← The Kirsh Connection
The Kirsh Connection
Celebrating 100 Episodes with David Schwartzman, Founder of Harridge Development
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- [00:01]
A
Hi, I'm Andrew Kirsch, co founder of Sklar Kirsch. On this podcast, I interview industry leaders. You'll hear their real time opinions on today's market, their background, unique career highlights, and guidance for newcomers to the industry. This is the Kirsch Connection. Welcome to another edition of the Kirsch Connection. Not just any episode, but our 100th episode from Real Talk to the Cursed Connection. And to commemorate the hundredth episode, I have David Schwartzman. He was my guest for episode number one. And to go full circle, I thought it would be apropos to have him be my guest for episode 100. Episode one aired in November of 2022, three and a half years ago. We talk about the changes in the market, the changes in the real estate industry over these past three and a half years. Now, before we get to my episode with David, I want to thank all my listeners, all my supporters for making this podcast such a great endeavor. I truly love putting out these podcasts and I am so grateful for all my listeners, all my viewers, and all the supporters for initially Real Talk and now the Curse Connection. So thank you, and without further ado, here's episode 100 with David Schwarzman. Welcome to a special edition of the curse connection, episode 100. And to commemorate this distinction, I guess this, this celebration, David Schwartzman, the founder of Heritage Development, comes back onto the show. David, you were my first podcast on November 9, 2022.
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B
I remember that.
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A
I hope you do. I told it was three and a
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B
half years ago in my office. You've moved up in the world. You have your own studio now.
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A
I would say of the hundred episodes, Well, I guess the 99 episodes prior to this one, the one episode that I get the most feedback still three and a half years later, is someone other than David. No, I'm just kidding. Is the David Schwartzman episode.
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B
Well, I don't know if that's good or bad. Maybe you got a question. Who's watching your podcast?
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A
Probably just a couple people. So I wanted to see what life was like on November 9, 2022. The presidential election had just occurred. So Donald trump just. No.
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B
22. No.
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A
Oh, that was.
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B
You're right.
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A
24. You're right, you're right, you're right.
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B
Midterms.
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A
Sarah, I've got my notes there.
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B
You got your. You gotta get your facts straight. Yeah.
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A
So Biden was president.
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B
Yes.
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A
Garcetti was still.
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B
He was out.
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A
Mayor Karen Bass had just gotten elected. Guess what the Dow Jones was at in November of 2022?
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B
Thirty thousand.
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A
Yeah. Thirty two thousand. Five. Thirteen. Today it's 51,000, 51,000.
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B
The NASDAQ was probably 14, 15,000, 10,000.
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A
Oh my God, now it's 27,000. The 10 year treasury was low. Not that low. Four hundred and twelve.
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B
That's interesting because the prime rate hadn't really moved yet, in fact, because I remember we were closing a deal and the day we were closing, Russia invaded Ukraine and I was like, oh, shit. We were in IC on the deal and I was like, if this thing gets approved, it's amazing. But everyone thought Russia was going to run over Ukraine in two days. And four years later, we're still here.
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A
We actually recorded a podcast on the eve of COVID that never got published. Do you remember coming into my office? We recorded on my laptop and it was.
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B
Oh yeah, it was just in Century City across that. Never recorded.
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A
Well, we recorded it, but we never.
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B
We can release that one as well. See how accurate we are.
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A
Yeah, so it's technically the third podcast and in that first podcast we should hear.
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B
That was before you even did the podcast, correct? Yeah, that was like. Oh, that was like. Yeah, that was like 20. That was like the start of COVID
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A
It was March of 2020.
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B
Nobody was there.
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A
And you said, this is going to
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B
be just a little blip. It is nothing missed on that one.
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A
Nothing compared to the gfc. We're going to be back in the office like in days.
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B
Well, I still think the financial impact is nothing like the gfc. I would actually stand on that point. I think the difference between the GFC and this is Covid changed how people live and change the world and changed certain industries. But I don't think the financial distress that happened in GFC has happened in this cycle. I mean, I think we're actually having, we're, we're still kicking the can on a lot of distress is what I see. So I think there's still more to come.
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A
Look, we talked about your background extensively.
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B
Yes.
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A
And you're very public with the highs and lows and we'll get into some of that. But this podcast is not to recap the David Schwarzman history here.
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B
Let's just go on moving forward.
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A
But we're comparing today versus the gfc, let's say. And during those days, a week could not go by with a client of mine saying, hey, Andrew, I've got an opportunity to buy a portfolio of loans at an incredible discount. Just make sure there's no nuclear missiles in the purchase agreement.
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B
This is during the gfc.
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A
During the gfc. And it's just like banks just getting rid of their inventory. We're not really seeing that at all.
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B
No, banks are not as distressed when they try to get rid of their inventory. They get the bids they don't like, they sort of pull it off. So their earnings are so good they can cover up and not take the loan losses yet. They. That being said though, you are starting to see cracks in certain sectors. An example obviously to talk about is look at Radford Studios, CBS Radford. I mean that's $2 billion to 400 million. And by the way, I'm not sure that's a done deal yet. By the way, I'm not sure that's as done as what the street is reporting on that. And I could see that actually potentially being reset again. So I'm not sure that's actually a done deal. But I think you are seeing some distress. But not like 2008 because there's liquidity, there's lenders still lending, there's equity still investing. Although equity has gotten squeamish I would say. I would say still out there, but it's gotten harder.
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A
I would say in the last 45 days equity has gotten squeamish and pulled back. I think because we all thought this war in Iran would be over within a few weeks and now we're several months in.
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B
And I think the problem with that is we just need, we needed to go in there and fucking do it the first time, right? And we've sort of done it half assed and we got, we sometimes need to remind people who we are. And I think we probably should hit him harder instead of like titter tat and like, I mean I don't think we're really getting inflicted real losses. I just think they're disrupting the Strait of Hormuz. But I think listen, we can sink their ships, we can do this. I think and I'm not saying putting boots on the ground, but I think maybe a little more shock and awe bombing like similar to like the U.S. iraq when Bush went in, Bush Jr. I mean I think that potentially could be something to bring these guys to the table faster. You don't know who's leading there. I do think it's going to resolve in the next four to six weeks. I'm not sure. We might not see a little more military action there. Believe it or not, I could see a skirmish or two more. They're happening but I think before the midterms it'll be resolved like two months
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A
before have is There a direct correlation or indirect correlation as to what's going on geopolitically to the real estate market?
