Mormon Money & Cardone Waterfalls

Summary

The Promote Podcast — Episode Summary

Episode Title: Mormon Money & Cardone Waterfalls
Hosts: Hiten Samtani (A) & Will Krasne (B)
Date: September 3, 2025

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Overview

This episode dives into three consequential commercial real estate (CRE) stories:

1. Grant Cardone’s acquisition of a distressed Boca Raton property—featuring a novel Bitcoin angle and syndicator strategy.
2. The broader tug-of-war between institutional and retail capital in private equity real estate.
3. A deep-dive into the secretive, powerhouse real estate playbook of the Mormon Church, one of the best operators in religious real estate.

The discussion is irreverent, detailed, and insider-focused, true to the podcast’s creed: “for insiders, by insiders.”

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Segment 1: The Profane — Grant Cardone’s Boca Raton Rescue and the Bitcoin Twist

Timestamps: 01:36–12:09

Who is Grant Cardone?

• OG syndicator, predating most Sun Belt players ([01:44–02:19])
• Built Cardone Capital from scratch—20,000 investors, $1.7B raised, ~$5B AUM; emphasis on retail syndication ([02:19–02:29])
• Known for high retail engagement, mastery of the “distribution channel” to everyday investors ([02:53–03:13])

“He basically manifested this entire real estate empire one sucker at a time.” — Will ([01:57])

The Deal: 101 Via Mizner, Boca Raton

• Bankrupt 366-unit rental with $195M of Blackstone-owned debt ([03:38–04:15])
• Sponsor Mark Gensheimer faced similar troubles elsewhere; property in bankruptcy ([03:57–05:03])

The Foreclosure Chess Match

• Blackstone executed a UCC foreclosure (quick vs. cumbersome court route) ([04:24–04:57])
• Penn Florida filed bankruptcy; Cardone arrives as “stalking horse” bidder ([05:03–05:08])

“If you’re a stalking horse, you can agree to set the floor of the pricing… sometimes you can get a breakup fee.” — Will ([05:08])

Competing Bidders

• Crescent Heights (institutional) offered more but needed longer diligence for condo conversion; Cardone won on “certainty”—$20M hard deposit, quick close ([05:53–06:38])
• Cardone’s $235M bid closed the deal; Penn Florida retained a small stake ([06:56–07:00])

The Syndicator Playbook

• Cardone closes fast using own funds, then syndicates—taking hefty fees ([07:00–07:52])
• Retail channel allows for non-institutional, more lucrative economics:

“They can kind of see the backend economics for them because of the fees that are built into their process.” — Hiten ([07:36])

The Bitcoin Waterfall

• Shock twist: Reorg entity includes $100M in Bitcoin ([08:27–08:44])

“Cardone’s investors are paying an AUM fee on bitcoin—what?” — Hiten ([08:45])

• Penn Florida has 12-month buyback option ($300M); Cardone has a call on Penn’s BTC at cost (so Cardone captures all crypto upside) ([09:00–09:32])

“Grant Cardone only does good structures for him.” — Will ([09:32])

Analyst Reaction

• Cites Ed Bond’s NPL newsletter: “I was and still am skeptical of including BTC in a real estate transaction. If I want BTC exposure, I can easily buy it… It adds volatility to an already risky real estate deal. But for Cardone it’s a great situation.” ([09:46])

“Who doesn’t love free upside?” — Will ([10:07])

Lessons

• Retail syndicators like Cardone can write creative, asymmetric deals by virtue of speed, retail capital, and direct investor loyalty ([11:02])

“He’s not selling a real estate deal. He’s selling Grant Cardone.” — Will ([11:18])

• Large sums for alternative assets (crypto) possible with hot distribution channels:

“If you can raise it, you can do it… people can raise money for crypto stuff.” — Will ([11:30])

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Segment 2: Institutions vs. Retail — The New Gold Rush for Capital

Timestamps: 12:09–18:45

Rising Retail, Nervous Institutions

• All major fund managers (Blackstone, Brookfield, etc.) now building retail capital pipelines, eyeing the mammoth 401k pool ($12T) ([12:09–12:35])
• Institutional investors pushing back—fear of losing influence and preferential economics ([12:35–12:57])

“If you’re like, I want lower fees, I want you to make less money, I want more decision rights… what do you expect?” — Will ([12:57])

