Episode Transcript
[00:00:06] Speaker A: This is part two of the interview with DL3 Realty.
I had a hard time. I was trying, I was thinking of a few projects of yours to kind of single out and tell a little bit of the deal story too.
And you could tell me if you want to talk about others. But one that came to mind immediately was it was started as the Discover Call center, now Capital One Call Center.
You know, I know a little bit of vacant big box retail. Why don't you tell us how that project came to be in as much detail as you care to share. And then also the effect it's had on the neighborhood since.
[00:00:39] Speaker B: Yeah, we're really proud of that work. Should be, you know, the, you know, there's another, you know, sort of factor, those early shoots, we call it sometimes innovative developments in that factor of venture development framework.
And so when you're talking about innovative developments, they help to catalyze other things going on around them. You hear me talk about it over and over again. We're not solo, you know, we are looking to bring others into the effort, the revitalization effort. And I'm really focused on saying revitalization, not gentrification, because gentrification is letting the, the market just work its way unchecked, unfettered. Whereas revitalization is an intentional approach to engage local residents and existing businesses in the investment and the process of renewal that you're pursuing.
So there's framework around there, there's strategy. You know, this is not, you know, we'll just stick that here or do that there. Now in terms of the discovery and also the Blue Cross Blue Shield development in Morgan park, we did too. And so you have to take yourself back to pre Covid and if.
[00:01:59] Speaker A: Okay, it's weird. Cause a lot of people mark time with COVID right now. Right. So you're thinking about things. You never care, you know.
[00:02:06] Speaker B: Yeah, I feel, I mean, it's crazy. We're more than. We're five plus years, six years from COVID Right. But that was a traumatic event. We all, it was a mass trauma event that we all experienced together.
Right.
911 was before that and other things. But this was a big one. It was global.
But the thing is that. And maybe not even as much as the healthcare issues, although we all probably had some family members impacted. But it was also the response and the way the economy had to respond to that moment.
But prior to that there was something else going on, which was Amazon was laying waste to the retail environment. People were talking about, are we ever going to shop in Brick? And Mortar again. And I think one of the steadying forces, you have to be, as not only a hobbyist historian, so that you have witnessed, seen, or studied previous movements and ebbs and flows not only in a specific geography, but in a macro environment. It gives you some faith, some. Some resilience, some ability to withstand the swaying winds from time to time, because
[00:03:20] Speaker A: otherwise you get kind of wrapped up in the group. Think of today, Right. And it's just you get so consumed with what's going on with the mass people. It's hard to be contrarian or entrepreneurial even in that setting.
[00:03:31] Speaker B: Right. So you got to. You got to stay grounded and say, yes, I can, you know, know what's going to be more of a durable trend.
[00:03:37] Speaker A: Yeah.
[00:03:38] Speaker B: Versus something that may just be a temporary sort of movement. Right.
But back then, Amazon was laying waste to the retail environment. Brick and mortar was going out.
And now we've seen that online, it's settled around, what, 25% of sales. And people are still humans. They still want to come together. They still want to have an experience.
They don't want everything delivered.
[00:04:02] Speaker A: Even the integration of retail that clicks and bricks on how you have to still have a presence in the neighborhoods to be relevant and be able to track something on or to be able to experience if you want to go shopping with your friends. So I think we've seen now how they fit in together. But, yeah, at the time, it was like everybody was calling it a retail apocalypse.
[00:04:21] Speaker B: Exactly.
[00:04:23] Speaker A: What's everybody ever going to want to do with these big box places again? And now we've seen them be repurposed into my kids, go to some trampoline park that used to be a Kmart or whatever, you know, so.
Sorry to interrupt.
[00:04:35] Speaker B: No, no. Evolution. Right. So. And some of that is good. But now what we're talking about, at that point in time, you know, Target made a decision to leave both stores they had on the south side of Chicago. Strangely enough, at the same time, they were building two stores on the north side. Wasn't the best PR setup, I recall.
[00:04:56] Speaker A: Yeah.
[00:04:57] Speaker B: And everyone was exercised by this. You know, there was, you know, protests, yelling, screaming. There were people jumping on desks right across the street here at City Hall. There were a lot of people that were upset.
But the one thing I can say is that when a corporation has made a decision to close, I've never seen them walk that back, because they've already, you know, in my experience, coming from that side of it, you know, they've already workshopped this for a year, talked to all their PR folks made all the sort of what ifs analysis.
[00:05:34] Speaker A: This wasn't a whim.
[00:05:35] Speaker B: They didn't just, oh, next week we're going to close.
It's a thoughtful process and they're prepared for the backlash that may come.
But at this time, this was the first boycott, right? And so in thinking about it, this is where venture development and our commitment came really into play.
