00:50

For me in this is probably a little out there. But you know, AI is a great and complex tool. But tools are only as good as the user, you can give the best tool in the world to an unqualified and capable individual, and you don't really get much from it. I think AI will, the value of AI will be told by how prepared humanity is to really use it. And also, you know, many things were created as tools and ultimately became weapons. And I feel like AI has that written all over. But I would say what it means for the workplace and the work environment is exactly what you talked about a minute ago is we need to be more flexible, because now we're going to work totally different. I mean, you're gonna have a nonstop, you know, engine that's just constantly trying to better understand what your next step is, or next five steps or 10 steps are up, that's going to change how you do really everything when you give it 510 years to work its way into into the workforce. But I will say this, too, I think it's going to increase our demands on power and energy and technology that turned on me, you know, we got it, we got to get a new iPhone every two years because the thing just stops working. Like it just stops working. I mean, imagine when we pour everything into AI, and then it's time for a new one. I think it's a dangerous thing to really start doing.

1:02:07

So it's a conspiracy, so some of those.

1:02:10

But I wouldn't say it was proven that.

1:02:12

But I will say this, I think and then I'll pass it, I think we've got to be very intentional about integrating AI into an equity platform, so that workforce communities can keep pace, because the technical divide is a thing that just keeps growing. And AI is just going to accelerate that 1015 20 100 fold. So I think there does just need to be a lot of that going into, like our education system, how we work through government, like there's so many things that I think come along with that. But I'm literally like Brittany, I mean, I'm, I'm going to do what I do whether AI is helping me or not. And you know, I feel like I can I can manage with it without it but in no way want to be a dinosaur. So just like you said, you got to sit down and digest it. I'm excited for it. Because I know what it means. It's what we can what the positive things can be. Yeah, what it could be. Yeah,

1:03:06

I think that's it. It's like how to use that as a tool. I do see the danger. And of course, there's the conversations and debates and music and entertainment. And you know, where did the royalties go? And how does it displace people? And so I think that's a totally different discussion in design. I think we see it as a tool that can be used, and can it make us more efficient? Can it assist us? Can it do things that we can't do then? Yeah, we can use it as that? Is it going to design a building? No. I mean, there's still so many things that go to intuit that hopefully, the human capabilities are not displaced. But can it make us more efficient? Yes. And so, you know, there's much more, you know, there's better people in our office that can discuss this about the technology and the tools we're going to use and the programs and platforms. But it goes back to utilizing it as a tool. Yeah. And it's about working, you know, working smarter. So how do we do that? The

1:04:07

human artificial intelligence handoff in hand back, I think it's going to be a dynamic thing you're advancing if the fight defining when those hands or handoffs are right, or appropriate, and how and the controls around it,

1:04:21

I think even photography, I mean, we were shooting a building a few weeks ago, and you know, there was no one in the pool and they're like, oh, yeah, AI will we'll add some trees over here and we'll put somebody in the pool and easily I could son.

1:04:33

What picture are you looking at? That's even really nice.

1:04:36

The thing is, like, you know, renderings, I think, you know, it's it's architectural renderings like you can't tell anymore sometimes if it's an actual rendering versus a photograph so it's a little scary.

1:04:48

Well when AI can get in great my clients higher loan to cost. Leverage your let me know I'm all in.

1:04:57

I'm just ready for AI to start sifting. through my loan documents, telling me what I should and shouldn't pay attention to a mortgage bank. Exactly, exactly. Well, Sheila and Brittany, thank you all so much for coming in the studio and diving into this topic today. Their bios and links are in the description so if you want to connect with them, follow them I highly recommend going and checking those out. Appreciate you all tuning in and we will see you in the next one. This episode of the commercial real estate investor podcast is brought to you by cre launch Pro. This online commercial real estate program is designed to take you from beginner to pro commercial real estate investor with access to all of my courses, our online community and monthly group coaching calls. Learn how to confidently buy your first commercial property today at www dot c r e launch pro.com