What’s Going On?| Investor Round Table

Tyler, Matt, and Logan discuss the challenges and opportunities in commercial real estate, including identifying niche markets, conducting thorough due diligence, and understanding tenant needs. They also discuss the current market state, highlighting challenges and opportunities, and the importance of honing one's craft, building relationships, and taking a long-term approach during a market downturn.

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Key Takeaways:

• Commercial real estate brokers are on the front lines of the industry and know market conditions well since they are directly dealing with transactions.

• While transaction volumes have significantly declined, there are still good investment opportunities available for those willing to get creative and work hard.

• Sale leasebacks can provide liquidity to cash-strapped businesses and are a way for investors to secure properties with negotiated lease terms already in place. This reduces risk compared to other deal types.

• When markets are downturns, it's a good time to focus on growing your business and positioning yourself for future success once conditions improve.

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:

0:00

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, series Central has the resources you need. Visit www dot cre central.com. To learn more. Welcome back to the commercial real estate investor podcast today we are back with an investor's roundtable and we're just gonna hang out have a casual conversation tell you guys what we've been up to what we've got in the works and what we're excited about. I mean, there's a lot going on in the world of commercial real estate today. There's so much in terms of technology, Logan and I had a phenomenal conversation yesterday about business models. There are so many different ways to do this industry. And do it great if you want. So, Matt, first I'm gonna kick it over to you, man, you are on the road. Tell us where you're at.

1:21

Yeah, I'm down in Orlando with a group of guys who are all CEOs and we're trying to all make each other's businesses better. So it should be fun. Yeah,

1:31

it'd be good. We need to get Logan into go abundance.

1:35

Yeah, what are you doing, man?

1:36

Sounds like great, guys. Yeah, it is.

1:41

I mean, Matt and I were just talking before we went live. He was in an Uber with a guy that I'm negotiating a deal with in Texas right now. So it's like, yeah, hey, you know, go on. It's, it's, it's where dreams happen.

1:55

The world is small man, you just gotta get in the right rooms. That's exactly.

2:01

That's exactly it. So Matt, tell us a little bit more about what you're doing in Florida. Like, what what you're gonna be diving into this weekend?

2:07

Yeah, and this sort of goes with what I've been focusing on lately, too, you know. So we're all I think we're all coming to the table with mostly primary, primarily one business that we're focused on trying to help each other improve that business. So mine's the law firm. As you guys know, I do a lot of real estate stuff. But I'm making a push in the law firm to grow it. And probably more importantly, grow it without taking more of my time, you know, so you get into, without me instead of is dependent on me. So that's the new thing for me personally. And so making a lot of moves, doubled our revenue within less than six months and double it again, and double it again. So I think it'll just hired to another attorney last month just moved into our office in music square on Music Row in Nashville. So a lot of exciting things happening. Busy. So I'm hoping we can we can crank through this growth phase so I can buy more real estate soon.

3:15

Yeah, I know that feeling. I think Logan and I are kind of doing the same thing. I mean, Logan, you've had a year a little more focused on on the business too. I mean, talk to us about that.

3:22

Yeah, you know, I mean, it's in times, like we are in right now where I'm a firm believer that market share can be grabbed and taken. And when other people are pulling back or stepping out of the industry, or, you know, just kind of sitting on their hands waiting for it to get easy again, that's when usually there's an opportunity to go, work hard, put effort around marketing and talent and systems and processes in the business where you can go succeed. And you know, that's from the great Grant Cardone, right. You know, I'm not sure. Tyler, if you've had any opinion podcast, I'm sure you've met the guy. Maybe he's even been on the show. But okay, so regardless of his real estate, and let's just talk about his book 10x rule. And the 10x rule is pretty phenomenal story about he got how he got started with his sales training. I think he flew down to Texas or Florida, didn't know anybody in the market. And when saw every single business that was there, right. And this is when other people were kind of pulling back and, and not really doing as much and so, you know, I saw Kyle Matthews, which I'm pretty sure is the brother of clay Matthews with Matthews Wilson. And, man, whatever those parents did, I need to learn to make sure that some kiddos that turned out like that, but anyways, he was talking about how transaction volumes for the last 21 months have been month over month. Less than less right? And so And that's excluding one month where there was one big, either merger or kind of acquisition deal, right? So that's really tough for a lot of folks in the industry, it's gonna be tough for brokers, it can be tough, tough for investors are gonna be tough for lenders, just huge GDP just from real estate transactions alone that happen every single year. And so, you know, what do we what do we do during that period of time? Well, I think it's, you got to get better. You got to hone your craft, you got to build and plant seeds for relationships. Now that might not flourish until a later period of time, right. And so that's really important for, for me to be focused on and trying to coach people through, like, yeah, we're in a low period. But here are the things that we can do right now to set ourselves up for success. And by the way, companies like Uber, and you know, a few other successful companies, Zappos and other ones. They were all born out of market lows or pullbacks, right. And so, you know, I think taking that mentality right now is extremely important. But that takes a lot of work to keep people inspired and motivated to continue to do that. And it takes some risk tolerance on our part to keep spending and doing the work not necessarily seeing an ROI. But I think when commercial real estate normalizes and gets back to a point in time where transactions are concentrated, and we get back to doing the levels that we were doing. The folks that had stepped out of the industry, they're going to be, you know, really hurting because they didn't put in that work. So I think that's really important right now, in kind of where we're at. And that's what we're doing on a regular basis. It could just be it can kind of feel like a little bit of a grind right now, I would say.

