WEBVTT - Blockchain-Based Real Estate Investing 0:00:00.160 --> 0:00:03.760 This is Bloomberg Business Week with Carol Masser and Jason 0:00:03.840 --> 0:00:07.360 Kelly on Bloomberg Radio. But this next guest is always 0:00:07.400 --> 0:00:10.680 up to something interesting. He's an investor, in entrepreneur, in 0:00:10.760 --> 0:00:14.800 real estate and hospitality, so involved in those worlds. Delighted 0:00:14.840 --> 0:00:16.520 to have back with us because it's been a little while, 0:00:16.840 --> 0:00:19.639 Stefan debates. He's founder and president of the asset management 0:00:19.640 --> 0:00:23.040 from Elevated Returns. They control the st regious Aspen Resort 0:00:23.040 --> 0:00:27.240 in Aspen, Colorado. They've got properties around the globe, about 0:00:27.240 --> 0:00:30.280 a one billion dollar portfolio. He's also founder and owner 0:00:30.360 --> 0:00:33.159 of Chess Club, so a lot of ground to cover. Stefan, 0:00:33.360 --> 0:00:35.040 it is so nice to have you here, and I 0:00:35.040 --> 0:00:40.160 know you're in Aspen. Um, how are you. I'm great. 0:00:40.360 --> 0:00:43.280 Thank you so much for having me again on the show. 0:00:43.960 --> 0:00:47.559 Uh No, it's just been a wild year, just like 0:00:47.680 --> 0:00:51.959 for everybody else. But he's been a good year for us. 0:00:52.159 --> 0:00:56.680 And uh I have personally relocated to us then Colorado 0:00:56.800 --> 0:01:00.680 and it's such a beautiful place, so difficult have a 0:01:00.760 --> 0:01:04.680 bad day investment. Yeah, that's definitely true. I do feel 0:01:04.720 --> 0:01:06.400 like I mean, we've done a lot of stories speaking 0:01:06.480 --> 0:01:10.440 of real estate. Uh, Steffan about um stuff. Excuse me, 0:01:10.600 --> 0:01:17.000 how um? You know? Real estate there has really skyrocketed 0:01:17.160 --> 0:01:21.080 because a lot of people like yourself are trying to 0:01:21.120 --> 0:01:24.000 find a place where they can sort of have it 0:01:24.040 --> 0:01:27.360 all in some ways, especially in a world where a 0:01:27.400 --> 0:01:31.039 lot of it is remote and there's less focus on 0:01:31.720 --> 0:01:35.720 spending lots of time in big cities. And listen, I've 0:01:35.760 --> 0:01:40.280 spent some time in aspin it is gorgeous. That's right, 0:01:40.440 --> 0:01:43.120 that's right. I think. I think what the pandemic is 0:01:43.200 --> 0:01:47.039 done and and still doing every day is it's just 0:01:47.640 --> 0:01:51.040 changed the way that people look at their life and 0:01:51.160 --> 0:01:55.360 prioritize physically what it is most important. And in my 0:01:55.480 --> 0:01:58.920 case it was definitely the case. And say, now that 0:01:59.040 --> 0:02:01.560 we've accepted the fact that we can do at least 0:02:01.760 --> 0:02:05.720 forty to sixty percent of whole work from home, why 0:02:05.720 --> 0:02:09.160 don't we go to a place where you have more 0:02:09.240 --> 0:02:12.359 books for the money and you enjoy actually a better 0:02:12.400 --> 0:02:17.079 quality of life. So you're right that the Britistate market 0:02:17.160 --> 0:02:21.160 in that spent is on fire. Uh, there is a 0:02:21.200 --> 0:02:23.720 wait list on all the school which has never heard of. 0:02:24.639 --> 0:02:27.560 And but still, you know, even if it's on fire, 0:02:27.639 --> 0:02:32.440 it's still a small town right, it doesn't look like well, 0:02:32.480 --> 0:02:34.000 you know, one of the reasons, you know, for so 0:02:34.040 --> 0:02:36.080 many reasons, it's nice to catch up with you, Stevan. 