NEW: Apprenticeship Available, Renewing Tenants, and More (Office Hours)
Tyler shared insights on various commercial real estate investing strategies, including industrial outdoor storage and flex space, sale leaseback deals, and remote work. He emphasized the importance of understanding risks involved in condo investments and provided tips for navigating these types of investments. Cauble also discussed overcoming obstacles in commercial real estate development, including education, building relationships with tenants, and creating mutually beneficial projects with developers, landowners, and municipalities. He also announced an apprenticeship opportunity with him at the Peerless Mill in Chattanooga.
Get commercial real estate coaching, courses, and community to jumpstart your investment journey over at CRE Central: www.crecentral.com
Key Takeaways:
Commercial real estate investment opportunities like industrial/outdoor storage, flex space, and sale-leaseback deals can provide good returns
It's important to build relationships with tenants and be a good landlord to secure longer lease renewals
Gaining hands-on experience through apprenticeships or working for developers is very valuable for learning the business
Having a solid operating agreement is critical when partnering or joint venturing on deals to protect all parties
Educating oneself on commercial real estate fundamentals and advanced strategies through resources like CRE Central can help aspiring investors get started
Focusing on the benefits of projects rather than just features helps gain support from municipalities and communities
About Your Host:
Tyler Cauble, Founder & President of The Cauble Group, is a commercial real estate broker 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:
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Are you looking to take the next step toward investing in commercial real estate but don't know where to go? Series central offers a comprehensive education and coaching platform designed to help you get started. Our online courses cover a wide range of topics, from the fundamentals to advanced strategies, ensuring you have the knowledge and skills needed to thrive in this competitive industry. As a member, you'll gain access to our exclusive online community and monthly group coaching calls, providing you with valuable networking opportunities and personalized guidance from experienced professionals. Whether you're a beginner or looking to take your career to the next level, cre Central has the resources you need. Visit www dot cre central.com. To learn more. Welcome back to the commercial real estate investor podcast Office Hours edition live from Nashville, Tennessee at the copper group studios. I had planned on being with you all last week, I was traveling with the family and Sea Island on vacation first family vacation that we have taken in quite some time and took all of my equipment and the Internet was so bad that I couldn't, I couldn't hardly do anything on my phone. So streaming was kind of out of the question. So thank you for being patient with me and going live with me today instead. So over the past week, couple of updates, I was out in Denver, at Brandon Turner's Rei Summit, which was an incredible event. There were, gosh, almost 1000 people there. And incredible room incredible speakers had a great time I gave a talk on how to get started in commercial real estate was a very quick 45 minute speech very actionable, because that's what Brandon wanted. He said, hey, I want every single talk to be how to x. So I told him, mine was going to be the best one. And I think we delivered. So we will be releasing that video here soon. Hey, vegan, how's it going? Thanks for joining us. We will be releasing that video here soon on the channel. It will be coming in the next few weeks so that you all can see what it was like and hopefully attend next year's Rei Summit, which was a lot of fun. Oh, man, past week was a lot of fun, I actually got to relax a little bit and cry with family. I was taking a lot of calls those still working while I was gone. actually working a lot on the CRT accelerator program that I've got, which you heard the ad roll for, if you like the coaching that you're getting in these, you know, Tuesday mornings, 8:30am Central Standard Time, office hours. Imagine what we're doing in the group coaching calls. If you want to learn more about that go to c r e central.com. And we can we can talk more about it a couple of updates wanted to dive into today. First thing we released a blog post here recently on condo hotels in Nashville, what kind of hotel investments in general. But I've started seeing condo hotels, sometimes referred to as condo hotels really starting to pop up in the Nashville area, they're becoming more popular. They're they're more popular in big cities, essentially, it's a residential condo unit within an existing hotel. And, you know, there's some really, really nice brands that have a phenomenal Operational history. That makes sense as an investment. You know, there's still a fair amount of risk that comes with that, because you are dealing with an operator, right, somebody else is running a hotel. And if that hotel goes south, your Condo Investments gonna go south as well. It's a little bit of a different risk profile than your typical condo investment. And