And some enlightened folks at City hall also said, hey, you know, once we got through all of that, you know, okay, you're going to leave now. Who are you going to sell it to?
[00:06:08] Speaker A: Yeah.
[00:06:10] Speaker B: And they said, well, we have our normal list of disposition candidates. We send this on our list and it goes out and oh, no, no, no, no, no, no, we can't do that.
[00:06:17] Speaker A: You already messed up. You know, look, we got people down, we got people outside of our building.
[00:06:22] Speaker B: We can't do that.
They said, what do you mean? He said, well, you know, you've got to have someone who's locally engaged and committed to the highest and best use and outcome for the site. We don't know anybody like that.
Luckily, someone stood up. An alderman in an area that I had grew up in said, I know somebody. And that's what started the conversation. And to Target's credit, they engaged with us and allowed us to purchase at a basis that allowed. That gave us the Runway to make the conversions really work.
[00:06:55] Speaker A: That had to be a proud call to get right.
Somebody thought of you in that instance.
[00:07:00] Speaker B: I imagine while I was here at the office, I was looking at City hall and I'm talking to them. It's cool.
[00:07:05] Speaker A: I mean, like, for that, you know, it's a relationship business and you're. We all have our brand and you have a corporate brand, you have a personal brand, you know, and it's cool that like in that instance, a community
[00:07:16] Speaker B: that you were thought highly enough of to be considered, you still have to get a deal done, right?
[00:07:21] Speaker A: Of course.
[00:07:21] Speaker B: It still gotta make sense.
[00:07:23] Speaker A: Yeah. But he also, I'm sure in his head knew he could get a deal done. You know, it wasn't just that you were a good guy, well intentioned, you had the wherewithal to get it done, the relationships to get it done.
[00:07:31] Speaker B: Yeah. And so, but, you know, no one saw what our outcome would actually be, you know, and it started.
[00:07:40] Speaker A: Did you immediately have the vision for it that you had?
[00:07:42] Speaker B: Well, you know, everyone thought the Chatham property was the easiest to convert back to a retail use.
No one had any clue what to do with Marshfield because It was a 450,000 square foot regional center that had been struggling, that was already in some distress.
And I gotta give a shout out to pgm, great partners that really worked with us through.
You just have no idea when you're doing a change in use of 130,000 square foot box on 10, 11 acres. You know, the other retailers usually have some say, you know, and they're like, wait a minute, you're going from retail to office?
We didn't sign up for that. Right. Even if you're gonna bring 500 employees there, you know, we didn't sign up for that. You know, and so.
[00:08:29] Speaker A: Because the outlets thought that they'd get the residual traffic from Target or whatever.
[00:08:33] Speaker B: Exactly. So you have to work through each one of those leases, you know, pd, TIF agreements, everything. It's a complex deal. And we worked through it. And we were able to deliver what has, you know, been one of the proudest moments. I mean, we cut the ribbon with Governor Pritzker, with the local stakeholders and aldermen. We all had masks on. We're standing six feet apart, and here we are opening this facility for 500, you know, new jobs.
And they're still there.
And that was Blue Cross Blue Shield that made that commitment there.
And it's been a terrific success story. And it helped actually stabilize that mall so PGM could actually exit a couple years later.
And so Discover coming back to there, is that the reason I tell you the Blue Cross Blue Shield story is that Discover saw that as a model. This is why it's so important. You need. In venture development, sometimes you need what we call venture tenants. You need tenants that are willing to go along with you on that venture to see the vision and see the value that you're presenting. Right. And committing for the long term.
And so they saw that and they're like, wow, that's pretty neat and pretty, you know, I mean, just the way we had to creatively solve the big box. When you walk into a former big box retail center and it's not active, it is a dark big box, okay, how do you have the vision to see, you know, people working and spending eight hours or more a day there,
[00:10:03] Speaker A: even just how to demise it, it's so vast that it's like it's hard to see anything else other than what it was.
[00:10:09] Speaker B: So I had previously, about almost 10 years before that one, I had worked in call centers. When I was at La Salle Pardons Jail, I put the largest call center in downtown Los Angeles, which brought more than a thousand jobs to downtown la. I got into the LA Business Journal and it was kind of a big deal back then. And so I knew how call centers operated and worked and what the metrics were. But the real game changer here was that I had earlier looked at taking another big box and converting it to housing. Seniors housing. I said, oh, it makes sense. Seniors. Why do you want them to go up and down elevators and stairs and things? Just create this single story environment. I mean, at 110,000 square feet of that particular building. But what we did was we cut out the middle of the building to create like a courtyard. A courtyard.
[00:11:05] Speaker A: Oh, right on.
