YOUR DAILY REAL ESTATE INVESTMENT SHOW
June 10, 2022

A Deep Dive Into Retail Real Estate With Heath Binder

In the 57th episode of Cash Flow Pro, we talk with Heath Binder, Senior Vice President, Investor Relations at LBX Investments. Heath comes from a real estate family and has been in real estate since 2001. Today he uses his experience in crowdfunding...


In the 57th episode of Cash Flow Pro, we talk with Heath Binder, Senior Vice President, Investor Relations at LBX Investments. Heath comes from a real estate family and has been in real estate since 2001. Today he uses his experience in crowdfunding and real estate to help clients understand the retail real estate market.



LBX Investments is a commercial real estate investment firm that invests in mispriced assets. The firm offers the following services: leasing, property management, asset management, construction, marketing, finance, and accounting efforts.

 

In this episode, we discuss:

  • The importance of location and understanding its surrounding market
  • What an anchor store is and its qualities
  • Leasing retail real estate vacancies the right way
  • Amazon and how it interacts with local retail stores

 

Learn more about retail real estate on this episode of Cash Flow Pro.

 

Find your flow,

Casey Brown

 

Resources mentioned in this podcast:

  1. https://www.lbxinvestments.com/
  2. https://www.linkedin.com/in/heathbinder/
Transcript

Casey Brown  0:06  
Hey there, and welcome to today's episode of cash flow Pro, your daily real estate investing podcast and YouTube channel. I am here today with Heath binder of lax investments. Now, Heath is taking a little bit of a different look at the real estate syndication and real estate investment world, because he is involved in open air retail, open air shopping malls, open air retail type investments. And the reason why I wanted Heath on here to explain some of this to us is because typically, we have been known to be mostly multifamily, some stuff, some self storage type stuff, but this is a different animal. This is a completely different animal that has the potential for massive profits with a weighted risk element now. What can you tell us Heath? How are you today? Good, how are you doing? Awesome man doing great, just glad to be here and glad to be here to talk about retail investing. And hopefully we can bring the listeners some value in learning a little bit more about it. So I like to start just tell me a little bit about yourself how you got started and what years maybe some different elements happened to that. And then we'll kind of go forward from there. Sure.

Unknown Speaker  1:23  
I mean, I some I'm with a firm called lbs investments. I run investor relations, then with LPS since the outset, and I've been in the real estate industry since 2001. So you know, but I come from a family where my mom is in real estate, my uncle is in real estate. So it was always around me. But you know, after college, I moved to New York and I took a job at Colliers. So, you know, been in the industry a long time. I actually, in in, I guess it was 2014 I took a job at a crowdfunding platform back to the early days of that industry. So that was your was that I'm sorry? I was 2014. Okay, so yeah, yeah, yeah. So you know, those back in the days when it was a novelty, and now it's become a lot more commonplace. But that's, that's, you know, kind of why I'm in the seat I'm in today, I, I started off running Investor Relations at one of the crowdfunding platforms, and then ultimately moved over to the to the buy side. And that stuff had a huge learning curve. And if it did it, yeah, it was a really interesting time, because the Jobs Act have just been passed. And, you know, just it triggered, it triggered a lot of entrepreneurial activity in that space. Yeah. And so I've been working with investors a long time. And, you know, in terms of, of, you know, this company, I mean, you know, it's interesting, right? Retail is, is a contrarian space. There's a lot of, there's a narrative out there, because you've, I mean, I always joke with people, we're the only sector that has its own apocalypse. And, you know, there's been some high profile bankruptcies, you know, Toys R Us and Sears, you know, kind of, yeah, he's been around a real long time. That city was the big one, I remember. Yeah. Circuit City. Right. And, and so people, you know, and then you see in the, you know, the headlines, just just, you know, people talk about Amazon and its relentless growth, and, you know, it all kind of combines to create this, this narrative. That, you know, a lot of people think that, that retail is dying, that, you know, we're all going to be, you know, transported, and we're all gonna be brought and we get carted around and self driving vehicles. And, yep. And, you know, we'll never leave our house. Right. And, and, you know, the reality is, you know, like anything, there's, there's, you know, there's sure there's some risks in retail, but, you know, there's, there's, you know, the baby sort of got thrown out with the bathwater in the sector. And, you know, we've been finding really interesting opportunities for the past several years. And and, you know, we've had a lot of success with our strategy there are, you know, areas of retail that we we focus on, there are areas that we we stay away from, but you know, broadly speaking, it's been a really good sector for us and, and happy to tell you more about it, kind of go whatever, like,