so, go check that out on the blog. I think it's really important for people to read that if you're going to be looking at condo tell investments, they can be great, but there are a lot of risks that you need to dive into before you get started. Another announcement we also just announced, I guess, a committed official this morning to I posted it on Instagram a couple of days ago. A commercial real estate apprenticeship with me at the peerless mill in Chattanooga. This can be partially remote though, I do think it would be important for you to be able to get to Chattanooga a few times throughout this apprenticeship that way you can have some of these meetings in person. But essentially, you're gonna be my right hand person working on this project with me scheduling, you know, my assistant, right scheduling meetings with the city with tenants, marketing, working with me on the day to day managing projects, dealing with vendors, contractors, etc. And my goal is to teach you exactly how to do these types of projects so that you can go into your own. Depending on the person though, I mean, if you're more interested in a full time role, there will be opportunities for this apprenticeship to turn into a full time position with us depending on performance during the apprenticeship, and depending on your goals, you know, some people may want to just come through Do the apprenticeship and go off into their own investments and some people may want to stick with us. And I'm totally open to either of those. If, if you go to my Instagram, click on the Wake tree that is in my profile, it is the first link there, you can also go to Tyler cauble.com/blog and look up the commercial real estate apprenticeship. From there. So if you have any questions on that, feel free to dive in. If you have any questions on commercial real estate today, that's what we're diving into. Let me know let me know in the live chat. Looks like Evan has a comment closing on my first commercial deal in less than 90 days four acres industrial and for storage or flex space. Congrats Evan, that's really exciting, man. I'm a big fan of industrial land, and, you know, outdoor storage and flex space today. I get asked all the time, you know, what do you think is the best commercial real estate investment? And I don't think that there's it's kind of a loaded question, right? There's not really a piece of commercial real estate that is the best. However, today, what I like the most is most definitely, you know, industrial outdoor storage and flex. I just think that there's so much opportunity there. And there's a lot of demand. You know, it's really interesting, I was having a conversation yesterday, we're at the International carwash Association's carwash show here in Nashville, interviewing Marcus Cottrell. He's one of my students and care accelerator. But he is also I mean, the President of the International carwash Association, which is really cool. And he's doing some flex space. And I was just talking to him about the style that he was doing. Because a lot of people get into flex and they're like, hey, I want to do it as cheap as possible, which of course you can, right. That's the beauty of flex space, it is a more affordable approach than some other types of commercial real estate. But he kind of took the opposite approach. He said, You know what, I'm just gonna make these incredibly nice. I'm gonna make them where they're very safe, they look great. You know, they've got brick on the outside the landscaping is to the nines, we've got you know, well lit parking lots to a point where he feels safe having his daughter go out there and deal with the property because he's looking at it saying, You know what, my kids are going to inherit this one day, I want it to be a good deal for them. And he rented them up so fast. And he's got some really good tenants. So that's the great thing about flex space. You can take it in so many different directions. Doesn't really matter which which way you go. Anthony saying congrats, Evan. Good morning, Tyler. Good morning, Anthony. Appreciate you joining us ma'am. Yeah, this past week was gonna you know, when I was sitting in Seattle and actually ended up writing a couple of articles. That's something I haven't done here in a little bit. I haven't had as much time as I really, really need as much as it takes. So I've got to focus on that a little bit. Do some more of that we're working on a deal out in Austin Texas right now. That I'm pretty excited about it's going to be a sale leaseback with the client. So once we get that deal done happy to do a bit of a case study here for you all, so y'all can see, you know, kind of how we pulled that one together. CLE specs are great, they are great opportunities, because, you know, there are businesses out there that own their own real estate. And they may not need to own their own real estate, it may make more sense for them to sell it, get a long term lease in place, and free up the cash. Because I mean, honestly, look, it looks like McDonald's. McDonald's corporate owns all of the real estate, but the individual franchisees don't, because they know that if the franchisees are buying all the real estate one, it's it's going to be they get to take part in the upside, right, which I don't know McDonald's necessarily wants. But to it's very, very cost prohibitive, it