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Speaker 1: Let's say if someone sees an opportunity in la or

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Speaker 1: Detroit and they want to group get a group of

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Speaker 1: investors together, what steps would you have them take to

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Speaker 1: make sure that they are buying the right area and

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Speaker 1: that that building will actually be a success and they

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Speaker 1: won't go into debt. I try to acquire a property

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Speaker 1: while the commercial real estate market is down.

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Speaker 2: Well, I think they got to look at what the

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Speaker 2: other uses are. So, for example, in a office building market,

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Speaker 2: vacancy rates at you know, ten percent or below mean

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Speaker 2: that's a healthy office market. There are very few markets

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Speaker 2: in the country where that's the case. Miami is probably

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Speaker 2: one of them, Miami Beaches the second one. I think

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Speaker 2: there are very few like that. So then you look

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Speaker 2: at are what's the apartment vacancy rates and the apartment

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Speaker 2: vacancy rates, what are they running? And if they're running,

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Speaker 2: you know, vacancy rates on the apartment side, that is,

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Speaker 2: you know, maybe somewhere in the neighborhood of you know,

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Speaker 2: five percent vacancies and that's a healthy market. And in

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Speaker 2: places like New York, uh and and DC and even

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Speaker 2: Miami to a degree, these vacancy rates are even less

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Speaker 2: so New York's vacancy rate is less than two percent,

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Speaker 2: so that would mean it's very conducive to having new apartments.

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Speaker 3: And then once you look at vacancy.

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Speaker 2: Rates and you look at rental rates, and if the

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Speaker 2: rental rates, you know, can support the acquisition and the

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Speaker 2: conversion of a new building, then it makes sense to

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Speaker 2: do because you've got strong rental rates that are supported

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Speaker 2: financially and vacancy rates are low, which are showing a

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Speaker 2: significant demand. And same thing with hotels. I mean you

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Speaker 2: can look at converting office buildings in the hotels as well,

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Speaker 2: and so but it's these conversions are not for inexperienced people.

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Speaker 2: So they've got to make sure that they get a

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Speaker 2: contractor that understands conversions and architects that understands conversions. And

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Speaker 2: then if they're going to do something to scale themselves

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Speaker 2: as a group, then they want to hire a season

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Speaker 2: construction project manager that works for the owner with the

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Speaker 2: investment group and who has experiencing conversions as well.

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Speaker 4: So to build this Scots paper in New York like estimate,

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Speaker 4: how much would that cost?

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Speaker 3: About three billion dollars?

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Speaker 4: Okay, so how do you how do you go about

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Speaker 4: securing financing for these large scale projects.

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Speaker 3: Well, it's interesting. So the way you do this is

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Speaker 3: you go to a you.

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Speaker 2: Know, a group of banks normal you know, the traditional banks,

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Speaker 2: the JP Morgan Chases, the Bank of America's, you know,

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Speaker 2: the wealth banks, and so forth, and you go to

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Speaker 2: those banks to get senior financing. And that's a senior loan.

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Speaker 2: And normally you're going to borrow between sixty and seventy percent.

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Speaker 2: So let's use just for simple math that you know,

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Speaker 2: you're going to borrow seventy percent, so thirty percent is

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Speaker 2: going to be equity, and so thirty percent is nine

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Speaker 2: hundred million dollars so by affirmation towers. So then you're

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Speaker 2: going to go to a large global institutional, you know,

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Speaker 2: an equity fund, and you're going to go to maybe

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Speaker 2: a couple of them, and they are going to put

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Speaker 2: in somewhere between eighty percent or so of that you know,

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Speaker 2: nine hundred million dollars. So that would mean that the developer,

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Speaker 2: our team would have to put in ten percent, which

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Speaker 2: would be ninety million to twenty which is one hundred

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Speaker 2: and eighty million dollars, and.

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Speaker 3: So our group would put that up.

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Speaker 2: Most likely we would bring in a institutional general partner.

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Speaker 2: They would come in and they would put in half

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Speaker 2: of that or a little more. And so the developer

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Speaker 2: you know, generally going to put in between fifty and

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Speaker 2: one hundred million dollars between our growth.

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Speaker 5: So when you're approaching, obviously Affirmation Tower is a huge project,

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Speaker 5: but I know hospitality is something that you're well versed

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Speaker 5: as well. Last time we spoke with Uiou, you were

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Speaker 5: talking about developing hospitality throughout maybe the Caribbean.

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Speaker 3: What's the approach there, because it's it's.

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Speaker 5: Is it completely different when when you're trying to develop

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Speaker 5: in that space.

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Speaker 3: Not really.

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Speaker 2: In fact, Affirmation Tower is going to be residential. If

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Speaker 2: we get to build it, it will be the Civil

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Speaker 2: Rights Museum, and then it'll be two it'll be residential

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Speaker 2: rentals with affordable housing for then it will have two hotels,

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Speaker 2: you know, a boutique hotel and then an ultra luxury hotel,

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Speaker 2: and then above that on the top floors it'll have

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Speaker 2: luxury condos and then an observation deck on the roof.

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Speaker 2: So there's a big mixture of uses because the building

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Speaker 2: is a very big building, you know, a few million

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Speaker 2: square feet, and so mixing up the uses it's like

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Speaker 2: consider a building being like a neighborhood. Almost the building

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Speaker 2: of that size is, you know, like a neighborhood. You know,

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Speaker 2: so you're going to have a mixture of uses in

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Speaker 2: that building, and that, you know, helps drive the economics here.

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Speaker 2: If you're going to do a one off hotel, then

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Speaker 2: there the process is different because the first thing you're

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Speaker 2: going to need to do is determine who's going to

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Speaker 2: operate the hotel, who's going to brand, who's going to

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Speaker 2: operate it. And I wouldn't recommend building a hotel of

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Speaker 2: any type, you know, from either a three star or

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Speaker 2: a five star hotel. I wouldn't do it without a brand.

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Speaker 2: And then given that you know normally it's a real

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Speaker 2: estate entrepreneur who is building it, then you want a

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Speaker 2: brand to be able to manage the hotel to or

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Speaker 2: to hire a third party hotel manager that specializes in

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Speaker 2: managing hotels, so you get a company that does that,

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Speaker 2: and then then after that the exercise is pretty much

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Speaker 2: the same as building a apartment building or an office building.

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Speaker 2: The only difference is is that you have to furnish

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Speaker 2: the hotel, so you add another level of complexity because

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Speaker 2: you're hiring an interior designer and you know a furniture

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Speaker 2: purchasing agent and the law and the assembling of.

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Speaker 3: The furniture and the delivery of the furniture

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Speaker 2: And all of that has to meet the brand standards

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Speaker 2: of your hotel, brand and operator