Casey Brown  4:40  
Sure. And so I guess some of the initial questions that we have now there's been a slight there's been a slight bit of retail development in say the last five years because basically from like, oh, I mean, I don't know what oh, 20304 through I wouldn't even say 17 and 18. Like, retail development part of it was just, like non existent. I mean, other than there was obviously a few projects taken off. But it was just, like I said, everybody, when you start talking about retail and retail investing, it's like, it seems to me like your biggest objection, at least from my standpoint, if you call me as an investor relations said, Hey, man, I got this wonderful deal over here. It's got an anchor store, and it's got five other tenants, and this is what we're doing. And I'd be like, Okay, how, how Amazon resistant? Are those tenants? At least that's my initial, like, jump to? And I'm sure that you have an answer to that objection. But, but in a post, Amazon is here world.

Unknown Speaker  5:44  
You know, what are the common objections you have to people that look to invest in the retail space? Um, well, so, you know, first off, when we talk about retail, you know, I always try to segment it for folks. Because if you're just looking at the space, and you just think, you know, one over the whole thing, I mean, yeah, so so, you know, we focus on are, you know, we don't buy enclosed malls. And that's, that's where I think the largest concentration of problems has been. Yep. And, you know, I mean, look, there's certain, I guess, cliches or adages that, you know, we all know, in the real estate business, you know, one of the most famous is location, location location, we always look to do is to buy a really good piece of real estate, it's really our starting point. And, you know, what you find is there's, you know, there's good deals in retail, there's bad deals in retail, there's good deals in multifamily. There's bad deals in multifamily. I mean, it's it, it's, you know, we try to do is we try to buy the good deals in retail, and these are, you know, centers where, you know, they're, they're centrally located. I mean, we've we've all seen it, I mean, if you go to, you know, the local supermarket or or TJ Maxx, or or, you know, kind of go down the list of tenants that are really thriving, you know, you'll see these, if you go to the best center in town, it's typically very busy. Doesn't matter what time a week it is. Right? And, you know, so we buy, we just look to buy very well located assets that have good Ingress, egress visibility, you know, they have strong tenants assets that we think that, you know, good times and bad are going to, you know, continue to attract the man from from shoppers and retailers. That's, that's, I mean, I wouldn't call it secret sauce. But that's just kind of how we how we think about the acquisitions that we make. Sure, and as far as you know, your question about objections, you know, certainly I get people telling me, you know, I'm afraid of this tenant, I'm afraid of that tenant. I had somebody tell me, for instance, we were looking at a we're looking at a deal right now. Or buying a deal right now. It's got a it's got a Hobby Lobby, and I had a tenant tell me like, you know, I don't like Hobby Lobby, there's nothing that Hobby Lobby does that to your investor yet investor tell you that yet an investor, I showed him the deal. And he said, You know, I there's nothing that Hobby Lobby does that can't be replaced by Amazon. And I said, Well, you know, that's not true. You know, and I showed him a, you know, whole big write up that we have on Hobby Lobby, because we do a lot of financial analysis around the tenants at our centers. Sure, the company has been around for decades, they're growing, they're opening stores, they have no or hardly any debt on their balance sheet. They do. That's the biggie, I think the biggest part about Bobby is the debt, the debt that they don't bring to the deal, nothing that they're, they're run super well, they do like 6 billion a year in sales. And, you know, I because of my seat, right? I work with people all over the place. And I, you know, I told him, I said, look like, you don't also understand, I don't think you understand that, you know, the, the, you know, what is popular in a major urban market, you know, might be different from what's popular, and you know, the middle of the country and

Casey Brown  9:21  
well, and here's the thing, it just occurred to me when you talk about Hobby Lobby, to me, when my wife wants something. He doesn't want to order it. She wants to go get it. Yeah, exactly. crafts for the kids for school, the kids got to have crafts. Well, well, you and I both know, and I'm sure every listener that hears this knows that none of that crap gets done until the day before or the day before you can't order it. So you have to go out there and get the foam balls and the foam cylinders, and and and the paints and all that stuff. So I think there's a certain element of that that that is the is going to come back to real life living like like this is, this is the reality in an ideal situation, yes, you ordered off Amazon, you save a third of your money and you go on but there again, I don't know that I've ever done a school project with any of my kids and we've got five of them that any further before then the day before.