gets really really expensive. Whereas they're making all of their most of their money on actually selling burgers, corporates making most of their money on owning the real estate. So for most small businesses, it actually doesn't make any sense to own your own space, if it's going to tie up too much cash now depends on what you're doing. I mean, I own obviously, my own buildings. I'm a commercial real estate investor. So of course, I'm gonna have my offices in a building that I own, but there's plenty of doctors offices and other clients that we've worked with over the years that own their own buildings as well and it makes a lot of sense for them to do that, but sometimes it doesn't. And so we're really excited to be able to negotiate that because a sale leaseback can be a massive win win for both parties, the tenant gets a lease that they want, they get to free up some cash, the buyer us we get the lease that we want, and we get to buy another property, so we're pretty excited about them. Matt Brown is saying that apprenticeship looks awesome. Not sure I can make it work logistically, but if I can't, but if it can be partially remote, it might take a deeper dive into it. That's a cool thing you're doing there. Yeah, Matt,
look, what I'll say is go to the website and apply. And let's have the conversation. It can be partially remote. I don't think that I mean, the great thing is nowadays, the majority of what we can do in real estate is remote. Right? I'm not in Chattanooga, I do almost everything on that project remotely, I go there once, you know, every month or two, I'm headed up there the Saturday. So depending on, you know, the exact needs as long as you have the flexibility to get out there every now and then it's it's more for your learning, being able to get out there and see the site in my opinion, because getting out there meeting with the mayor, meeting with the city, having those conversations with us going on the walkthroughs. With potential tenants, you'll learn a ton of information that way, it's the best best education you could get. I mean, I basically had that right, an apprenticeship when I first started because I was a commercial leasing agent. For a developer. I didn't work for a brokerage, I worked for a developer. So I got to see the ins and outs of you know, the day to day pretty name. And Tony is saying hi, new to your channel and commercial real estate currently a residential agent looking to make a pivot, what would you recommend my first steps be to break into the commercial side of things? Oh, gosh, you're in the right space because I am not a fan of residential real estate. In fact, the majority of my coaching clients in this area accelerator program are all transitioning out of residential. They're either residential agents, or the residential investors, and they're tired of dealing with it. You know, this is a national specific thing. But parks, which is a local boutique, Residential Brokerage, just announced yesterday that they are merging with Compass. And after the NAR news and all that stuff, there are a lot of residential agents that are very uneasy about the future of residential real estate. And I think, unfortunately, those concerns are warranted because for the last 10 years, residential agents have been paying Zillow to find a way to get rid of them. I mean, Zillow has made it very obvious what they're trying to do they want residential agents to give them all the data to give them all the money to then turn around and build a system to get rid of residential agents. And now with the NAR ruling, it just pulls more into question. So number one is get educated, learn everything that you possibly can, I mean, this channel, we've got over 450 videos. Now in commercial real estate, we've got hundreds of podcast episodes. There's a handful of books, if you search, Tyler Cauble books, commercial real estate, I don't know the exact URL, but I do have a blog post on 10 books that everybody should read on commercial real estate. And actually, I do need to go in and update them. So keep an eye out for that. I'll probably repost it here soon with even more books to it. Because now there are actually some pretty good books out there. And then of course, if you want to, you know, take it to the next level care accelerator, we've got our online training, platform group coaching, and community. It's a lot of fun. We had a great coaching call last night, Mike taraval came in and talked about asset management. And then next week we're gonna be or in a couple weeks, we're gonna be talking about we're gonna be going through an investment offering memorandum from a group that's doing a ground up self storage facility, and we'll be analyzing it live. It's like 30 or 40 pages. So it'll be a fun. I mean, it won't be fun, right? I mean, it's, you know, it's documentation, a lot of legal stuff, but I always find it fun to look at deals like that. Just have conversations about it and talk like, hey, what do you think about this? You know, what are the pros and cons all that fun stuff. So Anthony, I hope that helps. Jabari Good morning, Tyler. Good morning Jabari amazing content over the years, how do you recommend working with developers, landowners and municipalities to get a project that mutually benefits both parties? Who first of all, Jabari, thank you appreciate the kind