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B
Horrible. Yes, there's, there's direct correlation. People are afraid on forward planning. I have three or four different business lines, but my main business line is I'm a land developer. I sell finished lots to public homebuilders and private homebuilders. And the homebuilders have not bought land for a few years now. So their inventories are notoriously low. They should be buying right now rapidly. And there's one or two that I think are very well capitalized and very strong that are doing it. But I'd say the more the mid tier guys are scared of the world, they maybe their Wall street stock isn't doing as well as some of the other builders. Although there's been a huge consolidation in, in the industry in the last nine months continuing to happen. Berkshire Hathaway bought a company two days ago for eight, eight and a half billion dollars enterprise value. So guys are putting things on hold. They're kicking the can. But eventually they're going to have to buy and I think that will then cause the next what I call land rush into the market because these guys are going to have nothing left to sell. And to meet Wall street earning some protections, they, they have to be selling houses. So they're going to have to buy and they're all going to have to buy at the same time. It's going to force land values up.
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A
If we did this podcast at the beginning of the year, wouldn't you have assumed that interest rates would have gone down by now?
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B
Yeah, I think they would have actually gone down. I think the wars kept them inflatedly high. I think that's why I think if the war resolves, I think there's about a 30 to 50 bip drop in the 10 year. So the 10 year right now is like 445. I think it should be between 415 and 4 and 415 somewhere in that range. That's where I think it naturally needs to be right now. And now you have a new Fed chair, Kevin Warsh coming in. He is going to lower rates. He is looking at ways.
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A
Do you think he can lower rates
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B
and given what's going on, popularity contest between you and me, I think, listen, I think if the war was resolved, I think you could. I think the problem is the war. It's the perception of the war. I think if oil suddenly came down another 15, 20% which I think it would with the alleviation of the war, I think, I think then you'd have a clear path to start doing that. People are hurting. I mean there's two economies in the world. There's the AI tech lala economy and then there's the real world. And I think what I am most scared of is the effects of AI because I don't know, I always think of the movie Terminator and I wonder
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A
if the original Terminator.
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B
The original Terminator and like is that where we're coming between the AI and then the robots coming on? So I mean I am concerned. I really worry about my kids and like what are they going to do? And yes, there's going to certain industries reinvent but to me it's, it's scary. I mean there's some real scary things out there that I've never really imagined before about AI.
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A
Well, real estate, construction, everyone needs a place to live.
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B
Yes.
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A
And do you think, I mean you, you work so much in home building, land development and multifamily as well. Can people afford to buy a house today based on where pricing and yields on interest rates are?
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B
Yeah. I'll tell you why they can. Because what's going on is like in Los Angeles county, if you want to buy a new house, you can get an FHA loan. So an FHA loan, I think the lending limit, the Last I checks 1,000,187, it'll go up again in June. It usually goes up 3% a year. It's going to go to like a million 2 25. So, so with 3% down, that's your loan amount, a million B, let's say million two. So you can buy a million two 50 house. You put $35,000 down. Okay, you go out and buy the house. Then the builder, if it's a new home builder, they do what's called a mortgage buy down. So they buy down your rate. They can artificially for 6% of the sale price of the house, they can buy down your rate about 75 bips. So if we could get into a five handle on the 30 year, which I think at a 4% rate, we get into the fives again, then basically you're at a low five and a quarter rate. And now on a million two, your IO is about 60,000 bucks a year. You're buying a 2,000 square foot house, detached house, that's on a rental basis, 230, 240 a foot. You can't rent for that. So I think buying makes sense. I think buying is the only thing that actually makes sense. Right now, more than anything in certain markets, all markets and well, here's the problem. If you're in certain markets that are, let's say, very affordable. The problem with the multi, unless you're building garden apartments is podium construction is just so expensive. It's just really hard to make that pencil. So you need very high rents to support that construction. Even if the land is free. If you're building a podium and it's costing you 300 bucks, 340 bucks a net rentable foot. I mean just the money with the impact fees and the soft costs, forget any value to the land. Your rents have to be like a $3.50 $3.75 rent on a per square foot for a number of apartment that's with no value land. A lot of markets don't have that rent to start.
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A
Well, I feel like there's just no equity for ground up construction on, on, on multifamily.
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B
I don't think there is. And I think what's going to change that is you're going to have a point where nobody's building, nobody's building, nobody's building and, and you're going to have new product coming out and it's not just affordable because like yeah, Ed1 is great, but not everybody's going to live in Ed1. I mean there's a lot of people, the majority of people aren't ED1 and they need to live in other kinds of housing in la and there's no market rate housing left, so people want to live in newer product. It's going to push up the value of that product. In case my very contrarian here.
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A
Yeah, in case my audience doesn't know what Ed1 is. You want to explain?
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B
Yeah, it's the Mayor Bass did an initiative to open up zoning to build more affordable housing in Los Angeles. So the entitlements have gotten much easier. I mean there have been a lot of state laws have made a lot of things easier. It's getting money to understand it. And even if it's gotten easier, you still have to know people how to implement it. I see several people. I mean I've always done my own entitlements. I've been doing it for too long, 33 years by my own entitlements. And I see a lot of people say, oh, I can do that, I'll hire the lawyer and I'll do this. And they know all the laws, but they don't know maybe how to design the product. They, they don't know how to. Then Actually like if they're doing a for sale deal, the home builder, a lot of time wants you to actually put in the infrastructure. There's a lot of quasi developers out there that buy stuff, entitle it, but they have no idea what they're doing. They don't know how to actually put in the infrastructure. They don't know how to design the site properly to make it work. I get called by people all the time that have sites they've entitled and are asking me questions them and maybe it's their son is in the business and they have their opinions and like guys, you got an entitlement but functionally that design doesn't work for the end user, the builder.
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A
What is the state of entitlements of the ability to get projects approved both in Los Angeles and other surrounding communities?
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B
Well, I think it's gotten much easier. There's been a lot of state legislation in the last year. There's AB130, which if you're under 20 acres and you're zoned and you have no kind of environmental impacts or historic resources and you have proper zoning, you can get exemptions on ceqa. So I think that's incredible. That gets you out of a lot of the public hearing process. You still have a public hearing to do your track map, but it's gotten to be a much more condensed, easier process to get done. So I think that has helped things. There's AB 2011, there's, there's like seven or eight different laws that I talk about for for sale. There's also stuff that does for multifamily. I mean a lot of people go and use these, these laws where they get exempted from ceqa, but they have to build a prevailing wage, which means have to build with union quasi. And it sounds great, but that financially doesn't work because that ups your cost 20 to 25%. And when you're building, especially a multifamily deal, it's tight to start with no land value. Adding 20, 25% to your costs through that law is worse. If you're doing for sale and the union contractors are not cost effective on the for sale product. So it's, we have a problem, we're creating all these laws, but we haven't figured how to create the housing. We have all these laws that are great, that work to make.