Why Syndicators Love Retail

• Retails bring fatter fees: “Acquisition, debt, asset management, promote, catch up” ([13:10–14:00])
• Catchup mechanisms in retail deals can yield nearly 40% of total promote, vs. 12–15% for the same returns with institutional funds ([13:10–14:00])

Institutional Realities

• Institutional capital usually structured via closed-end funds or SMAs, longer hold periods, tedious fundraising processes, less lucrative for sponsors ([14:10–15:46])
• Institutions value co-investment (“co-invest”) mainly for scaling allocations at lower fees ([15:46–16:16])
• Example: Large deals use a mix of fund equity and institutional co-invest ([16:16–17:05])

Retail Fund Dynamics

• Retail “evergreen funds” have lower hurdle rates (as low as 5% vs. 8% for institutions), easier economics for sponsors ([17:05–17:20])

Fundraising Trends

• Institutional PE fundraising shrinking ($600B globally, lowest in 7 years, per Preqin) ([17:29])
• Retail money is less coordinated; gives sponsors a freer hand ([17:57])

“It’s been coming for a long time… You can just layer into this one API, tap the vein and it comes rushing out.” — Will ([17:57])

Specialist Take

• Wealth managers and RIAs will be wined and dined as key CRE capital sources ([18:12–18:24])

“You are going to get a lot of steak dinners. You will not have an iron deficiency.” — Will ([18:19])

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Segment 3: The Sacred — The Mormon Church CRE Playbook

Timestamps: 18:45–26:19

Land as Spiritual & Investment Capital

• Religious institutions traditionally major landholders (Trinity Church in NYC, etc.), but rarely professionalized ([18:45–19:08])
• Major exception: The Mormon Church (The Church of Jesus Christ of Latter-day Saints) ([19:15–19:17])

“They run that shit tight. They have an incredible property portfolio.” — Hiten ([19:17])

The Mormon Empire by Numbers

• Real estate portfolio: est. 1.7 million acres, $16B–much higher in truth, all in A+ locations ([19:21–19:37])
• Large farmland and industrial investments (e.g., in Florida: >2% of the state’s entire landmass) ([19:37–20:16])

“That's a staggering number. Like, Florida’s a pretty big place.” — Will ([20:11])

Institutional Sophistication

• All-cash buyers, no leverage; recently paid $400K/unit in Boca apartments, all equity ([20:19–21:03])

The Source: Tithing and Ensign Peak

• Tithing: Members contribute 10% of income ([21:03–21:12])
• Massive perpetual capital pool (Ensign Peak): $40B AUM in 2012 → $100B in 2019 ([21:12–21:34])
• No redemptions or liquidity pressure; investment horizon “for the second coming” ([21:55])

“They truly believe that they’re building for the second coming. So their entire real estate strategy is informed by that very, very long term approach.” — Hiten ([21:55])

Property Reserve — Mormon CRE Management

• 200-person professional team, led by BYU-trained developer Ashley Powell ([22:12–22:47])
• Standardized processes, templated floor plans, long-term master plan approach ([22:12–23:22])

“You’re really building stuff over the long term… This is going to take 100 years.” — Will ([22:53])

• Ex- and current Mormons vouch for Property Reserve’s sophistication ([23:31–23:42])

Broader Ethos

• Culture of craftsmanship, hard work, and missionary-like salesmanship—translated to real estate business ([24:10–24:24])
• Under-the-radar scale, likely many JVs and quiet investments ([24:35–24:57])
• Unique mission statement focused on “caretakers of sacred funds…sustainable cashflow” ([25:14–25:59])

“As caretakers of sacred funds, we invest in responsible, reliable and revenue-generating properties to support the church’s mission with a focus on creating sustainable cash flow.” — Property Reserve mission ([25:37])

Notable Quip

• Will: “I don’t think I can see the Mormons and the Scientologists getting together and letting Grant Cardone add in Bitcoin to these deals. You’re thinking small, bro. You’re thinking small.” ([26:04])