0:02:36.200 --> 0:02:37.880 And one of the things, you know, I really wanted 0:02:37.919 --> 0:02:40.000 to talk to you because Jason and I we talked 0:02:40.120 --> 0:02:43.560 so much with individuals in the real estate industry, and 0:02:43.680 --> 0:02:46.160 you know, we've heard a lot of things about you know, 0:02:46.200 --> 0:02:48.160 like you just talked about, we're finding out we can 0:02:48.160 --> 0:02:51.320 do like of our work from home. In our case, 0:02:51.760 --> 0:02:54.000 we're doing most of it, if not all of it 0:02:54.400 --> 0:02:58.120 at home and still doing a broadcast, um and so on. 0:02:58.440 --> 0:03:00.800 But I do wonder what kind the shifts do you 0:03:00.840 --> 0:03:04.239 think longer term shifts will actually stay with the real 0:03:04.360 --> 0:03:07.200 estate real estate sector. You understand that we hear about 0:03:07.200 --> 0:03:10.800 Silicon Valley people leaving Silicon Valley and they you know, 0:03:11.000 --> 0:03:13.360 tech companies and you can go work from home, and 0:03:13.400 --> 0:03:15.960 that means you can live wherever you want. So what 0:03:16.120 --> 0:03:19.239 within the real estate community, what if those trends caused 0:03:19.240 --> 0:03:21.880 by the pandemic will ultimately stick with us In your view, 0:03:23.520 --> 0:03:27.160 I think you're gonna have a short term impact then 0:03:27.720 --> 0:03:31.480 a probably a recovery towards what I call the mean. 0:03:32.080 --> 0:03:36.800 One thing that we should never forget we are social animals. 0:03:36.840 --> 0:03:39.640 So even so we want to go back in being 0:03:39.680 --> 0:03:43.800 a beautiful properties, we're still going to need to mingle 0:03:43.840 --> 0:03:47.960 and socialize. That is what makes human beings human beings. 0:03:48.680 --> 0:03:51.440 But I think that the first trend that we certainly 0:03:51.480 --> 0:03:55.640 do see is people are moving into suburban life. I 0:03:55.680 --> 0:04:02.280 think that cooperation will have probably satellite of peace in suburbia. 0:04:03.000 --> 0:04:06.120 I think that you're gonna see a lot less international 0:04:06.280 --> 0:04:10.360 traveling for business. So I think the travel business is 0:04:10.360 --> 0:04:13.160 going to be impacted for a long time. And and 0:04:13.200 --> 0:04:15.640 then we really to take a view about what's going 0:04:15.720 --> 0:04:21.040 to be the cross border traveling restriction. UH, people are 0:04:21.080 --> 0:04:23.599 going to be forced to have vaccination. People is going 0:04:23.680 --> 0:04:27.280 to need to carry a digital passport. We don't know 0:04:27.360 --> 0:04:32.400 that yet, but I think less international travel certainly for 0:04:32.440 --> 0:04:36.039 the next three years, and moved to suburbia at the 0:04:36.120 --> 0:04:39.360 trend that I can see, last thing for at least 0:04:39.360 --> 0:04:43.440 three to five years. Stefan debates his founder and president 0:04:43.480 --> 0:04:47.720 of Elevated Returns he joints on the phone from beautiful Aspen, Colorado. 0:04:48.160 --> 0:04:53.560 Um So Stepan talk to us about technology, the block chain. 0:04:53.760 --> 0:04:58.159 This is something that I'm guessing most people here back 0:04:58.240 --> 0:04:59.960 chain and real estate and there like I'm sorry, well, 0:05:00.200 --> 0:05:03.239 how does that off it together? But it's a really 0:05:03.960 --> 0:05:06.960 interesting and important innovation that you're working on. To tell 0:05:07.000 --> 0:05:11.159 us about it. Yeah, absolutely, And and you know, for 0:05:11.279 --> 0:05:16.240 whatever reason, the word blockshain always either going to excite 0:05:16.279 --> 0:05:19.479 people or they're going to scare them. The truly blockchain 0:05:19.720 --> 0:05:23.360 stands for in the mind of people, is a technology 0:05:23.880 --> 0:05:30.919 that enables to use programming, smart contract to represent an asset. 