6:40

Yeah, that's that's pretty much exactly what we're saying. You know, towards the end of last year, I decided to pull back on acquisitions, because we had tried to buy a couple of properties, but we just we couldn't get anything to actually pencil and make sense. And so I decided, You know what, let's just stay active on the business side, we'll grow the business. And this time, while we're not buying anything, that way, when we get back to it, we'll have even more brokers doing volume, which means we get to see more deals, or we'll have the cash flow coming in from the brokerage side to get better loan terms, when it comes to negotiating with banks, whatever that was. And it's and it's been really good for us. And you know, it's interesting, because commercial real estate brokers are on the front lines of commercial real estate investing. If you are an investor, and you're not having regular conversations with commercial real estate brokers, you are behind the market. They are the frontlines, they're in the trenches, they know exactly what's going on at all times, because they're having to deal with it. And I've got some brokers that are crushing it right now. I mean, they're absolutely crushing it because they're putting in the work. And they're getting deals that other brokers probably should have had. But those brokers aren't making the calls, because they're sitting back going, you know what the markets bad, I'm just going to wait it out a few months, I'm going to wait for something to change. And it I mean, look, that's a blue ocean, in and of itself. If you're in a time when everybody else is scared to go out and do deals. That's the best kind of market you want to be in. Because, you know, sellers know that they know that buyers think it's a bad time to buy deals, which means they're probably going to be willing to give you some concessions or sell at a lower price than they normally would have. Had we been at a hotter market. And I think that we're finally getting to a point in the cycle. It's been 15 months, 18 months since we started seeing significant, I guess, significant impact in the commercial real estate market. I mean, it was what September of 22 When interest rates really started rising, but we didn't feel that for like six months. And now, you know, for the first bit of it, sellers were sitting there going, No, I still want 2022 2021 prices, and thinking that they would get it and now that they've sat there long enough, they're starting to come back to reality and accept, oh, the pricing has changed because of those interest rates. So there are some good deals out there today. I mean, I got set an incredible deal last night for $225,000. That's like cash flowing at a 12% cap rate or something insane. It's five hours away from me, so I'm probably not going to buy it but I was pretty tempted because I'm like man for 225 It's kind of hard to pass up on. I think it was like for apartment units and like 20 or 30 self storage units. It was a pretty decent size property. Sounds like somebody needs to get out of it. So it's, it's interesting out there, Matt. I mean, on the legal side, are you seeing any sort of uptick in, you know, infighting between partners or transactions, where people are in more detail stressful situations?

10:02

It definitely seems so, you know, it's, it's hard to know for sure, because it feels sort of antidotal sometimes, right? You know, but it definitely appears that it appears like there are a lot of things that have been brewing, that people aren't able to hold on any longer, you know, more and more of those situations. Because in an up market, this is a pretty standard trend, I would say where litigation picks up in real estate in particular, you know, real estate construction picks up in a down market pretty often. Because in an up market, you know, if you get a if you get screwed over by your contractor, and you make $50,000, instead of it, you know, $100,000, well, you might just keep going along your merry way and buy the next flip deal instead of hiring, hiring legal counsel, right. But if on that same deal, you're underwater, and you don't really have a clear plan, that maybe that leads to partnership disputes, maybe that maybe you decide to sue your contractor. So I think that's a pretty normal trend. And it does appear that we're seeing that we're getting a lot more phone calls in inquiries and consultations and things of that nature, where people were trouble is being exacerbated by depleting funds, right? So, you know, people who have made who have had poor operations or made bad business decisions have no longer been able to float, what they're doing, right, whether they're contractors, real estate investors, developers. So that's going around a lot. And that leads to litigation, because they can't just write a check anymore, and get rid of it. So yeah, it definitely seems that way. It seems it seems like it's a trend that's just picking up more and more every month to me.