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Notable Quotes

• “He’s not selling a real estate deal. He’s selling Grant Cardone.” — Will ([11:18])
• “They run that shit tight. They have an incredible property portfolio.” — Hiten ([19:17])
• “If you can raise it, you can do it. And I think right now, very clearly people can raise money for crypto stuff.” — Will ([11:30])
• “They truly believe that they’re building for the second coming. So their entire real estate strategy is informed by that very, very long term approach mindset.” — Hiten ([21:55])
• “As caretakers of sacred funds, we invest in responsible, reliable and revenue generating properties to support the church’s mission…” — Property Reserve mission ([25:37])

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Key Takeaways

• Cardone’s syndicator playbook leverages his huge retail base for outsized speed, certainty, and creative (even risky) structures like real estate/bitcoin hybrids.
• Retail capital is the new battleground — managers and sponsors can juice their economics with retail in a way institutional capital won’t allow.
• The Mormon Church’s property strategy is a unique blend of scale, professionalism, and mission-aligned patience, making them among America’s most formidable and discreet real estate investors.

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Transcript

[A]

The objective, of course, is spiritual. We live, however, in a material, physical, temporal world. That's a quote from Ezra Taft Benson. He was a former Secretary of Agriculture under Ike Eisenhower. But more importantly for us, he's a former president of the Mormon Church.

[B]

The only president of the Mormon Church that I recognize is Jen Shah, and I think she's in prison.

[A]

Welcome back to the program Remote podcast, your insider guide to the money and mania of the CRE markets. I'm Hitan Zamtani.

[B]

And I'm Will Krasny.

[A]

Dude, we're officially past the 25 episode mark. It feels good, like we're a real podcast now.

[B]

Yeah, I know. Except for the fact that our YouTube presence is abominable. But we're gonna fix that. We're gonna get these Handsome Mugs on YouTube.

[A]

Thank you to our listeners for all the love. It's been a really fun journey so far. All the love and occasional stick about waltz.

[B]

Right? Or real page.

[A]

Or real page. That one was good, too. If you haven't, please write us a review on Apple or Spotify and reach.

[B]

Out to partnerships for advertising if you want to reach our entire beautiful audience of nut jobs.

[A]

Today we're talking the Mormon Real Estate Playbook. How they built a serious real estate portfolio and then also, crucially, ran it like serious people. OG Syndicator Grant Cardone swooping in to rescue a distressed Boca rental. And he's bringing bitcoin to the table. And institutional LPs feel some type of way about real estate private equity's courtship of retail money. Well, I'm going to leave this one to you. Should we start with the sacred or the profane?

[B]

The profane.

[A]

All right, then it's going to be Grant Cardone. Okay, what is happening in Boca Raton?

[B]

That's a question that a lot of people ask all the time.

[A]

All the time. In a variety of reasons. We should start with just kind of who Cardone is. OG Syndicator. Before we had Rise, before we had Tides or gva, any of the Sun Belt guys, we had Grant Cardone.

[B]

So I think you're selling the man short. Before we had Andy Elliott, before we had the manipulated time guy, yeah, we had Grant Cardone. You're thinking small, bro. You're thinking small. So Grant Cardone started off selling. He was a drug addict. He says he was selling cars. And he basically manifested this entire real estate empire one sucker at a time.

[A]

And it's a pretty good empire. According to Cardone Capital, nearly 20,000 investors. They've raised $1.7 billion, and it's an AUM of about 5 billion bucks.

[B]

AUM is nebulous. He sells the equity at a markup to his investors. He used to have all the disclosures at the bottom of a page with like dark blue font and like slightly lighter blue lettering. Like a lot of real scummy stuff. That said, he buys good real estate, which again, like, the whole point of this is it's not hard to figure out what good real estate is. That's not investing. Like the investing is trying to figure out risk reward.

[A]

Anyway, he's mastered, I mean, this is the whole thing, right? He's mastered the distribution channel to retail, which is like the most coveted thing in all of real estate. If you have a path to your wealthy lawyer, doctor, whatever, you can be really competitive in this space.

[B]

Aura is the lowest cost of capital. First episode.

[A]

And he's got tons of aura. We got to give him that.

[B]

Say what you want about him, he's got a lot of aura.

[A]

He's very big, not only in the real estate world, but also in that broader world of entrepreneurship gurus, sales masters, et cetera. He runs the 10x conference. You know, everyone from Donald Trump.

[B]

Oh, wait, Lloyd Blankfein, you should be ashamed of yourself for speaking at that conference.

[A]

It's kind of a grab bag of silver tongue devils, let's say.