words. Second of all, that's a rough question. Is is a loaded question. Because no matter how great a project is, unfortunately, you're always going to have NIMBYs we're working on a project right now for a developer out of Boston, here in Nashville, where the redevelopment of this property will bring a significant amount of tax revenue to the city, it will provide some much needed attainable housing. You know, there's there's so and it will get rid of one of the most crime ridden properties in this little subsidy of Nashville. And we're worried that we're not gonna be able to get through despite all of the benefits because you just have a lot of people that are backwards sometimes that don't understand how, what's good for them, or what's good for the community. Right. I mean, think about it for the longest time we didn't want there to be sidewalks and transit in most of our cities. Makes no sense at all. At all. We built our cities around cars instead of people imagine how amazing cities like Nashville and Austin could be if we had kept our trolleys, you know, Raleigh, Durham, Charlotte, even Atlanta. I mean, if we had kept our trolley systems kept the walkability of the cities and they had grown that way, it'd be, they'd be much cooler. Look, the biggest thing is, make sure that you're talking about the benefits, not the features. And that's something that if you're in sales, you've probably heard quite a bit. But you know, we had I mean, I'll kind of break it down this way. So we were talking to another developer about doing some affordable housing, and he really wanted to tout Oh, well, we're bringing in 80%, ami, and it's going to be affordable housing for the community, it's a much needed thing. And yes, those are features, right? The benefits are the teacher making $40,000 a year we'll have a place to live. Right? See how different those two statements are. Everybody can relate to the teacher making $40,000 having a place to live. But in that's less than 80% Ami, that's even more affordable than most affordable housing, which is crazy to think if you live in Nashville, and you make over $80,000 a year, you're still considered, you could still apply for affordable housing. That's That's how expensive housing has become. So think of it from that respect. What are the benefits, not necessarily the features of the project that we're offering? How will it change the way people walk or experience their community? Instead of you know, instead of talking about how great the sidewalks are, talk about how kids will be able to ride their bikes to school safely, things like that people can relate to. So hope that helps. But really, it's it's telling the story. And it's making sure that you're focusing on those benefits. Cesar saying I was trying to reinvent the wheel with my property, trying to connect with the developer finding the right tenant for a build the suit, etc. Until I heard about industrial outdoor storage. Thanks to you, thank you for your content, man. Oh, Cesar, I'm really glad to hear that. Hopefully, I saved you a whole lot of headache and made you a bunch of money. That's, that's what I'm here to do. Yeah, so you know, the build the suits, they're great. They look, when I first got started in commercial real estate back in 2013, everybody was doing build a suits, they were super common. These days, tenants want to be open in like, six months, which is crazy. So you know, most people, you're just not gonna be able to, you're not gonna be able to get a build the suit done these days, I haven't done a build a suit and almost 10 years, it's crazy that they just don't really happen anymore. But industrial outdoor storage, man, you can have that up and running in 30 days, it's a lot less of a headache. It's far cheaper, and it gives you a solid cover lamplight and you're not taking on any more risk, because you're not taking on any more debt. Now, I mean, to be fair, you'll probably still take out a loan, you know, 3050 $100,000, to, you know, grade, the grade the way and maybe seal and stripe it if you've got a parking lot, you probably do some fencing and lighting, maybe do a gate. But at the end of the day, it's not like you're spinning a million dollars or $2 million to build a building. Right? That's, that's a totally different level. And he's saying, Hi, Tyler, good morning, after tenant is close to ending a one year commercial lease, what strategies do you use to get them to commit to a longer lease? Who, okay, so Eddie, this kind of starts when you first get that tenant into the property. And that's just being a good landlord. I know that that's kind of wild. But being a good landlord, being a good person, stopping by and building relationship with them. And like, that's, it's super basic, but there's a lot of people that don't do that. They do not care. I mean, whenever I'm out here, you know, on my properties, I make sure to say hi to everybody. I'm picking up trash. I'm not above any of that. And when I feel like when your tenants see that, they get a different level of respect for you. Because if you're disconnected, and they don't see you very often, they don't really have any loyalty or commitment or relationship with you. So I think building that relationship kind of helps you take it to the next level. I also think that opening up the conversation with him as early as possible.