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A
So where's the impediment? Is it the capital markets? Is it demand? Is it? What is it?
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B
Well, the problem is I think Sacramento has problems. They pass laws and they want to do housing. And listen, Gavin Newsom, that can say what you want, he has tried to help the housing industry. But, but the problem is when you're too tied to labor, it's, you're helping it but you're hurting it because you're putting strings on the housing that's attached to the labor and it just, it's hard to make sense. Why does an affordable housing unit in Los Angeles cost $900,000 a unit to build with no value to the land? I could build that with non prevailing wage for hard costs for 45% of that number. 40%.
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A
So what I don't see, everybody seems to talk about this issue.
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B
It's a system. Everybody's feeding off everybody, everybody's marking off all the affordable developers. They've got their 15% fee structures in and then this contractor's jacking the fees up. And then they have these union agreements where the unions sit and they go, the little oh okay. The union sits there and they say okay, you five guys bid this job. They tell them we're bidding and the five guys get together and they bid rig. I mean it's, it's really, it doesn't cost as much as these guys say. And yes the materials have gone up, but not like some of the cost have.
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A
Have you seen a pullback in cost of materials since?
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B
I was starting to see a real pullback till the Iran, yeah. Oh, the war started. I mean we were starting to see real pullback. I think we're actually costs have not gone up in the last 12 months. We were actually looking to be down about 10% and because the petroleum and a lot of the construction materials are, are based on the prices of petroleum like drywall, glass, concrete, all key off the petroleum markets and the cost. So that has inflated those costs where they were naturally dropping, they sort of held.
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A
And so when you talk to union leaders, I mean what, what they are just narrowly with blinders on looking at. All they care about is their benefit packages. That's it.
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B
That's it.
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A
Even though in the long run their constituents are worse off because the state of housing in LA County.
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B
No, they're, no, no, they're not worse off. And they're to their defense, their constituents are the guys that are paying their dues. They need to get jobs. So they're not getting as much jobs because there's not high rise construction going right now. Type 3 multi. Like I'll give you an example. Like what's the law the bus transit that everybody uses. You know what I'm talking about that came in with jjj. It was. So the unions don't like that because now you can get all these bonus densities being next transit under city law. Whereas the unions used to say, oh, I want to go from a one and a half far to a three far. The union could show up my hearing strong army, threaten to sue me, make me make a deal with them. Now I can get around them through certain development incentives. They don't like that. So in some ways they've lost power by some of the laws.
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A
Why don't they like it?
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B
Because they can't stop your project now. Your projects now as of right. And they don't like that. They used to listen generally listen. They always say, oh, our workmanship is better, we're so much faster. Listen, dude, there you can find very good subs that are non union. Okay? And I'm not saying and you can find union subs that do good work. But if you bid them properly, if it goes through where the unions running the bid and doing this, I don't think you get a fair bid. I have used union contractors, I've used union framers, I've used union concrete. I've done. I do most of my infrastructure work on my subdivisions with prevailing wage because I issue bonds against my work. So I can actually in a perfect world, a prevailing wage guy to a non prevailing wage guy is probably a 10 to 12% difference. Which it's a difference, but it's not the end the world. But when it's how the bids are administered and how everything's done, it becomes a 40% difference. And that's where it suddenly goes, okay, now I can't build the project which is now causing your problem.
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A
But they don't believe that.
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B
The unions, they know it though. But it's what they're selling the public again because when they go to the politicians, they're very influential and they tell the politicians certain things. The politicians are oh, it doesn't cost that much. And I go, yeah, it does. And if I could administer the bid process it would be much cheaper. Or the developer versus where they try to run the bid process.
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A
All right, so we're recording on June 2nd.
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B
Yes.
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A
Election Day.
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B
Yes.
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A
We'll probably release this podcast next week of probably June, you know, probably on June 9th.
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B
Maybe we'll have the results by then. Maybe.
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A
Right. We don't know in LA county.
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B
We won't be certified in a week.
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A
There's no way we won't know tonight who. Who the final two, the runoffs are no for mayor.
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B
For. There's a lot of. There's a lot of elections besides the mayor.
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A
By the way, you see the ballot, the number of people running for governor. I'm surprised you're not running, David. There were 41 people running for governor. It was like a novel to open that ballot up.
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B
It's crazy.
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A
All right, you live in the city of Beverly Hills. You can't vote for mayor.
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B
I cannot vote.
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A
Nor can you vote for city council.
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B
I cannot vote for city council.
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A
Are you willing to offer a prediction or what is the commentary you want to.
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B
Yeah, several things. I think the mayor's race is going to be a runoff. There's no one's going to win it outright. I think it's going to be Mayor Bass against Spencer Pratt.
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A
I agree.
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B
And I think Spencer has more momentum than people think. I think if anything, he's probably being under registered in the polls. And I think Mayor Bass has. I mean, I think Spencer Pratt said it in the debate when Nithy accused him of wanting to run against Bass and not her. And he's like, looked at her, goes, are you crazy? She's got the union. She's the incumbent. She's the machine. Like, you are just the failed council person. And I think that those were his words. And yeah, I think. Listen, I think it'll be Bass against Pratt.
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A
There's been a lot of talk among my friends, clients over the last few weeks as to, can you vote for Spencer Pratt? And my response is, how can you vote for the alternative?
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B
Listen, I think you have to step back for a second. I don't think the mayor has the influence that everyone seems to think. I think the more important thing to look at is our city council. Our city council has, is the real influence. The city council runs the city. The mayor can veto the council. So if there's an 8. 7 vote, the mayor can veto it. And I think it takes 12 out of 15 to override a mayor's veto. So the mayor's important, but the city council is more important. And we are at a, I think, a precipice right now of where we're at. I mean, we have seen, you know, in good times, people like sort of say, oh, well, there's not equality. There's not this. And movements like the Democratic Socialists of America come to fruition. And I truly believe that movement socialism is the undoing of the United States. I think it is a disaster. I am a capitalist. I also believe in free speech. I am socially quite liberal, believe it or not. But I am fiscally conservative and security, safety. I take a conservative tactic. I think our state, our city, we have embraced policies like what was the policy where if you stole something was a thousand bucks or less. You didn't get arrested. You steal, you steal. I'm sorry, that's.
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A
Well, you saw what happened to San Francisco and how it's been turned around by leadership.