[00:11:05] Speaker B: And the light and air could come into the units. Right. Oh, cool. And so that particular deal didn't go forward, but I took that learning and applied it to this office environment and said, let's create interior courtyards. And the great thing about that, they were like, wow, that's an interesting concept. Let's take it back and study it. And they came back and said, you know what? We like it, it'll work, but we need the whole building. I said, sold.
[00:11:30] Speaker A: Yeah.
That was the whole idea.
[00:11:35] Speaker B: That's awesome.
But Discover saw that and then they said, this gives us an idea of what we can do here. And at the time, Discover was the only major financial institution with all of their call centers based in the US and so it was part of their brand to say that we are also in neighborhoods employing people that use their card.
[00:11:55] Speaker A: That's cool.
[00:11:56] Speaker B: Yeah. So they had that relationship and that goal there. And so they took the 500 center model, that blue crossing, and said, we'll double it. We'll do a thousand jobs. And that became that success story. Now Capital One has made a commitment to continue it for the foreseeable future.
[00:12:15] Speaker A: That's awesome.
Should we talk about the juul.
[00:12:20] Speaker B: I mean, grocery stores, listen, that we
[00:12:21] Speaker A: talked about a little bit earlier, but I think. I think dive a little deeper in. Like, why has nobody developed a grocery store on the south side for five decades?
And how were you able? How or why were you able to get it done?
[00:12:36] Speaker B: Yeah. So again, whether it was working with Amazon and Whole Foods to make their first foray into the south side or Jewel Osco, the hardest part about building a grocery store is building a grocery store.
It sounds simple, but it really is. Yeah. Because, I mean, it's the capital investment
[00:12:59] Speaker A: up front, the sheer size of it. Right. You talk about land availability.
[00:13:04] Speaker B: Right, Right. And then it's also, you gotta understand how grocery stores operate. And so there has been an evolution in the Food supply market, right. Where we always think about the retail footprint, but behind that retail footprint is an entire operation. So grocers 30, 40 years ago began vertically integrating to their distribution centers and controlling the dc. Right? Then they started making what we call long term, almost like futures contracts on the land that produces the food, whether it's veggies or cattle or you know, proteins of different kinds. So you tie that up in long term contracts.
[00:13:48] Speaker A: So you control the variables for longer term than have a spike based on, you know, the supplier, the cost of the commodity at that point in time.
[00:13:56] Speaker B: Right. So they have now protected supply and that another competitor can't get access to. They have the logistics, distribution network to deliver it to the retail customer. Right. And what Amazon has done is put a whole umbrella around that of technology so they can truly know what's happening from farm to table. And it's not just like we think of farm to table as like you go somewhere to a farm and they have a restaurant attached to it. You get it in you directly. Great. I love it, love it.
[00:14:26] Speaker A: I hate on it. But I understand.
[00:14:28] Speaker B: But this is using the supply chain to deliver that experience and deliver that control, really, and insights into metrics and volume and usage and preferences and all those kind of things.
But even more importantly, if I can just get this to you, is that it's also multiple pockets of profit that can help subsidize the retail price point. And so what happens is if you're just a retailer at the retail, you don't have all these other pockets of profit.
[00:15:01] Speaker A: So you're just subject to that.
[00:15:03] Speaker B: You're not competing.
You think you're competing.
Now Chicago, there's only like three terminal markets, really large terminal markets in the country out west, Chicago and New York. That actually gives Chicago a unique advantage. You can't do this in Cleveland, you can't do this in Kansas City. But in Chicago, local, you know, food purveyors, bodegas, you know, they can go to the produce terminal and get access to some of the greatest, you know, produce in the world.
It's a unique advantage to Chicago. I can go into the history of why the Chicago dog has all the fixings on top of it.
[00:15:42] Speaker A: Whether we do it on the camera or not. You're telling me before I leave for sure.
[00:15:46] Speaker B: But it's because we had that produce terminal and it was the excess produce that became the Chicago dog. And so, you know.
[00:15:53] Speaker A: Oh, that's cool.
[00:15:54] Speaker B: Yeah, right. You know, and so that's cool. Yeah, it's cool. History is cool. I think. But anyway, you know, so you're competing differently, right, at the retail footprint than if you have this huge organization behind you now.
But you can be scrappy in Chicago and do some things. There's some operators that have been successful because they can access the produce terminal.
But grocery is uniquely challenged in terms of it's a high volume, low margin business.
So in order to make the capital investment decision, you have to be able to justify the density is there to give you the volume you need to really be profitable.
[00:16:38] Speaker A: Yeah. And the Woodlawn site.