Unknown Speaker  10:21  
It's funny I told a friend of mine about the about the guys comment and she said, you know, he just doesn't understand suburban housewives. That's what that's what he told me spot on and and I said look, I don't you know I don't go and I don't go and craft stores. It's not my thing. You know, my wife loves to take our kids and they spend a lot of money, man. I mean, it's it's crazy the amount of money people spend when they go to these stores. Hey, and I don't know that my wife's ever bought anything at Hobby Lobby that wasn't on sale. I wonder if that's planned. It's all always on sale. And I tell her I'm like honey, they can they can tell you it was at whatever price they want to tell you it's on sale. But me it's a good deal. You're getting a discount. But the but so a couple things. Right. So one is, you know, there are a lot of retailers like that, that have a lot of a lot of strength and financial strength they they're expanding are opening stores man going on a list of them. There's you know, companies like Ross and TJ Maxx, and altos another one, I mean, these are companies that have, you know, fantastic financials. The pure fundamentals, you know, are great, you know, once you look at, one of the things you'll look at, is when they, when they sign a lease, you want, you want to make sure they're gonna be there a long time. And, you know, a lot of these companies, they have staying power, right. The other thing maybe to point out is, you know, I think people like to categorize things. And so it's easy to say, well, Amazon, you know, is is, you know, the online category. And then, you know, the offline category is, is, you know, the bricks and mortar guys, in reality, what you've really seen, you know, develop over the last several years on the closest door, what, what you've really seen develop over the last several years is, you know, the largest, most sophisticated retailers, not all of them, but most of them have really figured out ways to put a lot of money into their online platforms. And they figured out ways to to integrate their various platforms so that you as a shopper can get what you want, when you want it. And I think you know, I think you had mentioned we were chatting earlier and you'd said something about you know, Circuit City going out was the something that you would remember what's interesting to look at is in that same space look at a company like BestBuy Yep. Which, you know, they are neck and neck with with Amazon and the electronics section. And if you ever go and like they were close to going out not too long ago, 10 years ago, you know, they were they were really, you know, I don't know when Circuit City went out, but it was around that time. And you know, BestBuy was certainly viewed as a risk. And what they did is they completely reshaped their business strategy. They they invested heavily into their people, they invested heavily into their stores, they completely reconfigure their stores. Remember, I remember going into BestBuy years ago, and it was like there was just like, CDs and DVDs and like, that was the experience? Yeah, well, if you go in, there's like a little corner section maybe that that'll have some some titles. But you know, what they've done is they've, you know, carved out all these different zones for all these different third party retailers to sell products. And in, they've invested heavily in the stuff you don't see. Right, the back end supply chain investments, they've made mean that now if you want something, they can get it for you really quickly invested in price matching. I mean, just there's a whole list of things that they've done, well, they've integrated, they've kind of taken what Amazon does, and they've overlap those two because you can basically have an internet purchasing experience with a going to the store experience all in one correct kind of play. So you know, what, what constitutes?

Casey Brown  14:19  
There's a big question that I've gotten, I'm sure it's not going to be a short answer, but maybe we make it as short as you possibly can. But what constitutes an anchor store? Like first of all, an anchor stores obviously at the end, but are there certain like what kind of criteria what what constitutes an anchor store?