0:05:31.560 --> 0:05:33.839 So what we've done in our case, we took a 0:05:34.279 --> 0:05:40.159 real estate, we created a read structure, and we shocked 0:05:40.320 --> 0:05:43.440 the real estate in shares. And what we've done we 0:05:43.600 --> 0:05:49.359 created digital representation of shares and that basically allow people 0:05:49.440 --> 0:05:53.159 on the street to go and buy or sell shares 0:05:53.240 --> 0:05:57.040 into a trophy as set that they like. At the 0:05:57.160 --> 0:05:59.840 end of the day, what what investors have to remember, 0:06:00.320 --> 0:06:03.200 what they're buying is a share into the property. The 0:06:03.240 --> 0:06:08.159 blockchain technology, it's only the technological path that enables the 0:06:08.200 --> 0:06:12.560 transaction to take place. So I think that when we 0:06:12.680 --> 0:06:16.760 understand that we are in twenty twenty with beautiful innovation, 0:06:17.320 --> 0:06:21.080 and you think that most of paper transaction for real estate, 0:06:21.120 --> 0:06:25.160 it still happened on paper. You understand that it's probably 0:06:25.279 --> 0:06:28.600 room for a big revolution over the next five year. 0:06:29.240 --> 0:06:31.400 Well that's you know, it's interesting to hear you say that, 0:06:31.400 --> 0:06:33.440 because I feel like, right, just go back with it 0:06:33.640 --> 0:06:36.280 a year or so. I feel like ago, maybe a 0:06:36.279 --> 0:06:39.120 little bit longer than that, that everything was NonStop blockchain, 0:06:39.360 --> 0:06:42.320 and you know, if anybody talked blockchain in terms of 0:06:42.320 --> 0:06:45.560 their company, they just took off like a rock rocket rather, 0:06:45.839 --> 0:06:48.200 so I do wonder a little bit like her rock 0:06:48.400 --> 0:06:51.679 and then like a rock. Yeah, yeah, exactly, So Stefan, 0:06:51.839 --> 0:06:53.800 I mean you said about five years, I mean, do 0:06:53.880 --> 0:06:56.360 we start to see blockchain become much more part of 0:06:56.440 --> 0:07:01.599 kind of this accepted you know, financial system. Well, I 0:07:01.640 --> 0:07:04.720 think what you're gonna have, You're gonna have a digitization 0:07:05.160 --> 0:07:10.440 of financial product. Take a look communication, for instance, twenty 0:07:10.520 --> 0:07:14.440 years ago, you and I would would basically exchange information 0:07:14.480 --> 0:07:17.680 by sending a fact to each other. Then what happened 0:07:17.880 --> 0:07:22.600 We had emails technology taking place, and suddenly people are 0:07:22.640 --> 0:07:27.080 no exchanging communications through email, and they find new application 0:07:27.360 --> 0:07:31.960 for communications, such as scheduling to go for a glass 0:07:32.000 --> 0:07:35.000 of wine over an email, something you would have never 0:07:35.040 --> 0:07:38.560 done over a fact. What's going to happen is I 0:07:38.600 --> 0:07:45.160 think the digitization of financial product really enabled investor that 0:07:45.320 --> 0:07:50.200 are retail investor access to financial products that today they 0:07:50.240 --> 0:07:53.440 can't have access to. And I think that's going to 0:07:53.520 --> 0:07:56.880 be the true revolution. Because you were talking about this 0:07:57.040 --> 0:08:01.840 billionaire having a one billion of its residents. Thought for you, 0:08:02.520 --> 0:08:07.160 really the man on the street, the the the American 0:08:07.360 --> 0:08:11.880 person understand that real estate is the great investment. But's no, 0:08:12.120 --> 0:08:15.200 but very few people have a billion dollars to assemble 0:08:15.200 --> 0:08:18.400 a pot for you. So I think that once technology 0:08:18.520 --> 0:08:26.440 enaghbors people to actually participate and and enjoy the privilege 0:08:26.520 --> 0:08:29.520 that's a very few investors have today, that's gonna be 0:08:29.560 --> 0:08:32.120 the true revolution. That's funny that you say that. I 0:08:32.160 --> 0:08:34.720 was talking to you like the younger generation my family, 0:08:34.720 --> 0:08:37.120 and I'm like, you know, when you think about investing, 0:08:37.160 --> 0:08:40.800 think about smart real estate, and you're right, that's a 0:08:40.840 --> 0:08:44.640 way to potentially access those bigger deals that most normal 0:08:45.080 --> 0:08:49.400 individuals cannot do that. Um, so it's an interesting perspective 0:08:49.440 --> 0:08:51.040 on it. I wanted to ask you about chefs, the 0:08:51.120 --> 0:08:55.160 chef's club clubs, because you know, restaurants. Man, they you 0:08:55.960 --> 0:08:58.079 sounded rather a beat when we started, but I think 0:08:58.120 --> 0:09:02.319 about restaurants major city certainly in New York City. They 0:09:02.320 --> 0:09:05.520 have had such a tough time. We've talked with Daniel Blue, uh, 0:09:05.640 --> 0:09:08.280 so many others of the well known chefs within the 0:09:08.280 --> 0:09:12.240 New York um City world, and how are they doing. 