11:50

Yeah. If you're if you're joining us live from YouTube, Twitter or LinkedIn, jump in the comments when you hear what you guys are saying out in the market today. And let's talk about it. Logan, your brokerage firm does something pretty interesting. You guys are almost exclusively if not completely, exclusively focused on 1031. Exchanges. That's a very different market. Can you talk about what the 1031 exchange buyer is looking at today, compared to maybe 24 months ago? What's that landscape?

12:20

Yeah, well, I'll I'll tell you that they have dried up considerably. Obviously, with the transaction volumes going down, you have an uplink and a downlink property, right. And so the upleg being what you were, you want to sell. And so since deals haven't been selling, there's been less and less 1031 exchanges. And so we've been focusing a decent amount on just working with property owners and doing listings as well, I will say every, I don't know, 30 days, we're getting two to 310 31 Exchange kind of clients reaching out to us. And in the anecdotal evidence that I've got is a lot more people are willing to just pay the taxes and move on. And if they don't find the right property, or they can't buy it cash, that's the other kind of trend is, instead of putting debt on properties, right now, they might be, let's say they've got $500,000 of equity, they may be looking at just going and placing that and purchasing a deal all cash, taking the boot on the boot tax in regards to the debt that they didn't replace, but they're still you know, not paying the full tax on the whole thing. That way, they can go put debt on it at a later time. So it definitely has dried up a little bit, there's a little bit of a change in strategy with those investors. And we've been trying to find properties that have assumable debt for them to step into, because they are okay, usually putting in a little more equity for those transactions because they have it and just assuming a low leverage point, they can assume those those, you know, that previous debt that was on the property. So what are some trends that I'm sort of seeing the groups that we've been talking with in regards to investors looking for deals, a lot of new groups always right, you know, people trying to get started in a down market trying to figure out, you know, if they can purchase something, but there's been less than less what I'd say, you know, there's a big there was a big gap between where property owners were with what they wanted, because it was anchored in previous pricing versus what buyers were looking for. And that's come together somewhat, and I'll give you a couple examples. We had two or three listings that, you know, we were off at, you know, 435 45 days ago, probably 55 $65,000. And the property owner was like, Nope, I'm not I'm not gonna do it. I'm not gonna make it. And then we procured an offer at 15,000. Under lists. It's like, Nope, not gonna take it. Okay. Well, the last couple of weeks, they said, Hey, are those people still interested? I'm willing to do a price reduction. No, they're not interested because they moved on to their next property, but they're kind of relinquishing control of where they were anchored at from a price standpoint and coming down out just a little bit. I mean, we just had a deal, go under contract yesterday that the owner came off their price $60,000. It was like a $900,000 deal. And they previously weren't willing to do that. So that's kind of showing me at least on the smaller scale that owners are willing to negotiate a little bit more. And they're like, look, I don't think that the buyer for the for cat property is still out there. So I'm hoping that continues to happen, you know, it's always a changing landscape on that front, because, you know, you want to it's hard to price properties, and in a market that is changing, right? It's like, well, yeah, those you can look at comparable sales data. But if we go back 12 months, or 15 months, that might skew the data, we really gotta go back, like the last 30 days, the last 60 days this year, because that's what the lending requirements are in regards to these deals. And so I think buyers are understanding that I think there's little shellshock sometimes when they talk to lenders, about their leverage point that they can actually come into deals with. And so that's also creating a little bit of a distance between owners and buyers, because, you know, they're not getting 75 80% leverage anymore, because of the DSCR on these on these properties, and or just the banks willing to do that. So having a lot of conversations with lending, you know, just banks and different lenders to try to figure out where they're at how they can get deals done, what their appetite are. And, you know, not a whole lot of bankers really out there at the networking events, trying to find clients right now. I've got a couple buddies that are, you know, on the girls, my daughter's soccer team, and, and they're like, Yeah, we're getting, you know, I mean, our whole quota for what was one quarter last year is the full year, this year, you know, and previous to that, it was like, Yeah, we're actually getting plotted for getting loans paid off right now, right. So that has a big impact, because that's the largest part of the capital sec, on these real estate deals. And so that's changing landscape, because you might find a buyer that likes a deal, and then we try to go out and find a loan for them. And, and that comes back a lot different than what they thought and then now the deal is blown up and, and they're moving on, or they're not moving forward. So ever evolving. It's changing fast. But the only way that we're staying, you know, in the know is is continuing to do these transactions. And in talking to all these people, because like I mentioned, that data that everybody's kind of looking at is prior looking. And so we got to look forward to that to the next the next iteration. I don't know what your guys's thoughts are in regards to interest rates. But I don't see a real big need unnecessarily for folks to, to really cut interest rates. I think that myself and probably everybody here on this call is hoping for that. And once that, but I don't think that's going to be the saving grace this year. But again, we've gotten an election coming up in six months that we don't know what the heck is going to happen. So very interesting time to be a part of this, the hardest thing that and I'll get off my my talk track here in a second. But the hardest part, I think right now is when we're talking to a property owner, ethically saying that this is a good time to sell. And so I've actually been coaching some of my brokers to say, you know, what, if you, you know, took a contrarian view right now and said, Well, this may not be the right time to sell for you, because of these different factors. Now, we all know that people sell for different reasons. And you might have to sell and that's a good client for you. But going in and saying that we can go get this price per door, or this price per square foot in today's market, and it's a good time to sell. That's sort of a hard proposition. A lot of times unless we, you know, have a certain circumstance with that owner. So just trying to plant those trust seeds right now and say when the time is, right, let's reengage and keep and keep that going. And I'd say the same thing on acquisitions. I mean, you know, it's hard for it's, it's hard for us to approach the property owners directly that we want to buy their properties and say, well, here's what we can pay, and they're like, Well, I don't have to sell. So I'm gonna probably just hold on until, you know, I don't need to, I don't need to think about this anymore. And so all of those factors are kind of creating a relationship and in a baggage of the industry. That's just, you know, I think a lot of people are kind of getting fed up with and again, a little bit upset with and that's what's going to Carl's, I think the next kind of dislocation and opportunity is there's probably not like if you guys remember, during COVID, you know, there was a period of time where everybody was worried about if people were going to pay rent, and then and then the, you know, the, the interest rates were dropping. And then there was like a 30 to 45 day period where nobody was moving, or very few investors were moving one that did make really good deals because they got cheap debt, and they got a good price. And then boom, the transactions went through the roof, and everybody was buying everything and forecasts. So I foresee that same cycle or same kind of, you know, scenario happening here where there might be a low and that might be where some deals get done. And then You know, maybe a big a big boom in transactions after people kind of figuring out how to get deals done. So that's that's kind of what I'm waiting for.