Unknown Speaker  14:40  
Sure. And I think what we can do is I can kind of explain to you what an anchor is and how it kind of fits, you know, at a center that will buy and then talk about some the different ways that we will generate upside, right? Because it's all tied to that in a sense. So An anchor is going to be a, it's going to be a national retailer, a lot of the time, it's gonna be something like a supermarket, they're gonna have a bigger footprint, right supermarket or Hobby Lobby or, you know, maybe a target. Just, it's basically there's a trade off, they either own their own real estate, or they pay a lot less on a per square foot basis than the other tenants at the center. Okay, in exchange for that, they're bringing a lot of the traffic, right. So if you have a, you know, really good save a Kroger, like a really good supermarket, you know, and maybe their pen, you know, half on a per square foot basis, but it's on a larger box. And what they do is like, they'll have some rights over, you know, kind of what you can and can't do and your center. But you know, they are the the main attraction, right, that's how to kind of think of an anchor. Now, what we do, a lot of times we'll buy centers with, will buy grocery anchored centers, and we'll buy non grocery anchored centers, but we will buy centers, a lot of times from big institutions that will have anchors in place. What one of the two kind of key ways from a number of standpoint that we generate upside on our deals. One is, we'll focus on the smaller shops, on the leasing of the smaller shops, okay. Because if I buy something from a, let's say, I buy something from a read, it might have the anchors in place, but then some of those small shops and like a nail salon or, or, you know, a martial arts place or restaurant, you know, that guy who's coming in and taken 3000 square feet, and paying 25 bucks a foot instead of you know, 30 bucks a foot instead of a 10 or 15 that the anchors pan, yeah, you start you do one of those leases, doesn't move the needle that much. But if you do like three or four of them, it starts to really move the needle on your, on your your metrics. Yeah, so we'll focus a lot on the shop leasing, when we when we buy a center, it's an area that we've really been able to generate upside across our portfolio. The second is out by the street, you will have sometimes you can't pads, you'll see. We call them out parcels, but you'll see you'll see like a like a McDonald's or just you know, I don't know, a Chick fil A somebody, somebody that you know, some restaurant chain or or maybe like a Jiffy Lube. They're, you know, they'll it's basically they take space out by the street. Yep. And that's the stuff you see when you drive by because it's closest out to the street. Those Outparcels tend to trade separately right in their own market, they trade to 1031 investors and institutional buyers. So that market operates differently than the multi tenant retail students or will buy a center that will have an anchor, it'll have a lineup of shop spaces next to it, and then out by the street, we'll have some Outparcels and we can generally let's say we buy a center at a you know, seven or an eight cap, okay, a lot of times sell those Outparcels at lower cap rates. So by doing that you're basically been you know, because you bought that as part of the center. So you know, let's say you buy center to seven and a half cap when you sell the Outparcels six and a half cap you're playing that arbitrage and you know it's a nice outcome investors and if you have a center that has a few of them it really does add up and move the needle well and that's again like so you know, the first thing that my mind goes to is like and again this may be a little bit of small town thinking if you will, but a lot of times the

Casey Brown  18:52  
we're not necessarily looking for Mom and Pop kind of places you're looking for like pet stores that might be nationwide pet stores or or makeup stores or I'm just trying to you know, and I guess something that may fall between an anchor and a small spot would be like an Apple store or something along those lines

Unknown Speaker  19:15  
but it's just it's interesting to me how the formula and you start looking at the return and then how some of those big box stores can can can like they're almost like the Facebook ad I guess if you will where they're they're pulling the attention somebody's they're buying whatever and they're like oh shoot I needed to go get a lizard so they go down to the pet store and they buy a lizard but around like some of the small towns it's just hard to imagine the big retailers or even medium retailers going in there to to Kroger anchored store or something like that. So so we don't go to we don't go to super small markets typically We will go tertiary we have I mean, it's actually it's one of the maybe the best performing center in our whole portfolio is in South Augusta. Which is, you know, it's not, it's not a, you know, it's not Atlanta, you know, it's if we own in some bigger place, we actually, we own outside of Nashville we own going outside of Charleston. We will go tertia. We don't go super, super small, though. Typically, that's, you know, we want to we want to make sure kind of going back to a comment from before, we want to make sure that whatever site we own is going to be in a good position to attract demand. Yep. So now as far as the type of demand, we will definitely work with local retailers. Actually, our model. You know, one of the take differentiators for us is we're vertically integrated. So our head to leasing sits in Charlotte, but almost like a, like a GC would work with subcontractors for deals that are, you know, outside his drive time, like, like we buy a deal in Chicago by deal in Indiana or just anywhere that's more than a few hours away from him. Yeah, we'll work with a local leasing team, because it's really important to be able to log into to knock on doors and get the get that local guy to come in and you know, in lease space. Sure, sure. Yeah. And it's, it's so I don't know, like I said, the retail space. And like I told you, prior to the show, the retail space is just out of my wheelhouse as far as my knowledge and but are the cap rates compressing in the retail space, much like they have in multifamily? And are they still like 678? Yeah, they definitely not like multi. I mean, one of the one of the most interesting aspects of retail, you know, open air shopping centers, in particular in the current climate is that even though there's been some cap rate compression, you're still you're still buying deals at Cap rates that are well, well north of where you're seeing multi cap rates? Sure. So you know, we're buying it buying a couple of deals right now the cap rates are starting with a seven. Right? Which Yeah, actually a little higher ones, I think a seven, three and one to seven, five. And this is both these, these both of these centers have a really strong lineup of national tenants. Yeah. So you know, and to that, right, one of the one of the nice aspects of our deals and everything we do is deal by deal, we don't have a fund that we're offering at this point. But every deal that we've done, it's it's had positive leverage going in, then all that means is, you know, the cost of our financing is cheaper, then, you know, you're you're going in cap rate. And then going back to what I was saying about Outparcels, you know, what you can do is you can sell off pieces of a center a lot of the time, and use that seven and a half cap that you buy something for as you sell off Outparcels turns into an eight cap and eight and a half cap and then then your debts not changing, right. But you end up owning a center where you might have 450 basis points spread between your your cost of debt and your you know, your your cap rate the agenda, pounding it out so