[00:16:41] Speaker B: Yeah. No one saw it. I mean, they were trying for three years, you know, so our partner there was preservation, affordable housing. They had a choice neighborhood grant. They acquired the site. We bought the site from them. Our partner on that deal was Terrico. And so we bought the site from them and developed the Jewel and you know, also assisted Jewel with the new market tax credits. They got to help them with some of their inventory and fixtures and things. But it was really. No one saw it there. And actually, you know, was also surprising is that people at that point in time, 2018, had a different idea about Jewel. They saw Juul as kind of a dowdy, you know, tired sort of, you know, I mean, one of our largest corporations in the entire state, one of the oldest businesses in the state of Illinois, largest employer, one of the largest employers in the state of Illinois. But they didn't have this sort of upbrand market, you know, visibility or you know, what people sort of thought about them. Like a Mariano's, for example. Right. And so I said, no, no, but Jewel. And at the time I was on the board of the Chicago Food Depository with the president of Jewel. And so again, relationships and we, you know, I had to personally, you know, with Alex on our team, you know, put every, all the executives at Jewel, we drove around that neighborhood, we pointed out the green shoots that were happening. We just showed them venture development physically, in person.
And this is what it takes sometimes.
[00:18:17] Speaker A: Can't do that on Google Maps.
[00:18:18] Speaker B: You can't do that on Google Maps, you know, and this is what's happening here. This is the university is putting up a new trauma center. At the time, you know, all these things were happening, they weren't done yet.
[00:18:28] Speaker A: There also wasn't a trauma center in the south side until university.
[00:18:31] Speaker B: That's right.
[00:18:31] Speaker A: Which is shocking. But unless you went to Christ Hospital down in Oaklawn or something.
[00:18:36] Speaker B: Right.
[00:18:37] Speaker A: Or Stroge or down here.
[00:18:38] Speaker B: And now that's a rock star store.
[00:18:41] Speaker A: Yeah.
[00:18:41] Speaker B: You know, I mean, it does very Performs very well. You know, it's always crowded, does well. But you learn in other markets where, you know, even when you try to adjust the size, let's say to be more of a smaller footprint, that you need the density. And that's how we got in housing. So, you know, we're, we're thankful for Whole Foods, Amazon's continued financial commitment. They signed a 15 year lease. And that, you know, provides some financial cover and stability for Inglewood Square. But that's not what makes that the success that it is. One is that there are 10 other national retailers that joined that effort from Starbucks and Chipotle and Oak Street Healthcare and pnc and I mean, all these other. Would not have taken that leap of faith if Whole Foods had not taken a leap of faith. The other thing is, like I said, the hardest thing about being a grocery store is building a grocery store. You, you have a 50 year plus asset now.
And so when your tenants come and go, but getting the asset in the community so that it could not only be there for future tenants as that business evolves, but also it could be there as a catalyst for additional investment around the community.
[00:19:53] Speaker A: Yeah, that's awesome too. I'm just smiling hearing the story Linda was telling me. Another one that'd be good to talk about was the Spec industrial project in West Pullman. That seems like kind of a capstone to your.
[00:20:07] Speaker B: Yeah, yeah, yeah. So a lot of folks are, you know, saying, well, you know, DL3 is downtown now. Right. Well, first of all, downtown is at a point in its life cycle where our approach to venture development is needed to help drive what I see as a transformation from a work centered environment to a live, work, learn, play environment. Right. And so that takes, you know, I think, committed capital, but also a vision like we have beyond the building. You know, everyone else is focused on their four walls. Right. And I'm not saying that's wrong. I'm just saying to do this approach that we have, you gotta think about, yes, the four walls getting the deal done. But how does that building, you know, fit into the context? How does it help create an environment that, you know, delivers on that long term profitability we talked about?
[00:20:54] Speaker A: Yeah.
[00:20:54] Speaker B: And so, you know, we find that exciting work. It's just that, you know, we, we have a timeline that allows us to make investments that will produce not only an immediate yield in terms of impact, but also that long term financial bump that we're always looking for. We intervene on the curve at the inflection point. It's the steepest part of the curve. It's when people do not see the opportunity with DL3 and our team is, you know, highly trained and capable of doing, is identifying opportunities in markets and people and places that the capital markets or mainstream markets overlook.
[00:21:32] Speaker A: Warren Buffett had a quote about that too.
When others are fearful or something like that. I understand that maybe his was purely capitalist and not also pushing the social initiatives, not trying to cheapen that. But I think that that's a lesson elevating us.
[00:21:48] Speaker B: It's a great company.
[00:21:48] Speaker A: It's a lesson in business is having the courage and the skill set to go for it when not everybody can. Well, again. And so what do you see in the West Pullman project that, you know, historic success?
[00:22:01] Speaker B: I mean, this is a, you know, this site in West Pullman 130 years ago, had 2,000 employees on it.
Plano Manufacturing at the time. We've got the flyers and the documents. It was the most advanced manufacturing plant in the world.
[00:22:21] Speaker A: Oh, dang, dang.