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B
Absolutely. And by the way, he politically, Mayor Lurie is a very liberal leader, but he said enough is enough and we've got to stop. And you had a council there and a DA there. That was a DSA back d a Democratic Social America. They got rid of the da. We got rid of our horrible DA and Gascon. My God. I mean, like, I think the worst person did more damage to LA County Covid than Gascon. I think that was the. But I mean people want to attack Bass and listen, I'm not getting into the mayor's race as much. You got to look at the council because you have DSA backed council people running for office right now that want to. They do not want to have the Olympics here. They want to defund the police. They want to decriminalize everything. They have issues with the owning of private property. They actually want to take over private property and make it basically everything, a big commune. They want to make us a welfare society. My wife is a Venezuelan immigrant. Thirty years ago, Venezuela was the richest country in South America. I don't. People know that it's a disaster today. They have more natural resources. They have. There was a gorgeous. Caracas was like the Paris of South America and it has become a sewer. Okay. All the Venezuelans now live. They flee. They live in Miami. They've come to this country because socialism does not work.
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A
So do you think we've hit rock bottom? That there is going to be a transformation like we've seen in San Francisco? Do we think there's going to be a change and these city council members?
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B
I think the city council is changing. I do. I think you have several council people that are turned out that maybe they weren't dsa, but they didn't stand up to them either. And I think you're going to elect people. I think you're going to see in the San Fernando Valley. I'm hoping that there's one candidate I think is going to win and I think he is going to stand up very pro business. I think he's going to win. I think you have another councilman in CD9 that's going to go to a runoff. But I think the guy that's going to win there is more of a pro business and realizes we can't penalize business. We don't want to beat on this. I actually think deep down Mayor Bass is starting to realize that. I think. Listen, I don't think Mayor Bass is perfect, but I think she's dealt a lot of bad cards. She had a mayor before Garcetti who was horrible. I mean, not that she's been a lot better. I'm noticing council members that are. I'm not. They're progressive. They're not socialists, but they're progressive. Realize something has to freaking change. They're starting to come to realization. I had a meeting last week. I was sitting with an office and they were telling me, I go, guys, what do you think's happening here? You're not investable as a city right now because the leadership and we're still wanting to put money in the city. But you guys got to change. You got to stop with like, oh, what are we getting? What's the benefit back? Guys, stop it. The benefit is we're going to build in the city and we're going to create jobs and we're going to give people housing. And instead of prices exacerbating up, maybe we can, by creating supply, you can bring some normalcy and stability to the market.
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A
But can you. I mean, we keep hearing. And I see it when my. My clients are looking to do projects in LA and. And you know, Wall street has essentially put a red line through la.
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B
Yeah.
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A
They will not provide capital for projects either existing or they won't do.
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B
They want. Multi is very tough. I mean, multi is.
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A
But they'll do for sale.
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B
They'll do for sale? Yeah, for sale. There's, there's. Listen, I'm financing a multi, though, right now. It's massive. I don't want to get into too much, but I'm getting it done.
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A
But, but that project had been entitled.
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B
Oh, yeah, yeah, it was entitled. And there's a whole story there. But we're getting it done. But it has been the hardest and I've done some few projects in my life, like, and I look at my career, I've had like four or five, like, what I call unreal challenges. Like, wow, like, oh, my God. Where this was against me, this was. And this has been probably the last one. But I think it's getting done. But it's tough. It's gotten harder. It's not gotten easier.
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A
Well, have you thought about not doing business in LA or its surrounding cities?
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B
No, I'M still, I want, I'm looking to do For Sale. I, I'm more bullish on For Sale than I ever have been.
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A
So a lot of my clients, you know, during, you know, the 2021, 22 time frame, they were all in on the Sunbelt.
- [28:41]
B
Yeah.
- [28:43]
A
Phoenix, Vegas, they're gonna get destroyed getting.
- [28:46]
B
They have gotten there and I think there's still more.
- [28:48]
A
San Antonio, Nashville.
- [28:50]
B
They're chasing, chasing yield. They're chasing yield. They're chasing the value add story. Listen, I think value add. I've never been a guy that really believes in that per se. I think you have to.
- [29:03]
A
I thought those are the real developers. Those that change out toilets.
- [29:07]
B
No, that's toilets and sinks. No. I was involved in something in a meeting once. I said I'm a developer and as a developer. Developer. And I said to the guy, you pull out cabinets and switch out toilets and projects you don't ground up build.
- [29:20]
A
But the question is that I like to ask folks what keeps you up more at night? The oversupply of the Sun Belt or the political instability of the coastal markets?
- [29:34]
B
Political instability. I'm not in the Sunbelt.
- [29:36]
A
I know, I know you aren't and you've chosen not to. And you have hunkered down and I'm
- [29:42]
B
in your base area. I'm in the Bay Area in a big way now. I mean, we've got three projects up there. We doing a deal with your representative system. We're buying. We got three projects up there. We've got. With the. We got like 1700, 1800 for sale lots in the Bay Area. So I mean, so we, we were, we're in the Bay Area. We're very hunkered into Ventura county and we're very anchored into Los Angeles. We just. In the city of LA for sale or LA county. I have, I think I have like 2700, 3000 single family lots. So. And then.
- [30:13]
A
But you never thought of going out of California and doing.
- [30:16]
B
No. Are you going to get killed?
- [30:18]
A
Why?
- [30:18]
B
I would do a project in Hawaii. I have like a.
- [30:20]
A
Well, that's similar to California.
- [30:22]
B
I know I want to do Hawaii and because I don't know, I really think the right thing there can make sense. But I've never actually done it. I've been offered to deals in Vegas, I've been offered to deals in Reno, which I love Reno as a market a lot more than like Vegas. I've been looked at stuff in Arizona, but honestly, I can't make it work. Development has to be natural, has to be there on the boots, on the ground. Like I do stuff in Northern California, but I got three people that work for me that are based in Northern California. My basically my quasi number two lives in Northern California, so.
- [30:51]
A
But you could hire people in these other states.
- [30:54]
B
You, dude, you got to be there. It's. You can't do this stuff, hiring people. This is not consultant back development. That's what a lot of guys starting out. Oh, I've got the great land use attorney and I've got the. Listen, you better know what you're doing.
- [31:07]
A
You like taking on big projects?
- [31:10]
B
Yes.
- [31:10]
A
You've got, you know, several. Yeah, a big one in Hollywood. You've got a big one in Baldwin.
- [31:15]
B
Where? Crenshaw.
- [31:16]
A
Crenshaw, Baldwin Hills. Anyone approach you to take on graffiti towers?
- [31:24]
B
No, that's not something I would do. That, That's a tough deal. I mean I. Downtown LA. Like, listen, I have bought one deal in downtown LA in 30 years and it was an industrial site and we.
- [31:39]
A
That's the LA Times.
- [31:40]
B
LA times. Yeah. And we bought it, we sold it. We, we did. It was incredible on our equity. I think it was a 4x on our equity. We kept a little money in the deal. That's probably gone. But I think downtown, I mean, you need some real leadership to come in. I think there are buys there. I mean assuming the leadership changes, but I don't think you're going to see the bottom there for another three to five years.