20:07

Yeah, I, I was really hoping that we would see a couple of interest rate drops this year. I don't think that we're going to, if you track the data, I have a hard time arguing that we should have interest rate drops, which really sucks to me to be in this position, look at it be like, Well, I mean, spinning volume hasn't changed. I mean, the entire reason that interest rates go up is to slow the money that's moving through the economy, and that hasn't happened. So if the current interest rate hikes haven't fixed it, why do we think it's time to start dropping interest rates? It's not and it's kind of disappointing. But you know, I was looking up the cuz you know, you were talking earlier about the massive drops month over month for the last couple of years, when it comes to these, you know, commercial real estate investment transactions. I mean, there's a, there's a graph out there, by a very big commercial real estate data collection firm that has tracked single tenant Net Lease volumes by quarter for the last couple of years. First quarter of 2022, we had $11.1 billion and single tenant Net Lease transactions, first quarter of 2023, we had $4.5 billion in transactions, that's a 60%, decrease, first quarter of 2024 $1.3 billion. That's an 88% Decrease in 24 months. 88%. That's insane. And it's almost all because of interest rates. Because the single single tenant Net Lease transactions, Net Lease deals in general are all cap rate, interest rate arbitrage. So if you think about that, I mean, of course, the entire commercial real estate market hasn't been hit that bad. But for one sector of it to go down that much, is pretty wild, I would imagine there's some people that Marcus and Millichap that are no longer able to afford their, their desk, because that's pretty much all they do. So, you know, it's, it's rough out there. But if you're willing to get creative, the opportunities are still there. I mean, Matt, what are you? What are you working on right now? What are you most excited about?