Casey Brown  23:20  
well. And you're also I guess, at the same time, you're also gathering an audience that might be an intermediary audience between your between your, your anchor store and your pet store, by how like you said, having a Jiffy Lube or McDonald's, or even, it could be beneficial to the anchor store, because then people come there and then they can grab something eat on the way out. I mean, I guess that's that's probably the patterns and stuff that I look at is is what do people want, once they get where they're going? And that's what we look at in multifamily. Once people say, hey, yes, I'll live there. What do they want to increase the quality of their life? And again, it's it seems like some of that stuff when it goes together. And it's, it could be tough to calculate, I guess, put a calculator will number on this. But at the same time, I guess that just seems like an added benefit to me anyway. Not only are you increasing your revenue, but you're you're also increasing your cap rate, but you're also potentially increasing the traffic which is going to make the spot more valuable over all right.

Unknown Speaker  24:32  
Well, it's interesting because what you're talking about, and it's you know, it's a sophisticated way of thinking about things. You're talking about merchandising, right, you're talking about, you know, you have a center, you know, how do you how do you lease up any vacancies in such a way that you don't chunk up the look and feel of the Senator? Yeah. Because, you know, for some senators, certain tenants might be really appropriate. You know, but they might not be appropriate for the other center. Right? We own for instance, we own a center in Memphis at all. A little bit. Yep. All right. So we own we own a, we bought last year, we bought a really, really nice Center in Germantown, which is pretty affluent. South Florida is very nice. Yes, yes, it's super nice. And so we, we've got a great, it's a great piece of real estate, it's, it's right in the center of everything, it's got a best buy in Rei. And when we bought it, there was a, there was a vacant, stapled, well, they hadn't gone dark, they've gone dark, but then left yet there was a staples that they'd been paying rent, but the rent was due to, this is a known vacancy that was coming up, they, it basically, we're not going to renew and we were going to have 18,000 square feet to lease. And so we've given ourselves a few years to lease it. And, you know, we're in talks with some different groups. But, you know, there were some national chains that we potentially could have just come in and put them in there. But it wouldn't have fit with the merchandising and with the clientele that actually goes to the center. And to your point, you have to be really, really careful about, you have to be really careful and thoughtful about how you at least at the center, because you want to make sure that, you know continues to you know, always be attractive and people live around it. Yeah, you want to make sure that somewhat goes together to I mean, in a way, again, I guess you wouldn't want to put us staples in one in an Office Max at the other. I mean, well, there's restrictions. So a lot of times what will what will happen is, you know, a tenant will particularly for national tenant, you know, they've all got legal departments, so what they'll do is they'll, they'll sign a lease with you, you know, but then as a stipulation within that lease, they're going to say, Well, you can't have one of our competitors, you can't have a direct competitor in the same center. Yeah, so the one of the interesting aspects of, of retail that, you know, maybe you don't see as much in other other sectors is, when you get into the leases, there are a lot of these sorts of restrictions and in just, you know, kind of risks to think through. We're very, very thorough when we're analyzing our deals, because we want to make sure we understand what all those restrictions and relationships are. But it's definitely definitely something that comes up on a lot of deals. Now, when you're looking at, so obviously, somebody can't just walk up to you and say, hey, I want to lease this 18,000 square foot building, because we're going to do, we're going to become car mechanics. And so what types? So obviously, financial strength, and some other stuff comes into play. What types of things do you all look for in new tenants that have the potential to be a big draw? Like, obviously, the the nationwide companies, you can go through their financials? Because they're probably public, due to their stock trade, their stock being traded on the on a public platform, but what else do you all look for when you're, when you're picking through some of these things to make sure that you've got somebody that, for lack of a better term? Are Amazon resistant? I guess? Um, so I guess a couple things. See, you always look at the use. Right? And that sort of goes to the the first part of your question, you'll look at, you know, what they'll be using the store for, you want to make sure that anything that they're going to do at the center isn't going to run afoul of of what's what's been agreed to and other leases, there's a document that kind of governs the relationship between all tenants as senator, it's called the reciprocal easement agreement or an RDA for short, okay, you just any tenant that comes in, you just got to make sure that everybody's playing nice in the sandbox together. Because if they're going to come in and sign a, you know, a 10 year lease, you know, then then everybody's gonna be, you know, at the Center for a while, so you got to make sure that everybody, everybody's getting along.