- [32:08]
A
In what asset class?
- [32:10]
B
All I think industrial, first of all. Industrial I think will come back.
- [32:15]
A
Okay.
- [32:15]
B
I believe in industrial. Industrial three years ago, four years ago was hot as hell in downtown. So industrial come back, office is done, office is just, it's done downtown.
- [32:25]
A
You don't think there's any comeback?
- [32:28]
B
I think very limited. I think you might have people that like lawyers that need to be close to the court.
- [32:33]
A
Maybe something that has even changed because so many judges allow for virtual appearances.
- [32:38]
B
I know. So I mean the world has changed.
- [32:41]
A
A judge doesn't want 100 people in their courtroom.
- [32:44]
B
No. So I listen, I think downtown's got real fundamental problems. I think the office market has serious fundamental problems outside of Century City. I mean Century City is probably the hottest market maybe in the country.
- [32:57]
A
Well, it's Century City, it's New York, it's San Francisco and parts of Florida and still Miami.
- [33:04]
B
Yeah, but again, so like Miami, I would be nervous about Miami because Miami is historic, a boom and bust market. And Miami's play is on New York. So Miami and New York. New York is very inflated. Right? Now both office residential rents and for sale. I think average rents right now in a brand new multi building in New York. Someone told me yesterday about $140 a year for a class A multi. So you're talking $11 rent. So an 800 foot apartment is eight to nine thousand dollars a month rent. Okay, so just think about that for a second. Okay, so you have New York, but then you have a political issue and people go oh Mandami, everything's fine, it hasn't changed. Dude, he's been in office four months. Okay, Give it some time. Miami is now more expensive than Beverly Hills. A high end home in Miami is more expensive than. It's not Beverly Hills, guys. It's just, it's not okay, it's.
- [34:02]
A
But maybe things have changed. I mean people have moved out of L. A.
- [34:06]
B
They haven't, they don't have the infrastructure. I was in Miami for New Year's and you. We think we have bad traffic. I know their traffic's. We, we look like we're, we're desolate. Nobody's there. I listen. Miami succeeds because New York fails. So they're triggering.
- [34:21]
A
But how can we say New York is failing if it's one of the hottest office market?
- [34:24]
B
That's why one of them has to give because they're, they're, they're bubbling. They're both, both markets are bubbling. I think you'll see New York will give because you see like people like Jamie Dimon, he's goes online about how the, the, the administration is against business. Like Mandami with Ken Griffin. Ken Griffin. I mean people are leaving. But Miami is a tax haven. There's not real infrastructure and backbone there to do a lot of what would be need to be done to really make it a true world financial center. I still look at Los Angeles, we have a lot of negatives but we have a lot of places. Look how quick San Francisco turned.
- [35:00]
A
But isn't San Francisco different? It's smaller, it has the AI boom. Yeah, it is just more concentrated in terms of that downtown is more integrated with luxury housing. And in terms of multi.
- [35:13]
B
I'm not talking about, I'm talking about the region, I'm talking about the, I'm not talking the downtown. No, listen, I'm not a proponent of LA's downtown. But listen, LA let's. Again LA county is, if we are the largest manufacturing county in the United States. We have the space industry, aerospace, defense. Our defense budget is going from 750 billion a year to 1.5 trillion of those Delta incremental dollars, that 750 more, I bet you 2 to 300 billion of it is getting spent in LA County. So infrastructure huge. We have people say the entertainment, entertainment, it's rechanging, it's becoming more content oriented. The content people still live here. They don't live in the Bay Area. Okay, I mean but you, you started
- [36:01]
A
off with Radford CBS and what's happening there?
- [36:04]
B
Because it's a dated model.
- [36:06]
A
And in terms of what?
- [36:07]
B
Well, I mean listen, the property when it was purchased was purchased at about a 3 cap on the investment sub 3 cap. Okay, I believe it was. I think, I know the broker. So I think they paid a 3 cap that should have been a 6 cap asset. So right off the bat that 2 billion should have been a billion dollars. Okay then cap rates move. Now maybe today it's even a 7 cap. So right off the bat you've lost a billion 2 just on your own. Now on top of that, a lot of the tendency has left but I think it can be reimagined into different kind of stages. I think instead of the big movie companies, they're content providers that need the stages that can be refocused. You're not going to have a studio taking 50 stages. You might have 40 different content providers saying hey, I need a stage on time on a lot. It's just how do you repackage it? But then an investor looks at I've got 50 tenants instead of Paramount and they look at it differently and the cap rates move and it's. So it's a combination of cap rate have blown out, they're not low people bought low cap rates, they've probably doubled, maybe even close to tripled in some sense in that industry. So you have that and you have the providers are cutting down. Netflix is still doing, is still producing. Netflix is a monster. You have. I think the Paramount merger was actually a key thing for Los Angeles, that Paramount, I think if Netflix would have won Warner, it, it would have been bad for la. I actually think Paramount winning is good because now you're going to have two superpowers in LA and Paramount's going to stay in Paramount and they're going to have Warner. So they're going to have two different operations going. Netflix is now doubling down in Hollywood and yes, maybe they're going to go to Radford, but I think that's not for the office, that's for the stages.
- [37:52]
A
Have you thought about getting into the studio side of the real estate business?
- [37:58]
B
Yes, but in a different way than you would think. I think some of these studios are too big in their size and there's a repurposing of studios maybe for other uses. So yes, I have, I look at studios. Okay, we got a 25 acre studio, maybe we make it 12 acres and we could spin off 12 acres and do residential. And that's how you sort of save the asset. I think studios still work. I have a. My son has a friend and his dad is. Has an AI advertising company.
- [38:26]
A
Is this the son who hits bombs? Exactly.
- [38:28]
B
Hits bomb was cleared three over the fence this year and by the way,
- [38:32]
A
used to send me videos of other things. Now every week you send me videos of your son hitting home runs.
- [38:37]
B
Nazis. My kid in coach. Yes, coach, soon to be machine. But so basically you can make a movie. Now this gentleman, I was making a cartoon and a cartoon that Pixar would make would have 800 people on it and a $200 million budget. Okay, he's doing it for a tenth of the budget and about 3 to 4% of the workforce. AI, he still needs a stage, but he doesn't need six stages, he needs one. So I think you might actually see a situation where more content is coming out. Listen, movie theaters, other than Century City. Other. Look at the iPic. I used to love the iPic. It's in bankruptcy now. Okay, people stream. Nobody goes to movies. I explained this to somebody in office last week, a politician. Why movie theaters don't make sense anymore. People don't. Can't view movies. The movie theaters, they have limited runs and they're straight to streaming. Why are you going to go see a movie? You're going to watch it in the comfort of your house.