22:36

Well, I'm excited about the firm, you know, obviously, but I'm also thinking there are some opportunities around the quarter one, one other trend I'm seeing is more and more conversations about mean the guy was just in the Uber with he's like trying to find ways to get more liquidity, right, I'm hearing that conversation a lot more conversations about I need to find a way to get more liquidity. You know, negative cash flow conversations, we were cash flowing, now it's not looking so good. Those sorts of things appear to be building up, right, you can only survive low or you know, tight or negative cash flow for so long. You know, you can only survive with low liquidity for so long. That appears to be a trend to me. And that's dependent on you know, what sector you're in a little bit, too. But so I certainly think there's some opportunities around and I think if you're looking for where the problem is, the where the problems are, and for the people who need solutions, and then you're figuring out a way to provide them solutions. There's always opportunities there. And it seems like there's going to be a rise in that to me. So I'm looking forward to just continuing to search the market, and just wait for those opportunities. And you just never know, I mean, you never know when all of a sudden, there's a six month stretch and forth in front of you, where you can just back the truck up and load everything up on there. You know what I mean? Like, we very well, I don't know if that's gonna happen, you know, but it's certainly possible to me in my mind mind that for people who are ready and who are not afraid of this market to jump in and take advantage of a lot of volume in a short amount of time after playing the waiting game for a year and a half. That wouldn't surprise me a lot. I'm not predicting it. But I'm hoping that I'm somewhat ready for it if it does happen.

24:31

Yeah, I dropped this in my office hours live stream earlier this week. But to your point, sale leasebacks right now there are going to be businesses out there that need liquidity, and they own real estate that's a very easy way for them to tap into trapped equity and I'm a very good buyer for sale leaseback so if you find a sale leaseback give me a call, I want to buy it. Maybe Logan Matt and I will all go in together on it. I'm and Logan will get you a side football. How about that?

25:06

Well, my assumption is my assumption is that's mainly a solution that you're able to provide to a seller who needs liquidity. And at the end of the day,

25:16

yes, exactly yet. I mean, I love those situations because it's a it's a major win win for both parties, right? Because you can kind of negotiate whatever deal works best for you both, right? Like, That's literally how those deals are designed. So yeah, they're, I mean, they're, they're just great, great deals.

25:35

I saw that you had a case study of kind of one that you put out, you know, not too recently ago, Tyler and I just kind of wonder, well, for sale leaseback to really need to happen or to have that work, what needs to be in place, right, because we get it's different, obviously, than seller financing, I think, in a lot of scenarios, but we get asked a lot about seller financing right now. Well, I don't know what your guys's experience is, but unless an owner really owns a deal, free and clear, I'm not sure they're gonna be willing to do seller financing because they're relinquishing control, which, you know, if they stop getting paid, and then somebody runs off all the tenants are the residents in the property. Now they're getting a property back that's vacant that they can't pay the debt. Right. So I mean, maybe let's walk through the the differences between sale lease backs and seller financing, and how those might get structured right now, because, you know, we haven't done a ton of those. And I obviously think that that's creative, but haven't been able to really find any situations for it to work. Yeah,

26:38

I'll touch on a kind of high level. And then Matt, if you want to jump in with like, the specific legal structures and stuff like that as to how it might be accomplished. But, you know, a sale leaseback is really interesting because you get to come in and negotiate. I mean, at the end of the day, we're buying investments, right. So if you can buy an investment, where you get to negotiate the lease on the front end, you know, for 100% certainty, you have a tenant in place with a lease going into the property. And it's different than, you know, like, go just going out and buying a take five, because that's typically like a developer that has built that that is trying to sell the building at a profit, the tenant typically wants to balance like, okay, what can I afford to pay on a monthly basis? And how much cash do I need right now, like, it's literally just a whatever game of how to play that. And banks love them, because you're going in with, you know, that one, the tenant gets a lot of liquidity, which, hey, who doesn't want a tenant that's got a lot of liquidity. You know, to you've got a brand new 10 year lease, right, or however long you set it up, I would recommend 10 years banks love that. Whereas, you know, on the seller financing side, you you may or may not have a tenant in place, they have to have the note paid off. Right, I just did a seller financing deal not too long ago sold, one of my buildings had seller financing, and the buyer only wanted to bring $150,000 down, but I had a $200,000 note. So we had to come out of pocket to pay for the note, I ended up charging them another $50,000 to buy the building in order to do that, just so that I could kind of bake that back into the price, which they were fine with. Because at the end of the day, I think it was like 200 or $300 more a month on a mortgage payment because I was charging them interest only. So it was like it's nothing. So, you know, I liked them both. I love how creative they both are. I don't know which one is necessarily better than the other. I'll take it all you know, it's kind of like brownies and cookies. Can you really argue which one is better? Why