Unknown Speaker  29:25  
As far as you know, Amazon resistance. We do a lot of credit analysis, for sure. To your comment about these bing, bing public companies, a lot of them are so you know, and even if they're not public, they're private. There's a lot of information out there about them. Yeah. So, you know, we'll certainly look at things like you know, their business model and how it fits and kind of what they're doing from a corporate standpoint. Case in point, you know, box size is pretty important, you know, like a Burlington came to us. Well, I mean, is kind of a silly example. But if we saw center and it had, you know, like a Burlington or somebody like that in a in an 80,000 square foot box, yep, would probably struggle to get comfortable with it, because the trend that you've seen over the last several years is that they've been moving into smaller footprints, you know, like 35 40,000 boxes, even outside of just straight financials, you could potentially be looking at their past, what they, how their business model has changed in the past. Oh, yeah, yeah, yeah, well, we'll look at that we'll look at you know, what there. Because there's, there's two things you're thinking about, right? You either have a vacancy that you need to lease up or, or you have a tenant that's in place when you're buying? Sure. So what you need to do is understand, you know, you want to understand how they're doing at the center, if they're there, you want to understand, you know, broader corporate trends. Certainly, they're, you know, credit analysis goes into that you understand what the market rents are for that box, you know, case in point, you know, will underwrite deals where, you know, maybe we have a tenant that's, you know, in there, you know, 15 bucks a foot, but if we think that the market rent for their space, if we think they struck a deal that is, you know, too expensive, you know, then then we can be really cautious about how we underwrite, you know, what what, you know, an extension might look like, because, you know, they may opt to, you know, come back to us and try to negotiate for, you know, something different. Sure, probably average, take how many years they have left at that square footage, price, and then, and then go that many years out, and then double it try to get an average of where it might be, I guess, right? It just, it really, it really depends on on, you know, kind of who they are and how they're doing at the center, we'll look at pretty interesting innovation that you've seen is, there's location data now. So we can look at cellphone traffic to see, like, I can look at it, I can look at a tenant, and a retailer, and maybe they have 50 locations in a state. And I can look at how, you know, a specific locations stacks up versus the other 50. Yeah, yeah. Right. So there's all sorts of data points, but one of the things that you look at to kind of go to your question about Amazon, some retailers, they don't really need to have an online presence in order to thrive. So some of the some of the best examples of this are, you know, maybe the dollar stores or, you know, some of the off price guys, you know, like, like Burlington or Ross or TJ, you know, like the the idea of, like, if you go to a Ross, for instance, or a TJ and I think TJ is the one that always talks about the treasure hunt experience. Yep, people like to go and shop and see what they're going to find in store. So it doesn't lend itself as much to, you know, to really strong online capabilities. Yep. But that is hard. When you go for a pair of jeans, and you end up with a water bottle is very, very difficult. You end up with a water bottle that TJ only had, that they ended up with five of them across 100 stores, and you just my mom will go into TJ she'll come back she'll like 50 plates, she'll have you know, 10 pairs. I mean, it's I'm a I'm a regular victim of TJ Maxx. Yeah, yeah. It's like, ex wife, they all go to TJ and everybody buys and buys buys. Yeah. Yeah, it's, it's, it's a great business model. But one of the things you want to look at with respect to Amazon, so you know, I think a lot of times people think, Okay, well, you know, people are shopping more on the internet. So, you know, it's damaging bricks and mortar. You know, the guys who have struggled the most in bricks and mortar, you know, they, they, a lot of them did mall tenants,