[00:22:24] Speaker B: Okay. Plano Manufacturing joined with four other manufacturers to become International Harvester.
You know, International Harvester.
[00:22:33] Speaker A: I'm from Iowa. I know what International Harvester is, you
[00:22:36] Speaker B: know, what a reaper is.
A lot of people don't.
[00:22:39] Speaker A: I got kids, they know the whole. They know even more detail than me.
[00:22:42] Speaker B: Yeah, I mean, I had to, you know, learn what a reaper is and all these farm implements. But, you know, it really was a thriving job district that actually supported all the housing, the retail. These are all integrated stories. Right. And so we're not pioneering or doing something new. Just about everything we're doing is just referencing the historical success and tweaking it for our current environment.
But what can be successful once can be successful again.
And so that's west pullman, and it's 25 acres that we have assembled that was, you know, one thing. It wasn't as readily available as we thought it might be. It took some time, you know, so we've, you know, we continue to evolve and learn our own lessons and, you know, say we won't do that again.
But now that we have the 25 acres assembled, you know, this required looking at unplatted pens and city owned land and railroad easements. All kind of stuff you have to clear up in order to take, you know, the hair off of it, to make it the opportunity visible. But, you know, bringing 400,000 square feet of industrial and hundreds of jobs, you know, head of household jobs, back to a community that has been, you know, looking for that for literally 30, 40, 50 years now.
[00:24:01] Speaker A: And Pullman's got a great alderman for.
[00:24:04] Speaker B: Oh, yeah. I mean, well, so this is West Pullman. Both are great.
We really love working with Ronnie mosley of the 21st Ward. You know, a new dynamic alderman, was the youngest alderman in city council, I believe.
[00:24:18] Speaker A: Oh, dang good.
[00:24:19] Speaker B: Yeah. But he is, you know, really committed to this work and you need that partner to drive these kind of things home. Yeah, yeah.
[00:24:29] Speaker A: Let's bring it downtown.
[00:24:30] Speaker B: Yeah.
[00:24:31] Speaker A: So a couple large projects downtown. I don't know what you want to start with, but I met you at your event the other day at Ponchos, overlooking Okota, right next to Pritzker Park. $162 million mixed use development, 300 mixed income homes, 60 of which will be affordable on Plymouth, 300 block of South Plymouth in the heart of the Loop.
[00:24:56] Speaker B: Well, actually at the Southern gateway, you know, and so, you know, we could talk about some of our music. You know, love of music, share love of music. But you know, the, you know, a coda, the sign in music is the end of a movement as you return back.
[00:25:12] Speaker A: I learned that a couple weeks ago.
I learned that when you were speaking.
[00:25:17] Speaker B: Everything has an intentionality to it. But we really are trying that south end of downtown. Everything south of Madison, you really have two streets on State street now. Let's really go. You know, the northern end is really driven by the theater district and some, you know, Marshall, Macy's, Marshall. So that's got some staying power. But the south end of State street is 70% vacant. Right on the retail front. But you have university anchors there.
I mean, three or four universities. Some of them are struggling in this new environment, but they're still made durable long term investments.
You've got some of the best architecture down there. I mean, the skyscraper was born on Dearborn on those same blocks just to the west, two streets over.
And so you've got an environment that we see is very rich for what we're trying to do now. Both ACODA and our team that's working together with our team at 135 in a joint venture there to turn a very large project into almost 400 units.
And that's converting a historic office building.
[00:26:31] Speaker A: That's the Field building.
[00:26:32] Speaker B: That's the Field Building. But both of these we see as part of our portfolio strategy. You know, so one is not a conversion and isolation, the other one is not a ground up development.
I mean, by the way, building a tower in downtown Chicago, that is, I mean, it's the last vacant lot owned by the city in downtown. I mean, there aren't many vacant lots. This is a high barrier to entry market.
And so, you know, to be able to have the opportunity to do that is a developer's dream.
[00:27:01] Speaker A: Yeah.
[00:27:02] Speaker B: You know, and one that I've held since I was a kid. To be able to, you know, impact the skyline of Chicago. I mean, it's an amazing opportunity. But to also come to 135 South LaSalle, which, by the way, was the same site as the Home Insurance building, which is credited by most as being the first skyscraper in the world.
All right. That was actually torn down to build this building, you know, which is the Field Building, built by Marshall Field, the most prodigious business executive of his time. Right. He actually had an apartment on the top two floors. And I'd been up there and there's like a balcony you look out on over the city. And he really had a Leonardo DiCaprio moment. He was like, I'm on top of the world.
But he built that building was one of the most modern skyscrapers time because he wanted to show that industry could lead us out of the darkness of the Great Depression.
Capitalism and industry.
So the history is so rich, it's just amazing.