- [39:37]
A
Plus it's very expensive. I mean, but if you take a family of four and popcorn, the candy,
- [39:42]
B
it's $140, 150 bucks.
- [39:45]
A
When you can see this movie within 20 days.
- [39:48]
B
Yes. For like $14.
- [39:50]
A
Yeah.
- [39:50]
B
And sit in your house, have a Coke, whatever, make your own popcorn and you're done. It's one tenth the price. And so I think that's. But that's again, streaming. AI, they all. It's sort of the modernization of America. It's the repurposing. I think you're going to see more content, more movies. AI is incredible. Look at all these AI videos. I mean, look at the political campaign. How about Spencer Preston? It's insane.
- [40:13]
A
Well, he's saying he doesn't do then.
- [40:15]
B
Well, whoever is doing it, maybe it's Elon. I mean, whoever's Doing it. It's incredible. I was at a dinner on Saturday night, and I walked in the restaurant, and who's sitting across from me? Spencer Pratt.
- [40:29]
A
Oh, yeah.
- [40:30]
B
And he was just sitting across from me.
- [40:31]
A
Was he with Heidi?
- [40:33]
B
No, he was with a bunch of people, I think, from his campaign. And they were just talking, having dinner. And I knew one of the guys that came over and talked, and I was like, hey, what's up? And it was very. Listen. He was like, diner juiced him, whatever. But it was like. It's really. The council, and people really obsess on the mayor. And the reflection of Los Angeles is. Oh, the mayor's race. It is the city council person. Like, San Francisco had its moment. If you had bought San Francisco office three years ago, you're a very rich man right now.
- [40:59]
A
People were giving 18 months ago.
- [41:01]
B
18. Two. Yeah. I would say two years ago. It has turned. It has doubled and tripled.
- [41:06]
A
I went to a Golden State warriors game earlier this year, and it is night and day, the experience of walking around that facility. You also have this Giants ballpark. You have all of the new office. You've got great retail. And what do we have? We've got graffiti towers across the street from the staple side.
- [41:24]
B
But I'll tell you a story. Four years ago. Three. Four years ago, I was in San Francisco. I had a partner at their offices there, and their offices were on Market Street. And I used to go to this restaurant when I was a dad called the Taddish Grill. It's a famous restaurant in San Francisco. They're closed on Sundays. They. They don't take reservations, and they have, like an hour wait to get in. So I'm sitting there, and I get to my meeting like an hour and a half early, and I look down the street, I go, oh, my God, that's Tadas Grill. I go, wow, there's not a line out front. I'm like, 20, 23. I walk in, I go. I sit down at the bar, I go, I want my clam chowder. Want this Like I'm eating. I want my little shrimp sandwich and my clam chowder. And I go, where is everybody? And they go, dude, nobody's been here for two years. I go, I used to come here with my dad 25 years ago and be an hour away. And they go, yeah, but Covid. And about 2018, things started changing because San Francisco started decaying before. Yeah, okay. And.
- [42:16]
A
And so do you think there's a line out the door now?
- [42:20]
B
It's. I bet you it's not out the door because people are still working from home. Because that was in the in mark. That was like the heart of the financial district. But I bet you the crowds are back. Yes.
- [42:30]
A
So before we started recording, you said June 2nd is an important date in your life.
- [42:39]
B
June 1st.
- [42:39]
A
Oh, June 1st.
- [42:40]
B
That was yesterday. That was yesterday.
- [42:41]
A
And I know we're not going to do a whole recap on the highs and lows because we did that and you're very public, but. Yeah, but you know, people are going through some tough times. A lot of my clients are going through some tough times.
- [42:53]
B
They're tough.
- [42:54]
A
They're losing properties, they're getting foreclosed on. Lenders are being aggressive pursuing guarantees, even if it's a non recourse carve out guarantee. The lenders are trying to, they're trying
- [43:03]
B
to make it more than it is.
- [43:04]
A
Yes.
- [43:05]
B
Yep.
- [43:06]
A
So June 1st was what?
- [43:08]
B
So 17 years ago, June 1st, I filed personal bankruptcy.
- [43:11]
A
Seven. So what, what year?
- [43:13]
B
2009. The peak of the GFC.
- [43:17]
A
Yeah.
- [43:18]
B
And I was written off for dead and this and you know, by fighting hard, learning, recapping. I'm meeting somebody after. Outside your office and like 30 minutes. Who was the first institutional person to recap? Me. And they did it and they sort of knew me the best and they recapped me. And I've now worked with them for 17 years and I've probably done over 60, 70 projects with them in the last 17 years.
- [43:45]
A
And so what advice do you have for people who. They're not seeing this light at the end of the tunnel. They're just seeing a mountain of, of dead and still more properties that are underwater and they're not seeing interest rates coming down to save them. I imagine it was a similar feeling 17 years ago.
- [44:02]
B
It was very tough. I think the first thing is you can't quit. I will say something. I was the chair of the rec of the Jewish Federation.
- [44:10]
A
I was going to get into that
- [44:11]
B
next, but at one of the events, somebody came up to me and said, hey, I've heard what you've talked in the past and I'd like to sit with you. And I said, sure. I sat down with this guy and he was telling me a story and I heard. I sat in my office for an hour and a half, about 30, 40 minutes. I said stop. I said, honestly, you're, you're over your head. You're. You've been very out there doing a lot of press your whole career, tweeting, podcast tweeting, all this stuff. And you got into stuff and you chased markets and chased stuff, and you might have had a little niche, but you're way over your head. And he goes, where do you. I go, you got to file bankruptcy. And he goes. And I said, you actually probably waited a year longer than you should have. And I said, he goes, well, then I'm ruined this. I go, listen, I don't know what you can and can't do. And I said to him, I go, listen, why don't you come work for me and I'll give you a chance? And he goes, well, can I come in as a partner? I go, dude, you're like, you need to learn again. You got to reinvent yourself. And he sort of talked to me a few weeks time he talked to me, and about eight or 12 weeks later, he committed suicide.
- [45:27]
A
Mm.