Unknown Speaker  33:54  
a lot of them have been over leveraged, right, you've seen, you know, companies get bought out by private equity shops, and you put too much debt on their books. And, you know, one of the interesting aspects of retail is to space that you got to innovate or die, right, that's always changing. And so you the retailers that you know, have struggled the most with, with leverage, you know, they're taking any free cash flow they've gotten they're paying paying down debt, they're not investing in, you know, in new technologies and new strategies and just investing in their business and you've seen, I mean, there's a lot of retailers that, you know, that's that's been, I'd say, the the biggest contributor to their to their demise, not, you know, because I mean, it's kind of funny, like if you think about I mean, look at like a, like a target versus, you know, kind of an old fat like, maybe a Sears I don't know, but look at look at what target does versus what you know, maybe an old fashion department store does. Yeah, that you know, has gone out of business. It's not like what they're selling is my I was different. Right? But you know, then you look at at, you know, how much more sophisticated target is? Yeah. You know, and how they've integrated their online and offline platforms and how they've introduced, you know, like, white labels. And just, I mean, it kind of started taking the offline and online experience and kind of smashing them together and saying, Hey, guys, this is this is what this is the new normal and target did a really fabulous job. I mean, targets done a fabulous job. Yeah, we have, we have a bunch of target shadow anchored centers, we, you know, we love buying them. And well, listen, we are getting near out of time for this episode. And I've got a couple of questions. There's not a right answer. There's not a wrong answer. As the listeners know, there is definitely a time some interesting answers. So what is the best book that you recently read or are currently reading? It is called, I can't tell you what the exact title is. I'm reading a book about Hold on. I'm reading a book about the St. Louis Cardinals. Yeah, I just started it. That's funny. You do by the way. Oh, is that right? Yes. Yeah, so it's I think it's a rookie in the Redbirds. Hold on. That's a pull it up. And I'll tell you I think it's called rookie in the Redbirds. It's, it's basically it's about the history of the St. Louis Cardinals and then about branch rookie, you know, who everybody associated with Dodgers because, you know, breaking the color barrier, etc. But, you know, he also was, you know, key figure in, in developing all the infrastructure that made the Cardinals as great as they are today. So, anyway, I started just started reading that a couple weeks ago. It's pretty interesting. Awesome. There's a there's a book called A Bitter Brew, that a Bitter Brew, Bitter Brew. And it's, it's actually about the Cardinals and the Bush family. And they're, they're how they kind of, I'm gonna say crosswind because they want I think the Cardinals were owned by the Bush family for a while. Yeah. But it just it's it goes into how the beer industry then ended up acquiring the baseball. So it was pretty neat. So I'd be one each each checkout to so Alright, so what is the best trip that you have? What is a dream vacation that you've taken or hoped to take in the near future?

Unknown Speaker  37:39  
We we went to Iceland a couple years ago in the winter. When what's what's the or Oslo or where did you go?

Unknown Speaker  37:47  
No, we went to Reykjavik. And then and then just you basically you drive around and you feel like you're on on Mars or something. And it's a different world. Really? Yeah, it's unlike anywhere you've ever seen. I mean, although, you know, then I got friends from Alaska. Tell me I can just go to Alaska. And it's just just as striking not as far. Yeah, but yeah, I just wanted was pretty remarkable. That's awesome. And that's great. I think that I think that's probably one of our favorite questions that the listeners like to hear where people have been and because all of us have those trips that we'd like to take and see the world. So alright, so if the listeners heard something that that resonated with them, and they'd like to reach out to you what is the best way for them to get ahold of you? Sure. So lb x investments.com, is our website. And people can always email me at Heath at lb x investments.com. So H EA th and l v x investments.com. And that's L B as in boy X investments as my listeners go, I'm always big on making sure that we get the portals correct. So we'll be x investments.com So thanks so much for being with us today. We appreciate everything you've given us and and we hope the listeners have found some value and maybe like I said, if you'd like if you're interested in investing in retail or if retail wants to become a part of your diversification strategy, give Heath a call or give shoot him an email and and give him a chance because we've done our best to make this discussion as lively as possible. At times, retail stuff is is more about the numbers instead of the lifestyle like we talked about so many times in multifamily and, and that you know, when you start talking about lifestyle things like adding arcades and adding weight rooms and doing stuff like that, that people really get to talking about or get energetic about. And then you come in and you're like yeah, we we added another basis point to this by doing that, you know, that's the kind of stuff that so we've done our best to make retail discussion. Interesting. But again, if you're if you're looking for that diversification part of your portfolio, shoot Heath an email and let him know and get to work. Go with them because I can guarantee you that lb X will will give you what you're looking for as far as that goes so hey thank you again thanks so much

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