EP#87 David Oelfke | Preferred Equity, Debt & Anything But Common Equity

Summary

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Podcast Summary: The Rent Roll with Jay Parsons

Episode 87: David Oelfke | Preferred Equity, Debt & Anything But Common Equity
Date: June 4, 2026
Guest: David Oelfke, Co-Founder of Marble Capital

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Episode Overview

This episode dives into the ongoing dynamics of capital in multifamily housing—covering why investment is shifting away from common equity toward debt and preferred equity. Host Jay Parsons explores transaction volumes, capital market trends, and debt origination data before a thorough, insightful interview with industry veteran David Oelfke (Marble Capital). David shares his career journey, the case for preferred equity, lessons from past cycles, and his instrumental role in founding Apartment Life.

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Key Discussion Points and Insights

1. Multifamily Capital Markets: The Current State

• Capital Preference: There’s a notable shift in institutional capital away from common equity toward senior debt, mezzanine debt, and especially preferred equity, due to a lower risk profile (00:02–03:45).
  • “Unless you’ve got a real gem with a great story, a great basis, distressed seller…It’s tough raising equity today again, not because capital doesn’t like multifamily, but because so much capital has been shifting down the capital stack.” — Jay Parsons (02:18)
• Market Inflection: Host notes we're likely nearing a market inflection, with increased lender competition potentially driving some institutional capital back into equity if yields decline further (03:10–03:45).

2. Transaction & Debt Market Data

• Sales Volumes: Transaction volumes, though steadily recovering from their 2024 trough, remain constrained by higher rates and softer rents. Still, Q1 2026 sales exceeded Q1 2025, and the trend is positive (08:00–09:15).
• Debt Origination: Q1 2026 saw $93B in multifamily loan originations (up 46% YoY)—the second highest Q1 on record. Lending competition is intense, with many debt funds and banks ramping up activity (09:30–11:00).
  • “Debt funds have almost caught up with banks in terms of total trailing 12 month loan origination volumes, which is kind of wild…” — Jay Parsons (10:40)
• Implications: While debt is readily available, yields are compressing. Thus, more capital might chase higher returns in equity as the market stabilizes (11:20–11:55).

3. Preferred Equity: Filling the Capital Stack Gap

• Growing Need: With senior lenders capping loan-to-cost, preferred equity is increasingly used to bridge gaps between senior debt and limited partner equity (04:20–05:10).
  • Preferred equity generally sits above common equity but below mezzanine debt, offering risk-adjusted returns and structural protection.
• Marble Capital’s Edge: Guest David Oelfke recognized this niche before it became crowded and has built a business around providing preferred equity in new construction deals (04:55–06:00).

4. Headlines and Industry News

(Timestamps refer to news section: 12:30–17:30)

• Major Transactions:
  • New Mountain Capital to acquire Asset Living, the #2 apartment manager in the U.S. ($2B+ deal, 12:45).
  • Berkshire Hathaway acquires Taylor Morrison for $8.5B, intending to retain its Build-to-Rent (BTR) division (14:00).
• Policy & Editorials:
  • New York Times Editorial Board openly opposes rent control, advocating for increasing housing supply as the key to affordability (15:40).
    • “Rent control might sound like a solution, but it would discourage construction and renovations…The way to bring down housing costs is to increase housing supply.” — NYT Editorial Board, read by Jay Parsons (15:50)
  • Grapevine, TX, controversially rejects a mixed-use multifamily project, highlighting ongoing resistance to apartment construction (17:00–17:45).

5. Interview: David Oelfke on Brokerage, Preferred Equity, and Impact

(Timestamps: 21:59–59:04)

Career Path & Launching ARA (Apartment Realty Advisors)

• Entered industry in 1985, initially landed in multifamily almost by accident due to market disruption (S&L crisis).
• Helped co-found ARA in 1997—grew it into a major brokerage, merging boutique local shops to build a national footprint.
  • “We had this national footprint, but we all owned our own businesses. So it was, you know, crazy great.” — David Oelfke (27:15)
• Culture of trust, doing the right thing, and excellence cited as key differentiators (30:30–32:32).

Transition to Preferred Equity

• After selling ARA to Newmark (2014), considered acquisitions and development but found preferred equity aligned better with his skillset and risk appetite (33:24–36:31).
• Structure: Preferred equity is functionally similar to mezzanine debt but without a lien, and often used in new development.
  • “Preferred equity is structured to look like mezzanine financing, but it doesn’t have a lien.” — David Oelfke (36:41)

Market Cycles: Lessons and Current Trends

• Identifies three major downturns impacting multifamily: S&L crisis (1986–95), GFC (2008–09), and current multi-year post-COVID/interest rate shock.
  • Current cycle marked by prolonged high rates and slower recovery than previous downturns (38:14–42:41).