[B]

It's not the manosphere. It's like slightly adjacent to it. It's like the TRT sales guru sphere.

[A]

Let's get into the deal a bit. There's a bankrupt Boca Raton rental property, about 366 units. And the sponsor was a very interesting cat by the name of Mark Gensheimer of Penn, Florida, Fairly prominent investor in those parts. And he's had quite a bit of trouble with other deals, not just the one we're going to talk about.

[B]

The golf club in Port St Lucie. I think there's a land parcel there that also faced foreclosure. Typical Florida book of nonsense.

[A]

The one we're going to talk about is 101 via Meisner. And he had $195 million of debt on it. Most of it was owned by Blackstone. And Blackstone moved to foreclose.

[B]

Yeah, he had a maturity default.

[A]

Yeah.

[B]

I think the issue was that he was going to have to inject a lot of capital to pay off the.

[A]

Loan, which, yeah, there was a pay down clause which was pretty onerous.

[B]

He either couldn't or didn't want to do. And so what did Blackstone do here? Typical Blackstone savviness They did a UCC foreclosure on the ownership interests of the owning entity.

[A]

And what does a UCC foreclosure do? Basically, it lets you bypass the long, sprawling court process, which can take years.

[B]

Right, Exactly. It's just like, cut to the chase. There's a cat and mouse game here. And you know these guys. Like, one of the things you can do is if you throw something into bankruptcy, that then can create a whole host of issues which take a long time, which Blackstone is like, trying to avoid.

[A]

So Penn Florida does this. The entity goes into bankruptcy, and then you got our guy Cardone coming in.

[B]

Stalking horse, Grant Cardone.

[A]

What is a stalking horse?

[B]

If a bank or lender is auctioning something, they want there to be action in the auction, so they are incentivized to have people show. If you're a stalking horse, you can agree to set the floor of the pricing, and in exchange for that, you can get some protections. You can get a, you know, sometimes you can get a breakup fee if it goes above, if it goes away from you. But basically what you're doing is saying.

[A]

Hey, like you're setting the minimum bid for whatever comes next.

[B]

Precisely.

[A]

Okay.

[B]

And then with the hopes that it stirs more bids above that.

[A]

So there wasn't as much interest in this Boca Raton multifamily property as you might think. There was only one other really serious bidder. And it's a huge player in South Florida. Really, like, big institutional money. A real developer, Crescent Heights, which is run by Russell the Relentless Galvin.

[B]

They have a tremendous private jet.

[A]

Will, you're so lame. You're talking about jets doing condos and cruise ships now. Sorry. So Crescent Heights comes in, they offer a higher number. They wanted a longer due diligence period because the plan here was to do a condo conversion. As you know, those can be really messy, time consuming curve balls that can be thrown at you.

[B]

You got to do all the buyout. Like, it's really a lot of legal headaches and just execution headaches. And so this is actually like, boils down pretty simply. It's like price versus certainty. So, you know, this is something every seller deals with. And, you know, it's, do you want the higher number, but maybe there's some risk there? Or do you want Grant Cardone, you know, slapping it on the table with a $20 million deposit, knowing that he's got the money machine behind him and it's going to close?

[A]

And that's precisely what happens. Crescent Heights later pulled their offer we're not sure why. And Grant Cardone comes in and wins this thing with a $235 million bid in the restructured entity. Grant Cardone owns about 92% and Penn Florida stays in the deal. But obviously Grant's going to go out and do his thing after Grant Cardone.

[B]

Owns 92% of this thing. Till the end of this sentence, basically.

[A]

He'S like already got the pitch machine moving pretty standard in what the Cardone playbook, right. Put up the cash to close or win the deal and then syndicate out and make fees and make your money right there.

[B]

One quick thing about certainty versus certainty in price is that this was actually really common during the boom days of 2021 and 2022, people. If you're wondering how did syndicators win all these deals? Because presumably all the big institutions were in these bid sheets. They would throw down just massive amounts of money, like non refundable day one and be like, here you go. And if you're a seller that's very.

[A]

Compelling, they can kind of see the back end economics for them because of how they raise the money, all the fees that are built into their process.

[B]

If you look at acquisition fees, debt fees, management fees, asset management fees, success.

[A]

Fees, 25% success fees, pretty good disposition fees.