- [45:28]
B
And that really had an effect on me. And I've seen it with a few people. I've seen a few people in the cycle. There's been people in New York. There was another gentleman in Los Angeles I knew who was a very flashy out there driving the Rolls Royces private jets. This and. But it was robbing Peter to pay Paul. And I think I learned several things from my failure. One is I'm a big personality, but I try not. I mean, I do your podcast, I get asked to do a lot of stuff. I go, I don't want to do it, but I think you really need to make sure you have your security. You need to make sure your business is structured properly, understand your guarantee, exposure. I didn't know what guarantees were. And then in 2009, when Lehman failed, yeah, all my bad boys triggered. I went from non recourse debt to having $650 million recourse overnight. So you got to understand how your guarantees work. And a lot of people listen, lawyers understand, but people in good times and are signing up loans don't really understand the downside. So always understand the downside. But I think if you're like folks, you got to fight. It's a war. It's not easy. People always say, oh, I want to be a developer. I go, dude, it is not easy. It's tough. It's taxing on the body. I can think of a lot of easier ways to make money. It can be very rewarding, but it can also be when it's good, it's good, but when it's bad, it's bad. And it's like, listen, you know, I always say you're going through a storm or you're jet skiing. I'm Going to give you the Jet Ski analysis. And you're riding on a Jet Ski in the ocean, the waves crashing over to you. What do you, do you do you slow up or do you blow through the wave? You blow through the wave. So you just, you got to keep on going. You got to move faster, you got to move harder, you don't back down. And I think a lot of people in their life have like, nothing ever I've done has been easy. I think I've had a fight for everything. Yeah, I had an aunt that had money and an uncle, but they didn't give me. They backed me a little. Then I met institutional capital. But I made a lot of mistakes and I think I always tried to learn from my mistakes and I am far from perfect. I'm not even close. But I think the one thing is you got to keep your word, you got to do the right thing, be a stand up person. And at the end of the day, you got to work hard and don't throw stuff in people's faces. You know, just go about your business, get things done. You don't need to brag about, you don't need a Real Deal story. I mean, that's just bullshit, pardon my French. And I see a lot of younger developers that every time they do something, they want to sit down to a Real Deal interview. And it's like, dude, like, stop it.
- [48:11]
A
For the longest time, by the way, David, that was incredible. And so thank you for being so candid. And you're always so candid. For the longest time, I don't even think you had a website. You had a Gmail or a Yahoo SBC email. I couldn't, nobody could even find me.
- [48:32]
B
I have a corporate email.
- [48:33]
A
Yeah, finally. And it is very hard to find you on social media.
- [48:39]
B
I don't want to be on it. But like I saw something like the other day I called a friend of mine, he's in New York, he's very successful and I saw him on the real deal 100 most important. I go, hey dude, congrats, you're on the Real Deal. And he goes, dude, like you're on it too. And I go, what are you talking about? And he goes, you're on it too. And I go, what do you mean I'm on. He goes, oh, you're on the LA version. I go, I am. I go, they never called me. So like everybody in LA like had a, I didn't have a picture. But what they said is, they said like the guy. I think what they say Something like, oh, he walks in the battles. Like, this guy doesn't walk away from a fight or something like that. And then at the end he goes, he went bankrupt in 2009. Like, okay, it's like, it's this whole story. And they go, but he went bankrupt, so. Exactly. You know that my biggest fear was when I went bankrupt, that everybody associated my bankruptcy. I'm a loser, I'm a failure. I actually think it's probably my greatest success that I went bankrupt and then turned myself. So people that are struggling, I would tell them, dude, it will get better, but you can't quit. You got to fight on through it. And when you fight on through it, you come out on the other side.
- [49:43]
A
And how much more successful are you today?
- [49:45]
B
I.
- [49:45]
A
It's not just one monetary, but just overall life success today compared.
- [49:51]
B
I was. Listen, my life was Entourage.
- [49:55]
A
You were hanging out with Spencer Pratt in 2005.
- [49:58]
B
I was hanging out with the cast. Entourage.
- [50:00]
A
Yeah.
- [50:01]
B
There's. There's a funny story.
- [50:03]
A
Literally.
- [50:03]
B
Yeah, I really was. I. I remember there was. I had a big. I didn't know you then. I had a big Christmas. I used to have a big Christmas party. Every year was crazy. And one year there was a attorney in LA that came to the party, invites a bunch of people, and he's sitting on my couch, and I have a three level house and it's in my yard. There's like 900 people at my house and he's sitting on my couch and it's Bill Maher and like Jeremy Piven and somebody else and he's like, like, whoa. He's like, yeah, they're just there. And it's like my life was like, sort of like quasi entourage. But then when things went bad. All your friends who love you like the bankers. Oh, David, I love you. Like the bankers always say are like umbrellas when it's. When it's clear is when you have them. And when it's raining, you can't fucking find them.
- [50:45]
A
Yeah.
- [50:45]
B
So they come and go, but they're not. They're not sort of. So you just got to know who your real friends are. It's really good to have two or three really solid partners that you can deal with. And I have a lot of partners because I had an exclusive partner, Lehman, that ended very badly. But I think life's a fight. You just got to keep going through it and get better at what you do and specialize. Don't spread out too much. And I think that's what a lot of young people do they get into 10, 15 different markets? Who? I'm syndicating deals like the Tides guys. I mean, that's horrible what happened. It's a horrible story. But, like, listen, they just went crazy and. But there's a lot of guys like that. I know people that used to work for investors of mine that went on their own, started value add, multi, and now they have 8,000 units, like, in seven, eight years. And it's like, I don't know how the story is, but I can't. It's a lot of Southwestern and Midwest. It's a lot of Southwest and sky states, like all rocky. It can't be good. And so people get caught up and it just know your markets.
- [51:55]
A
So final, final question. Final, final discussion point. We're approaching an hour here, and I want to be respectful for your time.
- [52:01]
B
Keep going, man.
- [52:03]
A
You're very philanthropically involved and you were the head of the Jewish Federation real estate cabinet for three years.
- [52:12]
B
Wow. They gave me that. I think they let me do it for three years.
- [52:14]
A
An extra year.
- [52:15]
B
Yes.
- [52:17]
A
I guess just talk about sort of the state of, you know, being Jewish in the city and anti Semitism and it's something, you know, I grew up here.
- [52:28]
B
I grew up in Fresno. I grew up in Fresno. I grew up in a little. So actually I grew up with anti Semitism. So I actually.
- [52:33]
A
Because I never really experienced it.
- [52:34]
B
No, no. You were like, in Beverly Hills. Beverly Hills. I mean, because I remember when I grew up in Fresno, California, 2,000 people in my school, like three Jews. And I remember when I went to college and I pledged fraternity at USC and I pledged a quasi 70% Jewish house, and half my pledge brothers, or a third of them were from Beverly High. Yeah. And they're like, oh, this one, this one. I'm like, guys, I've never been around this. And it was funny because they used to all call me the hick. I had an IROC Z28 Camaro. Yeah. I used to be in really good shape. I wear tank tops and these crazy, like, iguana go, go shorts.
- [53:15]
A
We got to get pictures of this.