[00:28:04] Speaker A: Why did that project, I mean, a lot of people are talking about office to residential conversions. What was it about that project that worked where you decided to focus on in addition to the history, which is not to be glanced over, but what else about maybe just the physical structure of the building made that one work when others don't as well.
[00:28:24] Speaker B: So, you know, we spent a lot of time on the physical component, and we can cover that in short order. I mean, all of, you know, the buildings that are most readily convertible were built at a similar time. Right. And we're talking about that, you know, you know, the Art deco to about 1950. And so why?
Because the buildings have the articulated facades. Right. And so if you look at 135, it's actually four buildings up to, you know, the shoulders. And then the middle of the building is a tower that goes up. And so each of these function as, you know, with that articulation, allows you to get the window and the light and air. You need to create, you know, really attractive units.
[00:29:09] Speaker A: Units.
[00:29:10] Speaker B: I see what we started doing in the 60s and 70s with these big floor plates. It's very difficult because unless you're going to do what we did with Discover and you got to create the light wells, you got to do something else to create the opportunity. It's happening in New York. We're seeing where they're actually either mothballing space or creating light wells or doing additions to the building that make it more attractive for residential use. But here with this building, you have a great layout, a great physical layout that easily converts to residential at that base of the building.
But beyond just the physical attributes you have, also what's going on right now is a focus on housing and a focus on affordability. I mean here the Exchange is a 30% affordable covenant for 30 years in exchange for city support for the project.
[00:30:11] Speaker A: Is that part of La Salle Reimagined?
[00:30:14] Speaker B: The name has evolved over time.
[00:30:17] Speaker A: Part of that initiative.
[00:30:19] Speaker B: There's six buildings formerly in the LaSalle Street Reinvestment Program, but they're like 25 buildings that are actively being converted. And we work with Gensler, you know, one of the best architectural firms to really look at the entire downtown district. We've identified over 43, 45 buildings that would meet our requirements.
So again, there's a portfolio approach that we see here to really helping to bring residential here in a big way that will be a part of the
[00:30:55] Speaker A: future mix of the so more balanced live, work, play environment to talk about. But you can see that now because there's enough on the radar and there's enough in the pipeline to really feel that and feel the feel a little bit more of a community to downtown somewhere you'd want to settle into and grab a bite after work as opposed to just getting on the train and going home or going to the neighborhoods to get a drink or whatever.
[00:31:16] Speaker B: You know, the other thing I'll just say, you know, before I'll be remiss if I didn't say is that we have great creative parts partners that help us reimagine these spaces or imagine new spaces, you know, with a coda. Perkins and well, who we've worked with on both the affordable side and now the market rate side. I mean it's a gorgeous project that's conceived. The dexterity that that team has led by Todd Snap is amazing and true thought partners, you know, digging in and helping to bring that vision to life.
And then, you know, we're working with SCB over at 135, you know, a firm that has deep experience in doing this work from Tribune Tower and other places in the city.
[00:31:56] Speaker A: So I find architects to be one of the cooler jobs. I just find it to be like for me it's a little bit abstract. I don't think that way that they do, but the way that they can solve problems and then also solve for the aesthetic of it and the Ones that really care about delivering product. It's like I used to watch Seinfeld, and it's no surprise, like, George Costanza, like, posed as an architect when he was meeting women at the bar.
But it's just such the guys that do it at a high level and the gals that do it at such a high level are so talented at what they're doing. And, like, if you care about Chicago real estate, I find that it's hard not to admire their work.
[00:32:28] Speaker B: You know, one of the reasons we love working in the city is our, you know, strong architecture history. I mean, we're blessed to be walking around this every day.
[00:32:39] Speaker A: Yeah.
[00:32:39] Speaker B: Yeah.
[00:32:39] Speaker A: Well, city's better for having your work here, too. So, you know, we're very lucky to have what you're doing, what your team's doing. So you've been super gracious with your time, Leon. And a lot of people listening to the show are getting started in their career at this, you know, kind of in the earlier end of their career when they've got a lot of ambition. But what type of advice would you give to somebody that's looking to either get started in real estate or kind of propel their career to the next level?
[00:33:02] Speaker B: That's a great question. I mean, this is, you know, you're leaning right into where, you know, I am in terms of my, you know, teacher background and family background.
But I was asked a similar question some years ago, and it gave me this philosophy I've been sharing widely.
I was on a panel, and they were asking, what advice do you have for a new talent? And I was grateful that I was the last person on the panel, because as they were going down the line, people were sharing what they thought, and it wasn't anything great, really. Nobody, like, steals the picture, whatever, but it wasn't great. Nobody was saying anything, really.
And then all of a sudden, boom, like that. I got a DM from up above, and it was like, okay, the five T's, right? And so.
And it just came organically to me. But I've been workshopping and talking and, you know, sharing it more widely. But time or talent?