[B]

Like even before you get into the promote divided by the cash contributed by the sponsor into the deal, like a lot of these guys like had negative money in the deal basically from day one. And so you're like, yeah, whatever. Like, okay, okay. We find out that, you know, it's built on Indian barrel of ground during diligence, like we'll just close. It's fine. Sometimes dead is better.

[A]

But here we have an extra twist that kind of elevates this story to a great promote story. What happened here?

[B]

This is a jv, not just between Penn Florida and Grant Cardone. There's a third member in there, Shytoshi Nakamoto.

[A]

Oh, wow. Yes. Cause when this all shakes out and you have the newly reorganized entity, they disclose that they've got a nice asset in there besides the multi family Property. They've got $100 million worth of Bitcoin. What? What? What's going on?

[B]

Genuinely flabbergasted.

[A]

Cardone's investors are paying like an AUM fee on bitcoin. What happens?

[B]

I think that's right.

[A]

This is astonishing.

[B]

So somehow Grant's structuring this as like a call option. Yeah, somehow.

[A]

What happens here is that Penn Florida has a 12 month purchase option if the condo conversion doesn't go through, they have a 12 month purchase option to buy the property back from Cardone outright for $300 million. So he's going to make money there already. But Cardone has a call option to purchase their entire interest in the JV's remaining assets, which means the Bitcoin for an amount equal to Penn Florida's cost basis. Which means if Bitcoin appreciates in that time, Cardone gets all the upside. It's a pretty good structure for him.

[B]

Grant Cardone only does good structures for him.

[A]

I also want to shout out an amazing write up on this deal that prompted this story from Ed Bond, who's an NPL investor. I'll link to the write up in the show notes. It's a lot of fun and it's amazing forensic dive yes, well done.

[B]

Well done Ed.

[A]

Ed writes the following I was and still am skeptical of including BTC in a real estate transaction. If I want BTC exposure I can easily buy it. I don't need Cardone to buy BTC and charge me an AUM fee. It also adds volatility to an already risky real estate deal. But for Cardone it's a great situation.

[B]

Who doesn't love free upside?

[A]

Talk me through what it looks like. If you're over the barrel as an investor in this property and you want to stay in the action somehow, how do you end up saying yes to a structure like this?

[B]

There's two bidders and one of them's a real shop with real chops and it's like, hey, it's going to take us a long time to figure out this condo deconversion. I know you're in maturity default so so just hang out. And the other guy is like here's a bunch of bitcoin. Like you don't really have a choice. You know, they both bid well over the amount of the debt. I mean that was the face value. Who knows what it is plus accrued interest plus legal fees or whatever.

[A]

Sure.

[B]

So I mean they basically get a hope note on this thing. You know, they're not putting in fresh equity and they still own 8 odd percent of it. The choice was this. Give the keys back or hope you can fancy feet long enough for Creston Heist to do their DD and not find any material issues in clothes. Right?

[A]

The big takeaway for me, if you've built out a great distribution channel to retail like Grant absolutely has, then you have the ability to move really quickly in situations like this and structure things that are phenomenally good. For Grant Cardone Totally.

[B]

I mean, because he's not selling a real estate deal. He's been selling Grant Cardone. And he's got a lot of people who are like very excited about Grant Cardone.

[A]

I would have expected like a 5 million kind of Bitcoin sweetener of some kind, but this is $100 million.

[B]

It's like what you can raise for, right? If you can raise it, you can do it. And I think right now, very clearly people can raise money for crypto stuff.

[A]

So Grant Cardone's really fond of saying never reduce a target, instead increase action. And I think throwing bitcoin into the mix here surely qualifies.

[B]

It actually worked out that Penn, Florida stayed in the deal because had they just left, honestly, Grant Cardone was going to label them a suppressive person and the returns wouldn't have been there.

[A]

This is kind of related, right, to what we've just been talking about, which, which is building a retail pipeline. All the big fund managers, your Blackstones, your Brookfields, your kkrs, your blah, blah, blah, they're all obsessed with this giant pool of retail money to be had. We've talked previously about the 401k pot of gold, $12 trillion that could be flowing, some of it into private credit deals. And guess who's getting a little bit butthurt about all this action and the attention on retail?

[B]

Is it the investors?