- [53:17]
B
Yeah, I have some. And I'd wear tank tops and driving my Camaro. And I was like, the farthest thing from, like a west la.
- [53:25]
A
And this is when you were trying to pick up on my sister.
- [53:27]
B
No, I knew. I went to my friend. Did not. Not me, but no, your sister. I went to SC with your sister. Yes. No, but I think it was always in my life. It disappeared. My mom, who's 96 years old, always Tells me in bad times, people blame the Jews. And it's very sad because I see all the problems in the world are now because of 2/10 of 1% of the population. I mean, it's really. I think a lot of it has to do with social media. TikTok, Instagram influencers. There's a lot of what I call dark money in the space that's like changing the message. But we went on October 7th from where everybody, I think, felt bad for us to, like, the next day, once we hit, once we defended ourselves. We were the. We were the fucking. We were the bad guy. We were the genocide or we were this. And how can a 210 of 1% of the world, where they're surrounded by a billion and a half people that hate them, be the genocidal nation? That's a joke. You know, if Israel stops fighting, they die. If the other countries stop fighting, they have peace. Okay, Antisemitism is bad. It to me is. I mean, I'll tell you something with the camera. I am a lifelong registered Democrat. How's that for surprise? But I don't even know what this party is anymore because I see the future of that party. And people, like, they weaponize aipac. I don't take AIPAC money. See all this, like, dude, if you look at Qatar, you look at the influence of Qatar in the world versus those, it's. Come on. I mean, you have people like Tucker Carlson and Megyn Kelly who used to be like, one way, who are now basically. I'm surprised they're not, like, praying five times a day on a rug. I mean, they've gone crazy. And by the way, I'm not saying anything bad about Islam. I have no issues with Islam. My trainer is Islamic, from Iran. He is the strongest supporter of Israel you've ever met in your life. He's married to a Jew. Okay, my.
- [55:28]
A
This sounds like a Curb youb Enthusiasm.
- [55:30]
B
No, my tennis coach, I have a lot of those, too. But my tennis coach, I played tennis with this guy, my tennis coach. I remember right after October 7th Avenue. He's a Muslim guy from Morocco. Very nice guy. He said, hey, you know, I don't condone that. That was horrible what happened. I mean, I condone what happened. I hope I get yasin. We're all good. Dude, I know you're not that way. I've known you for this. I don't judge you based on your original. I judge you based on the person you are. And we don't judge anybody based on the people we Are if you want to get rid of the Jews, then you would have no medicine. Nobel Prizes. I mean, look at the whole impact on the world of our people. And I think a lot of it has to do with just jealousy. I really do. I mean, and it's like, listen, there's no conspiracy business. I think when you are always having to prove yourself and people are trying to knock you down, it makes you work harder. And I think that's a lot of the reason why Jewish people appear to be more successful. They're not given as much. They've had to work hard. They've had barriers. And they've broken through the barriers through education. And that's what a lot. I think groups don't look at education as a way to break through the barriers. Everything starts with education. This country is equal. Everybody has the same opportunities. It's an amazing country, and I love this country. But I. Antisemitism, I think, is really big. It's the far right and it's a lot of the left. And it's sad.
- [56:47]
A
It's on both sides.
- [56:49]
B
It's both sides, but it's more one than the other, I think, now, which it used not to be.
- [56:54]
A
Based on that, I think. I hope there is politics in David Schwarzman's future, not just from. My wife would never let the contribution side.
- [57:03]
B
My wife would never let me start
- [57:05]
A
with Beverly Hills City Council.
- [57:06]
B
No, I don't wanna do that. Go big or go home. No. Yeah, but, no. But, no. But, no. Listen, it's.
- [57:12]
A
I mean, final word. We're approaching an hour, so I guess just final. Final takeaway on our. Celebrating our hundredth episode of the Kirsch Connection. What do you want? The final takeaway for my audience.
- [57:27]
B
Listen, I think you're an interesting profession in real estate. It's a tough business in great times, it's amazing. But now you're in, like, rough cycling. I think it is gonna get better, but you gotta push on through and don't quit and reinvent yourself. There's always opportunities out there, and in failure there can be success. Maybe this deal doesn't work. Maybe you gotta figure out a way to recapitalize it. There's always opportunities. You just gotta know when to spot it.
- [57:54]
A
Well, I'll tell you, David, I loved having the first episode. The hundredth episode.
- [57:59]
B
We'll do a thousandth.
- [58:00]
A
I was gonna say, how about just 200,000?
- [58:02]
B
I don't know if we're gonna do that. I can do 200.
- [58:04]
A
200.
- [58:05]
B
You'll bucket.
- [58:06]
A
You're Always there for me.
- [58:07]
B
Absolutely.
- [58:08]
A
Post fires I would say nobody probably called me more than you. Just to check in. No agenda. Always.
- [58:16]
B
I didn't want to buy your lots in the off that street. I'm actually buying a deal. The palazzo.
- [58:20]
A
Yeah. Well, we could talk about that time. How about the 200th episode? We'll do it in the Palisades and we'll see.
- [58:26]
B
We'll do it. We'll do it on the development we're doing.
- [58:28]
A
That's great, David. Best of luck for everything. Thanks for coming in.
- [58:32]
B
Thank you. You're the man. And this guy's amazing. You're. I've known you. I met you 2013 at Obeka or 2012. I don't remember. Obika remember? It's. I don't know if it's even there.
- [58:44]
A
It's not.
- [58:44]
B
It's not. Yeah, the cheese bar, wasn't it? Yeah, the cheese bar for a title reps matzo ball.
- [58:51]
A
Yeah, for her.
- [58:52]
B
Her mixer. She had. And I met Andrew and hers last name and it's like oh my God. And become friends and you've done great. And I've watched you. I mean their firm has taken off and I think you're a testament to hard work too because you started SKAR KIRSCH what, eight years ago?
- [59:10]
A
No, no, at that time. 2012. 2013.
- [59:12]
B
Okay, okay.
- [59:13]
A
Yeah.
- [59:14]
B
Because you were still at the other firm. I think when I met you you were still. And you started and you know, I mean look what you've done in like 13 years. And I mean it's incredible and it's with again have a good name, treat people right and you and provide a good service and I think you can be successful and I think you really epitomize sort of what I've tried to tell people as well.
- [59:34]
A
Well, I appreciate it. Thank you for coming on again for the sequel we'll have. This is like the Godfather 1 and 2. Godfather 3 wasn't as good, but we'll
- [59:42]
B
make sure that our Godfather three.
- [59:44]
A
Yeah, for sure.
- [59:45]
B
All right.
- [59:45]
A
That is another episode of the Curse Connection.