Time. Team treasure and truth.
So talent, time and timing.
Team treasure and truth.
And so I could talk a little bit about each one of those.
[00:34:14] Speaker A: Talking about it.
[00:34:15] Speaker B: Yeah, yeah. So the talent, I mean, you've gotta, you know, you've gotta put your time in to this work. You know, we used to talk about 10,000 hours, but you've gotta really have the skillset to model and present and, you know, Communicate your ideas, tell stories. I mean, you know, a lot of these are story deals, but you've really got to, you know, put your time in, you know, to have that, you know, talent really be expressed.
So you can have some raw talent, but you've got to put the time in to really develop that talent in this field. So your financial modeling, your grasp of construction, architecture, you know, neighborhoods, history, you know, all these different things, it takes time to get that. And if you do it, you will have be a talent that everyone recognizes.
[00:35:09] Speaker A: Yeah, if I can interject, I think also when you can, when you can sell your talent, you know, and promote yourself and what your talent is and to be able to not sell in a salesy way, but to be able to communicate your value to somebody else's situation, I think that's when you really, that's when you really start like getting it to the next level. When you think about, here's what I know I can do well, here's what it means for you. That's when you're real. That's the secret sauce in that talent too.
[00:35:35] Speaker B: That's a great way to add to it. I'm gonna use that.
[00:35:38] Speaker A: Well, when you're at Harvard, Joe Smaslo
[00:35:41] Speaker B: had this idea and then, you know, just going in, timing.
A lot of people talk about real estate.
You know, when I was coming along, my dad said, you know, location, location, location, right? You know, that was the three rules of real estate. Right. We've all heard that. And I've actually replaced that with timing, timing, timing.
Because the best location at the wrong time in the macro cycle, the capital cycle, the economic cycle, could not work right. And we all know those kind of deals. And it's a great location. You just can't make it work.
And so timing matters as much or more than location.
Treasure.
Being a developer requires what we used to say we call walking around money.
But in order to advance projects through pre development, you've got to be able to get your ideas down on paper and then to be articulated to the
[00:36:47] Speaker A: various stakeholders in it.
[00:36:48] Speaker B: Right, right. But it's gotta be zoning, entitlement, be able to communicate. So you need pictures, you need to see what can actually be done, refine your idea. So you know, when you think about the team that you need, which is another critical factor, it's not just your internal team, which is really important. A lot of people focus on their internal team. But I really think about team more broadly because, you know, you want to develop an ecosystem of lawyers, accountants, consultants, others who go with you from project to project, and they get to understand and know how you work.
So, you know, so it's really important to have the treasure to advance an idea that you have. You have to have the timing be right. You have to have already spent your time developing your talent in the area so that you can execute, you know, efficiently and effectively.
[00:37:50] Speaker A: Your truth.
[00:37:50] Speaker B: But the final one, which I always leave them with, is your truth, right?
[00:37:54] Speaker A: Yeah.
[00:37:55] Speaker B: And what I say to particularly, you know, emerging talent that want to get into particularly, they want to do, like, impact, you know, work. You have to be motivated by more than money.
[00:38:08] Speaker A: Yeah.
[00:38:12] Speaker B: And so tell me why you want to do this, and don't tell me you want to make a lot of money.
I'm okay with you wanting to make a lot of money. That's important.
But that can't be your truth.
Because when it gets difficult, when it gets tough, when you're in a moment where it's not clear whether you're going to be successful or not, if you're only motivated by money, it won't be enough to get you through.
[00:38:37] Speaker A: I think that's the best answer I've heard on that question. So.
Nice one.
We're gonna wrap with an easy. I think it's gonna be an easy question for you.
It's very clear. You love Chicago, and, you know, you grew up on the south side of the city. It's really, you know, backyard for your business and home for your business. You've effected a tremendous amount of change there in a few of the, you know, basic needs of food and medical services and housing. These are all things that you're addressing in your. Your core marketplace on the south side of the city.
Why do you love Chicago as a place to live, as a place to run your business, as a place to develop, invest?
[00:39:19] Speaker B: Well, you know, that's a great question, too.
And I've traveled and lived in other cities. You know, I've lived in New York, I've lived in Los Angeles, traveled around the world. I've been to the Middle east, to China, all through Europe.
And every time I come back to Chicago, I'm just impressed with what we have here. You know, what a great city by the lake that Jean Pont DuSable saw as a trading outpost. Potential. It's still here. I mean, our diversified economy, the cultural institutions, the great educational institutions, we have, you know, third biggest Broadway. You know, we just have so much going for us, not dependent on one industry, you know, which gives us some, you know, sustainability and resilience.