[A]

It might be sovereign wealth funds, the pensions, the endowments, the insurance companies, kind of your traditional bankrollers of most CRE action have been feeling some kind of way about all this. They're saying if you're going the retail route, are we going to get lower allocations? Are we going to lose kind of our clout in setting terms and such.

[B]

I mean, the answer is yes. If you're like, I want lower fees, I want you to make less money, I want more decision rights. And I also am going to make the sales process to get my money way harder. Like, what do you expect?

[A]

And you had said this earlier, right?

[B]

If there's two shops, they each raise $100 million, they do 18 IRR1 9 MOIC deal. The shop that raises 100 million from retail investors is going to be way richer than the shop that raised the money from institutional piece. Because you can get not only just like the acquisition fees, asset management fees, maybe higher, promote, lower pref, whatever, but you can get like a catch up for instance, which is a thing in, you know, certain institutional funds, but less so if you're raising like straight JV equity. The catch up basically Works out to. If a deal does a 2 1/2 x over 10 years, their promote ends up being about 40% of what was initially raised. Right. If you don't have a catch up and you do the same return, same pref, same everything, it ends up being something like I think like 12, 15 cents on every dollar. So it's a huge disparity.

[A]

So you can really juice your economics by going retail totally.

[B]

And then also you can have like a longer tail on a retail deal which means you can like play the long game and like play for whole dollars.

[A]

Just to clarify, the majority of these institutional LP deals are closed end funds, is that right?

[B]

It depends, right. So institutional LPs will allocate dollars into a fund, a closed end vehicle which is seven, 10 years with two or three one year extensions. But I'm also talking about an SMA account which is just a separately managed account where they will invest directly with one LP and they'll generally have a.

[A]

Little buy box and a set of.

[B]

Terms to go do certain strategies and on those like you're just not getting a catch up, you're not going to get great fees. Again, ask me how I know. And it's so all else equal, retail like makes more sense to make more money. The trick shot is that institutions had the ability to write a single check which again like going back to Greg Cardone, like why would these people take the deals? Because they offer certainty. You know, you can close, you don't have to run around and like raise a million checks.

[A]

But I think when the mass, when the pool of capital at play is so massive, you can take a few more shots because there's so much money to play with. All these big fund managers have been setting the stage for this, right? They knew that the 401k thing might be coming. They obviously lobbied pretty hard for it and they've been setting up these relationships with the vanguards of the world.

[B]

They've been working on the distribution and also too yeah, you're dealing with one group if you're trying to raise institutional money, but it's going to be how many meetings, how many months. They want to see so much from you, you have to put together so many materials. It again adds to that like you need to have like so much full time IR staff. You have to do things on the back end that don't add value necessarily to your investments to justify these people coming on your platform.

[A]

One of the things they're concerned about that the institutional LPs are concerned about the loss of co invest. Can you talk a little bit about what that looks like or what that means?

[B]

Convest is something that sponsors liked because it allowed them to raise more money and upsize and LPs liked because they could negotiate lower fees on those co invest dollars. They're generally fees, but they're much lower. Again, depends on the deal, depends on the sponsor, depends how much leverage they've got. But they will be significantly cheaper than investing, like directly into the fund. And so it's a way to blend your costs down and allocate more dollars at the same time.

[A]

Let's say you're going to put 500 million into Cortland Multifamily Bonanza Fund 1, and then you're going to invest another 75 million as a co invest.

[B]

Right. Or you have the ability on certain deals to upsize your co invest. Because the way this works is if you like, if you have a $2 billion fund, you're like, wow, that's a huge fund. I can buy 6, $7 billion worth of real estate. But like, let's say you want to buy a $3 billion portfolio of industrial.

[A]

You can't write that check from the fund.

[B]

Yeah, yeah, you can't write a 50% of the fund check. So, you know, maybe you do a $300 million slug out of the fund, you do 700 million of co invest, and so you can go raise that from the same LPs. You've already got docs for the most part, and then it's just really negotiating fees. So it's a seamless transaction basically for both groups.

[A]

There's an interesting point in the Bloomberg article. I don't know if this quite applies to real estate specifically, but it said the hurdle rate for institutional LPs is typically around 8%. But for retail evergreen funds, more and more of these things are going that route. It could be as low as 5%.

[B]

Can't necessarily speak to that firsthand, but it makes sense because if you have an evergreen fund, how do you get liquidity? And if you're going to be in it for a longer time, the IRR math works against you every day.