Helps and don't just say, hey, I want you to renew, here's the new rate. I would go out and say hey, look, here are the other spaces that are available in the market. Here's the rate that they're charging. Here's what I'm currently charging you here's where I need to be to make this work. And here's how much better of a deal that is than you're moving. Right? I was having this conversation with my grandfather yesterday. He's got a small little flex space. And he's charging 725 a month for it. It's like 500 something square feet. And, you know, he was he was wondering if he should take it to 1000 at $1,000 month, we've got a tenant renewing. And so I was talking to him, I said, you know, look, you could probably justify $1,000 on the market. But this tenants been here for how long? Been here for a little while? And I said, Well, why don't you? Why don't you just offer him 850, you know, you're still getting $125 A month increase. And you just tell them, Look, I know that Mark rates, 1000 hours, but you've been a good tenant, you've been here for a long time, I'm going to make sure that you're getting a deal that benefits both of us. Right, because then that tenant if they decide to move, one, we know that tenants not gonna be able to find 500 square feet give or taken in the Nashville area as close to downtown and the Interstate is this spaces for under $1,000 a month, it's not going to happen, then they've got to deal with moving, right, which that cost money. And then the headache of moving, when you're a business, the amount of paperwork and you know, letterheads, and stuff like that, that you've got to change even your email signature block, there's so many little things you have to think about that have to change when you change an address. So for a lot of companies, it's not worth it, just just work with them, it makes it so much easier on you as the landlord to just keep a good tenant, even if you're not getting absolute market rates, right. And then the other thing is to like, you know, I've talked about this before, do we need to maximize 100% of every deal that we ever do? Or is it worth not dealing with the headache, having good tenants not having to worry about things, and getting paid a little bit less. So I really liked that approach, all for now trying to squeeze blood from a turnip. And then, you know, once we sell it, that's a pitch that we can make to the to the buyer is, you know, look, we know that we're under market rights. And we know that we're probably not going to get the value for that. But you will be able to raise rents, you know, by 5% 10% and increase the value of the property x. So that's why we're justifying this purchase price that we want to sell for. So hope that helps Eddie. John, Hey, Tyler, thank you, as always, for these Q and A's. Yeah, happy to appreciate you guys jumping in. I mean, look, I couldn't do these Q and A's if it weren't for you all, jumping in asking questions. So really appreciate you all taking the time. What are your takes on working as an analyst or working for a developer? Which one would you go after? Between the two? That's a great question. So it depends on what your long term goal is. I mean, look, if you want to be a developer, I say go work for a developer, there's there's no better way to learn how to be a developer than to just follow one around. Right? It's it's hands down the best thing you can do. However, if you want to get into the finance side of things, if that if you want your role within the general partnership sphere to be the underwriting money guy, then go for the underwriting go for the analyst side of things because every general partnership, well, let me let me say this way, most of my general partnerships have very specialized people within them, right. The majority of deals that I have ever done, have had other partners involved. Like when I did my hotel, which we're starting construction on here, hopefully in the next week, really, really excited about that. When I did that I brought in hotelier because I didn't have any experience in hotels, I've done branding, and I've run businesses, and I've bought real estate before. But there was one little edge, which is owning a boutique hotel, which is a little bit different. So I brought in a partner that specifically had that skill set. When I did my first syndication, I brought in a partner that had done a lot of syndications. That way, they could oversee the entire process to make sure that I wasn't gonna violate any SEC terms. So I think that, you know, if you want to partner with other people in the future, being an analyst is great. In the look, you could do the same thing as a developer. I'm not saying that you couldn't have that skill set and then partner with other people. There's just something very unique to being a very skilled analyst. A lot of people don't have those skills. I mean, same with a developer though. But if you want to be a developer go shadow a developer no better way to learn. Viken is saying Tyler when management work on Chick fil A restaurant is restaurant a good investment for cooperation? Like McDonald, Vic, and I'm sorry, I'm not quite understanding your question. Would you mind just clarifying that in the chat and I'd be happy to get to it. Alright, servco is saying do you think making flipping by yourself is business or self employment? servco I'm sorry, man. I'm not understanding that question either. Are you saying? Do I think flipping business Real