28:42

don't have a rookie? Yeah, whatever. Brookie so on those seller finance or sorry, the the sale leaseback deals, is there any? Is there any worry or risk that if a tenant is signing a new lease with you? Yes, they're responsible for that lease, but my mind goes to Okay, well, are they selling the building? Because they're going to sell the business as well or they don't need the space or anymore? Like how do you get comfortable with that? Yeah,

29:09

so that's, that's a big piece of it. Right? You have to get comfortable with why the tenant needs liquidity. And that's typically the biggest issue that you have is why do you need the liquidity, okay? Your sales aren't where they need to be. And your manufacturing costs are high. Well, that's kind of a problem. You know, how do we solve for that? Like the deal that I'm working on right now we're getting the first year's rent paid up front at closing. So that'll at least give us 12 months to move forward on the deal. Hopefully it goes hopefully they stay the full 10 years. But you look at it and the great thing about a sale leaseback is that you can kind of price the property at how you want, right. We get to set the rental rate at plus or minus at 6% of market rates, right? And then we get to determine what the cap rate is to get to the purchase price, right? Because it all depends on I mean, there's so many different levers like just sit down with a tenant, have a conversation with them figure out how much cash you need, and what's going to get them to that. Because the way that we're buying this deal, if the tenant does go out, which, of course we hope they don't, it sits on 16 acres of industrial zoned land, and it's a 9000 square foot building. Right. So there's plenty of room for expansion, we could sell the building off and keep the land and do industrial outdoor storage, we could do industrial outdoor storage on the land, and, you know, sell the bill. I mean, there's so many different ways for us to kind of look at it, do not overpay, just because you're getting a great waste, you gotta you gotta stick with your fundamentals.

30:51

So got it, that makes a lot of sense. Yeah. And it's also I wonder what subset of properties do sale leasebacks and seller financing actually happen on? Right? It's like, you know, if somebody owns a $50 million building, what are they willing to sell or finance that that's a big? That's a big, that's a big question mark? And do they own it free and clear? Likely not right. So it's probably a subset of a size of a property, especially for the seller financing, but then also, on the sale leaseback side, it's like, if you have an institutional, it's gotta be Mom and Pop owner, right? Or the business is going to be owner user business user. So that's another subset of just the real estate in general, if you can specialize in that and be a niche and find those needles in the haystack. I think it is awesome. I mean, really awesome. I just wonder how can you actually go find those opportunities other than being on the phone and actually meeting with these business owners? Right? I mean, you got to be front and center with them. I

31:51

mean, more often than not, they're industrial users, right? It's manufacturing companies, they're in warehouses. And also, you got to think, too, I mean, they actually can be massive deals. Because sometimes these manufacturing companies get acquired by a PE firm, or a hedge fund that has a portfolio of these assets. And they say, Hey, we only want the operating business, we don't want the land. That's not something that we want to deal with. So they want to get out of it. They'll sign a 10 year lease or whatever, and sell the building. So they can get it off their balance sheets. It just depends on the structure of the company. But yeah, more often than not, you're absolutely right, Logan, it's the it's the one to $10 million deals, Mom and Pop small businesses and higher cap rates because of that, right. So that's, that's the nice thing about it, gents. Thanks for joining me today. We are a couple minutes over time. Matt, have fun in Orlando Logan, I'll see you in a week I'm going to be in Kansas City. So if anybody is also in Kansas City wants to hang out. I'll be at the CCC event on Thursday night there. See you guys then and catch you guys next time. 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. Care Central has the resources you need. Visit www dot cre central.com To learn