[A]

The other context here is that it's been harder and harder for fund managers to raise from institutional LPs. So Prequin had some data on private equity firms raised just under $600 billion globally for the 12 months ending June. That's the lowest haul in seven years. So that pool of capital is shrinking and they're fussy and demanding anyway, why not go to these retail Investors who've got a lot of money to throw at you and are obviously not grouped together in the way that they can have the same leverage.

[B]

It's been coming for a long time. And also too, as all of these custodians have so much capital, it's not as if you have to go be grant Cardone and build this channel yourself. You can just layer into this one API, tap the vein and it comes rushing out.

[A]

We had talked about how if you're a RIA or a wealth manager, you're probably going to have a really good time in real estate for the next few years.

[B]

You are going to get a lot of steak dinners. You will not have an iron deficiency.

[A]

Another point that the institutional LP sounded the alarm on is if these fund managers have all this money kind of burning a hole in their pocket, they might go chase deals that they have no business chasing.

[B]

What? Never. These guys are fiduciaries. I'm shocked, shocked to find that gambling.

[A]

Is going on in here.

[B]

Religious institutions have always been major players in real estate. Trinity famously was gifted 215 acres by Queen Anne in the 1700s. They own a huge chunk of Hudson Square. But I think most of the religious folks are not as good at the real estate game themselves.

[A]

Potentially they've been endowed with the land, but not so much endowed with the skills.

[B]

They have higher pursuits at 10.

[A]

That's true, except there is one shining exception to this rule.

[B]

The Mormon Church.

[A]

They run that shit tight. They have an incredible property portfolio.

[B]

What do they have?

[A]

It's probably a lot bigger than this, but this is, I think as of 20, 20 or so, 1.7 million acres, $16 billion worth of real estate. I think it's a lot more. This is just what people have been able to find so far. And they're amazing. They buy in A plus locations.

[B]

Obviously the Church has bought lots of farmland, spent like $300 million buying 45 or 46 farms across like eight states. But they're buying now also discrete assets. So they bought this big rental building. They bought another one recently. They bought a really large like well over a million square foot industrial building in Hialeah in Florida too, in Q4, I think of last year. And what's crazy is that they're doing all these deals in Florida. According to the Salt Lake Tribune, they own over 2% of Florida's landmass.

[A]

Wow. What are they? Blackrock?

[B]

Yeah, right. I mean, like that's a staggering number. Like Florida's a pretty big place.

[A]

That's an astonishing whole yeah, it's pretty damn big.

[B]

Yeah, they've got a huge ranch in Central Florida as well. They have a forest property in the Panhandle. I like, I didn't know there were forests there. But apparently.

[A]

Who are they competing with? Stefan Soloviev.

[B]

Stefan Soloviev, John Malone and a couple others. But I mean they're one of the largest landowners and again, which makes sense if you have like a super, super long term trajectory. But now they're buying multifamily too. So paid 400 a unit for a massive deal in Boca. Also In Boca, the 384 Unit del Ola apartment complex from Clarion and Cortland for 152 million bucks. Again, that's all equity.

[A]

They don't use any leverage. And how have they created this perpetual capital vehicle is a pretty good story.

[B]

Tithing.

[A]

Tithing. What is tithing, Will?

[B]

I certainly don't do it. But it's. You donate 10% of your income to.

[A]

The church for good works and such. Tithing has created this absolute behemoth. And it's called Ensign Peak. Ensign Peak is the endowment for the Latter Day Saints Church. And I think it was insanely well run. It was $40 billion worth of AUM in 2012 and by 2019 that number had jumped to $100 billion.

[B]

Also consider there are some very wealthy Mormons. That's a lot of tithing. It's just so much money coming in as well. That's the part that's staggers. They have to put all this money to work. But there's no pressure because you don't have to worry about liquidity. They're not worrying about, well, gosh, my growth PE allocation hasn't returned capital.

[A]

I spoke to like a former Mormon guy and who knows who's connected to all the property reserve people. They truly believe that they're building for the second coming. So their entire real estate strategy is informed by that very, very long term approach mindset.

[B]

Honestly, it's really good approach for real estate.