0:09:12.280 --> 0:09:14.400 I've been to your Chef's Club in New York, loved it. 0:09:14.920 --> 0:09:19.680 Um are they open? How are they doing? Okay? So 0:09:20.480 --> 0:09:24.040 we actually, uh, we actually had a tough time as well, 0:09:24.120 --> 0:09:27.240 because not only we're in the food and beverage business, 0:09:27.280 --> 0:09:33.040 but all DNA was traveling chef bringing their experience from 0:09:33.080 --> 0:09:36.160 one country to another. So when you have closure of 0:09:36.320 --> 0:09:40.400 restaurant and you based on traveling and migration of chefs, 0:09:40.520 --> 0:09:43.480 you're having a hard time. So what we've decided to 0:09:43.559 --> 0:09:47.600 do is we've actually closed our restaurant in the big cities. 0:09:48.160 --> 0:09:50.440 We put the brand in the big cities in what 0:09:50.520 --> 0:09:55.360 I call hiber nation. We are keeping our brand in 0:09:55.840 --> 0:10:01.160 places like I spend open simply because we actually understand 0:10:01.160 --> 0:10:04.360 the wolves and we can actually make a business plan. 0:10:05.040 --> 0:10:07.760 I think what has been very, very difficult for the 0:10:08.000 --> 0:10:13.439 entire industry in the major cities is ever changing world 0:10:14.320 --> 0:10:17.600 and in order to stay in business, you need to 0:10:17.720 --> 0:10:20.000 raise capital. In order to raise capital, and you need 0:10:20.040 --> 0:10:22.600 to have a business plan. But if you are not 0:10:22.840 --> 0:10:25.560 able to put on paper what the sixth or next 0:10:25.600 --> 0:10:29.200 twelve months gonna look like, it is super, super difficult. 0:10:30.160 --> 0:10:33.599 A lot of our friends in in the chefs community 0:10:33.640 --> 0:10:37.720 have lost their job, lost their restaurant. It's really, really, 0:10:37.760 --> 0:10:42.200 really difficult for the industry. How much do do you 0:10:42.280 --> 0:10:46.080 think the hospitality business. We've only got about a minute 0:10:46.160 --> 0:10:51.240 left here, Stefan, how how much does it change permanently? 0:10:53.240 --> 0:10:55.920 Like I say, it's it's too early to tell. I 0:10:56.200 --> 0:10:59.720 I believe in human beings. I think we are so 0:11:00.000 --> 0:11:03.960 a animal. We're gonna want to still to travel. But 0:11:04.040 --> 0:11:06.000 I think for the next three years you have to 0:11:06.080 --> 0:11:11.240 look purely at resort leisure destination. This one will do well. 0:11:11.840 --> 0:11:15.360 I'm a little bit concerned about the hotel in big metropolitance. 0:11:15.440 --> 0:11:18.640 I think you're gonna see lots of bankruptcies and lots 0:11:18.679 --> 0:11:23.280 of defot on those properties. Yeah, yeah, it's really it's 0:11:23.280 --> 0:11:26.439 going to be difficult to say at least Stefan debates. 0:11:26.440 --> 0:11:30.640 Thank you so much, President of Elevated Returns joining us 0:11:30.679 --> 0:11:34.560 on the phone from Aspen, Colorado, Carol. Yeah, really nice guy, 0:11:34.720 --> 0:11:36.720 and I do love his perspective. In terms of what 0:11:36.800 --> 0:11:38.920 he can see and you know, you're right, Like in 0:11:39.040 --> 0:11:42.080 certain cities like an Aspen, right, they it's it's different 0:11:42.120 --> 0:11:43.960 in terms of how the virus is impacting it. And 0:11:44.000 --> 0:11:45.760 he says, you know, they can figure out the rules 0:11:46.160 --> 0:11:49.480 and figure out how to operate um, but there are 0:11:49.520 --> 0:11:52.199 often changing rules in the major cities just based on 0:11:52.440 --> 0:11:54.800 virus cases and what's going on. It makes it really 0:11:54.800 --> 0:11:55.800 tricky to run a business.