And, you know, it's just beautiful. I mean, this is a city, you know, I think, you know, there's a blessing that came from a fire that allowed us to really plan a city, you know, in a way that would be most optimal to live in, whereas other cities are just taking walking paths and making them streets. You know, it was really a thoughtful approach to, you know, what makes a great city, you know, and, you know, they have the likes of the Frederick Law, Ol Olmsted and others, the Sullivans, the Mies van der Rohes, who have come and plied their trade here. I mean, it's the best thought from around the world coming here to create an environment that we just enjoy every day.
I've raised my family here, you know, two kids that I've brought and raised here. I was raised here and so I got deep roots all my dad's side, my mom's side. They come from a long line of public school teachers who were ingrained into the public school system and teaching others how to, you know, improve their lives and succeed in school. And so it's a lot of personal ties and a lot of professional admiration for what, you know, Chicago has become the great city that it is, the economic powerhouse that Chicago is. I mean, we really do power the state of Illinois, you know, and not only that, the Midwest being a magnet for all of the, you know, great big ten schools. Everybody wants to come to Chicago. You know, we're standing right here looking out at Google. I mean, this is like the number one or two location for requests for working from Google employees because Chicago is a great city to be in, great sports, you know, obviously. So we've got a lot of culture, a lot of architecture, finance. We've created, you know, some great fortunes here. Yeah, I was talking earlier about Marshall Field. I mean, just think about the innovation that comes out of here. I always used to say it's something in the water. I mean, we've got a president from here, we got all kind.
[00:42:18] Speaker A: It's hard to distill it down to one thing. Right.
But in combination with each other, these things make for a beautiful city.
[00:42:26] Speaker B: It really does.
[00:42:28] Speaker A: You've positively affected thousands of people's lives in your hometown. That's an incredible. It's an incredible feat. And it's like cities, just better for you being here and for your work.
[00:42:40] Speaker B: So I appreciate you, Joe. This has been a really great conversation.
[00:42:48] Speaker A: Yeah.
[00:42:48] Speaker B: You know, I'll leave you with one final thought that I have, though, in terms of this great city. We obviously have some challenges right now
[00:42:55] Speaker A: too,
[00:42:57] Speaker B: and you know, for me, you know, I have always believed, you know, having grown up, as you said on south side, we used to always come down to State Street. I used to go to Marshall Fields, the Walnut Room. I used to love the pot pie.
I still love the pot pie, actually.
But having a lively downtown and thriving neighborhoods are not incompatible.
Matter of fact, I think the opposite. Right. I think they're actually necessary to do. What I think is the most important thing that we should all, as Chicagoans, and, you know, our political leaders should be focused on, and this is a lens that they should really look at things, is how do we get our population back over 3 million? Most people don't know that population peak in the 50s was 3.6, 3.7 million. We're sitting a million, you know, folks less than that right now.
So in order to deal with our long term structural, financial challenges, it's the same thing in the neighborhoods. You got to bring density in people. We need to bring working families back into our neighborhoods. And what that means is, is that they have the big three satisfied. You know, they want to know where are they going to shop and eat, you know, where their kids are going to go to school, and how safe are their streets. If we can answer those questions in the neighborhoods in a meaningful way, we can open up the opportunity for building wealth and building families in neighborhoods again. The other great thing is the transportation system. We are so connected here in Chicago. So our downtown continues to really be the heart of our city, neighborhoods being our soul.
What life is worth living without the soul? Right?
So you gotta have both. You gotta have both. And so, but we can connect to these neighborhoods in a way that's unique in the country, really.
And people can find opportunities downtown.
So we see this as a complimentary way of moving our city forward, is focusing on the neighborhoods in terms of making them attractive for working families again, but also making our downtown really attractive for young professionals, people that are seeking new opportunities, providing what we're doing here in downtown Chicago, no one else is doing across the country.
With our focus on affordability downtown and creating an equitable environment downtown, they're not doing that even when they're doing conversions in other cities, they aren't focused on 20 or 30% affordable. Yeah, I mean, that's really unique to Chicago. And having this coordinated approach to accomplishing that is unique to our city.
So we lead, you know, and people are always asking, whenever we travel, they'll say, what are you guys doing in Chicago? You know, and it's something about the the size is not overwhelmingly big, but it's big enough that you can make it here before you go national. But we also have enough diversity among our people, cultures, ethnicities, political views, whatever have you, that it's a cauldron that we can mix and create some really outstanding solutions to some challenges that I think we're all grappling with right now.
[00:46:06] Speaker A: Incredible way to end it. I hope the people listening, like me, feel some inspiration in your work and what you're saying. And thanks for. Thanks for leading by example. You know, it's one thing to lead, it's another thing to teach while you're leading. So you're doing a great job for the city. I appreciate you, man.
[00:46:22] Speaker B: Honored. Thank you.
[00:46:23] Speaker A: Thank you.