Estate is a business or self employment. I mean flipping is it can be both. I mean, flipping is self employment for sure. Unless you're working for somebody else doing the house flips for them. But it's most certainly a business. And he's saying Awesome, thank you for the insight you rock a anytime Edie happy to do a man. Peter, Tyler, would you ever do business in Connecticut, I'm looking at a flex space that used to be a vet's office that might pique your interest. Absolutely, man, I mean, look, I am willing to go all over the country. I'm in. I'm in Nashville, Tennessee, I've got some real estate in Chattanooga. I just sold out of a deal up in Milwaukee, Wisconsin. And we're looking at buying a deal in Austin, Texas. So I'm gonna be flying out there here soon. I am certainly open to investing in deals. In other parts of the country, as long as there is a good story, as long as the demographics are right, as long as we're getting a good deal. And I've got a boots on the ground partner. That's the biggest thing, if I'm raising capital for any of these deals, if I'm bringing my investors to the table, then I have to have 51% majority control of any of the activities, but we still need a boots on the ground partner to execute the day to day. So I would just be working with them to do that. As far as like, you know, hey, if you were like, Tyler, I've just got to deal with do you want to buy it in Connecticut? Probably not. Because I am very, very careful with where I invest, because I want to make sure that we can have hands on. So I mean, if you're if you're looking to partner, let's talk, let's talk about it. Derek is saying good morning, what are the best situations when deciding between partnership and joint venture. So direct partnerships and joint ventures, that's basically the same thing. It's just, you know, two or more parties coming together to execute a deal. You know, I would make sure you have everything in writing, go get a great attorney, and make sure that you've got a solid operating agreement. I mean, let's put it this way, I had a deal here recently where one of the partners didn't have the money. And he to put up his portion. And it was scary at first because I was like, well, great, I'm gonna have to cover $50,000 of shortfall on this deal. And I was worried I wasn't gonna get anything for it, we just had to do it so that we didn't get sued for non performance. And turns out in the operating agreement, fortunately, I had a great attorney it had in there, if one partner has to cover and other partners, you know, capital call for whatever reason, and it wasn't a capital call, we were selling a deal seller financing, which meant that we had to pay off the note, I want to make that very clear, because I've never had a capital call in my life. But we we had to pay off the note at closing, right, so we got some money from a down payment. And then we had to come out of pocket extra. And he didn't have the money to come out of the pocket for the extra portion. But fortunately, in the operating agreement, it stated, you know, the partner that is loaning the money, essentially to the company, on the other partners behalf gets 100% of cash flow from the asset until they're paid back. I was like, well, that's excellent. I'm very well covered. So that's the biggest thing. Just make sure that you have a great, great attorney to put your operating agreement together. John is saying You're the man. Thanks, Tyler. Great answers. Happy to do it, John, appreciate you. He's also saying Are these live q&a Every other week? John, they are every week, Tuesday at 8:30am Central Standard Time. Problem is some weeks I'm traveling. I guess it has been every other week for the past couple of weeks because I had a meeting with the mayor on a project that we're working on. And then I was out of town last week. So no, there's supposed to be every Tuesday at 8:30am Central Standard Time. Follow me on Instagram. I always update everybody there whether we're doing it or not. But I would say we're we're almost always doing these. And that is all the time that we have for today. Appreciate you all joining me. It was a lot of fun. And stay tuned for some new videos dropping here pretty soon that I think you all will be very excited about and join us next week 8:30am central standard time to dive into more questions on commercial real estate investing.
I'll see you then. Are you looking to take the next step toward investing in commercial real estate but don't know where to go? Cre central offers a comprehensive education and coaching platform designed to help you get started. Our online courses cover a wide range of topics from the fundamentals to advanced strategies, ensuring you have the knowledge and skills needed to thrive in this competitive industry. As a member, you'll gain access to our exclusive online community and monthly group coaching calls, providing you with valuable networking opportunities and personalized guidance from experienced professionals. Whether you're a beginner or looking to take take your career to the next level. Cre Central has the resources you need. Visit www dot cre central.com To learn more
In this episode of the Investors Round Table, we delve into the pressing economic conditions shaping the commercial real estate landscape. Logan, Matt, and I will break down how interest rates, inflation, and broader economic trends are influencing investment strategies, capital deployment, and deal structuring.