[A]

And they're good, dude. They have everything down to a science. So their floor plans are really templated. If you look at the Mormon buildings, they're all like, they're all set up really nicely. The Mormon real estate unit is called Property Reserve and it's run by a guy called Ashley Powell. What do we know of Ashley?

[B]

Ashley's a real guy.

[A]

He's a real guy.

[B]

Yeah. So he was at Deutsche Bank. Bento Greenoff.

[A]

But you know what I love about him? I went on his LinkedIn today. His LinkedIn says nothing about those. It's all about the church. There's no mention of those two pedigreed positions.

[B]

I mean, this guy went to BYU and then came back to be director of acquisitions in 2017. Came.

[A]

Do you see what he studied? Almost like he was setting himself up for this from the very beginning.

[B]

Construction management.

[A]

Construction. What kind of degree is construction management?

[B]

It's a very useful one for real estate, to be quite honest. So this guy's a, you know, he's a developer. I mean he's again, you own all this land, like, and they're building stuff for the long term. Like you don't want just, you know, a spreadsheet monkey who can, you know, juice an IRR or what have you. You're really building stuff over like, long term. Like we talk about master plans, we've talked about Starwood buying one that took, you know, we're like, oh, it's going to take 10 years, this is going to take 100 years. How long is it going to build on a million acres of farmland?

[A]

Need a little bit of divine patience, I guess.

[B]

Yeah. And I mean, They've got a 200 person team. Wow. At property reserve. I mean that's like pretty serious.

[A]

And you know what's interesting? It's like people aren't just, they aren't blowing smoke. Like I've talked to ex Mormons and current Mormons about this. To a man, they've all said like, these guys know what they're doing when they're building. You ever done deals with the Mormons?

[B]

Well, I have not done deals with the Mormons. I've done deals with other religious institutions who do not know what they were doing, much to my benefit. There's a whole sect of like Mormon investing and Mormon returns, both in private equity and business that have been very, very successful. One of the reasons why Real Housewives of Salt Lake City is such a phenomenon is because everyone's incredibly wealthy on there, except for the aforementioned Jen Cha, who is in jail.

[A]

I hold myself to a high standard. If you don't want the stained standards, go away.

[B]

It's this whole ethic. We talked about it previously with the Patels. In the hotel industry, it's just not just money making, but just like as you said, hard work, success, craftsmanship, doing things by hand, doing it the hard way.

[A]

And I think sales is kind of woven into the DNA. Right. Because you start as a missionary, you go to these foreign lands and you're preaching the good book and you understand what rejection means. You understand how to close.

[B]

Coffee's for closers only.

[A]

You think I'm fucking with you, right? And then it translates. These are the kind of groups that there's so much going on behind the scenes, beneath the surface, what have you. I think we only found out how big Ensign Peak was because of a whistleblower who went to one of the big papers in, in Utah. But my God, they're probably got some. I don't know if they JV with anyone, if they're quiet backers of anyone.

[B]

There's probably a lot more, I think so. And. But having the size and the scale that they do, they have a very real guy as a CEO. They have 200 investment professionals, or who knows how they're split between back office.

[A]

Front office, back office, front office. All roads lead to God. Well.

[B]

What'S interesting too is I just again looking at Property Reserves, like mission statement. You know, everyone, we've all read a thousand of these. It's like we work for our investors. We strive to achieve risk adjusted returns based on our economic analysis.

[A]

Some people go really far and they say stuff like the Roman Empire. And so I read you a couple of those too. Those are amazing.

[B]

This is what Property Reserve's mission statement is. As caretakers of sacred funds, we invest in responsible, reliable and revenue generating properties to support the church's mission with a focus on creating sustainable cash flow. We grow the real estate investment reserves of the church to the acquisition, build, to hold, development and management of domestic international properties. And they really mean it, and they mean every word.

[A]

We know that the Mormon Church doesn't really mess with debt, but do you think they'll ever get into bitcoin?

[B]

I don't think I can see the Mormons and the Scientologists getting together and letting Grant Cardone add in Bitcoin to these real estate deals. You're thinking small, bro. You're thinking small.

[A]

That's it for the Vermode podcast this week. We'll be back next week with more cre Insider goodness.

[B]

Write us a review on Apple or Spotify. Tell people about us, the zeal of an LDS Church elder.

[A]

Absolutely. Preach this podcast to everyone in your life and we'll see you back here next week. Ciao.

[B]

Sam.