Marble Capital’s Investment Approach

• Focus: Only preferred equity in new, mostly garden-style suburban developments in high-growth Sunbelt and Mountain markets (43:30–47:05).
  • Looks for projects with solid sponsors, attractive cost basis, and practical unit mix (mid-size, mix of 1BR/2BR).
• Underwrites hundreds of deals a year; selects only those with strong yield-on-cost and realistic rent projections.
  • “We’re not terribly wide, but we’re super deep.” — David Oelfke (43:36)

Current Investment Realities

• Deals work only if projected yield on cost is sufficient compared to cap rates; many deals don’t underwrite today without overly aggressive assumptions (47:56–53:16).

Apartment Life: Industry Impact

• David co-founded Apartment Life, a nonprofit placing resident care teams in communities to foster social connections and stability.
  • “It’s not just a ministry, it’s a business impact…when you’re able to build relationships, have people facilitating relationship building in your apartment community…that creates a stickier living experience.” — Jay Parsons (57:52)
  • Apartment Life now operates in 700+ properties; 95% of costs are paid by property owners (55:47–57:52).

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Notable Quotes & Memorable Moments

• On Capital Stack Dynamics:
  • “It’s the common equity that is more exposed to that risk, but also gets the upside. So if the values jump a lot, common equity gets the big payoff. If values fall a lot, common equity gets the most pain.” — Jay Parsons (03:10)
• On Industry Relationships:
  • “At the end of the day, it’s a relationship business…The groups that we really, really have done repeat business with are just really good people that do the right thing.” — David Oelfke (49:30)
• On Taking Risks:
  • “If you have an opportunity to do something like that [start your own company], it’s incredibly scary but incredibly rewarding.” — David Oelfke (29:22)
• On Social Impact:
  • “It’s very unique that people find something that’s way beyond themselves in the business they’re in.” — David Oelfke (53:43)

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Important Timestamps

• Multi-family market overview: 00:02–05:10
• Capital market & transaction data: 08:00–11:55
• Industry news headlines: 12:30–17:45
• Interview with David Oelfke: 21:59–59:04
  • Career journey: 22:10–33:24
  • Preferred equity explained: 36:31–37:39
  • Market cycles: 38:14–42:41
  • Marble Capital’s investment criteria: 43:30–47:05
  • Underwriting & deal selection: 47:56–53:16
  • Apartment Life: 53:43–59:04

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Tone & Language

The episode’s tone is collegial, energetic, and industry-savvy, mixing granular market data with personal and professional storytelling. Jay Parsons keeps the conversation accessible yet deep for listeners from all corners of rental housing, and David Oelfke’s insights are candid, humble, and encouraging for both veterans and newcomers.

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Summary Takeaways

• Capital is abundant in debt and preferred equity but equity remains a tough raise unless the deal is exceptional.
• Competition is heating up among lenders and debt funds, compressing yields and potentially hinting at a coming swing back into equity investing.
• Preferred equity fills an essential gap in the financing stack, especially in new sunbelt and mountain region developments.
• Strong industry relationships, integrity, and deep market knowledge are cited as essential to sustained success.
• Social impact and resident engagement programs like Apartment Life can drive bottom-line success while generating broader community benefits.

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For anyone wanting a comprehensive, insightful look at today’s multifamily capital landscape and practical lessons from a multi-decade career, this episode delivers both data-driven analysis and human stories.

Transcript

[A]

Welcome. It's the Rent Roll your podcast on all things rental housing, apartments, San Antonio rentals and Build to Rent coming to you this week from beautiful Santa Fe, New Mexico. For those of you watching the video, you can see a very Santa Fe hotel backdrop. And that's where I am. But today's topic is one that's been stubbornly sticky in multifamily, and that's this. Capital loves multifamily. If that opportunity is debt, mez debt, preferred equity, really anything other than common equity, now, you can still raise equity, but it's a grind and many, many of you know that all too well. So unless you've got a real gem with a great story, a great basis, distressed seller, I mean, something that's really helps build a story around it. It's tough raising equity today again, not because capital is like multifamily, but because so much capital has been shifting down the capital stack to senior debt, to mes debt, to preferred equity. And all this means that those, what that means is these tranches, the senior debt, the mez debt, preferred equity, they have a lower risk profile. Lower risk, lower, lower reward. And so in many cases a deal, what that means, for those of you who don't know this, maybe more on the operations side, you don't follow this as closely. What that means is that a deal may need to lose 20% of value before those tranches of the capital stack are negatively impacted by it. So it's the common equity that is more exposed to that risk, but also gets the upside. So if the values jump a lot, common equity gets the big payoff. If values fall a lot, common equity gets the most pain. So after a choppy few years with values declining due to the double whammy of higher interest rates, meaning a higher cost of debt, just like buying a house, a higher cost of your mortgage combined with the softer rents we've seen these last few years, all the supply that's hit the market, it's understandable why capital likes those lower risk, lower reward categories. But it does start to feel like we're maybe at an inflection point, or at least maybe nearing an inflection appointment. That's a better way to say it, nearing an eventual inflection point. Obviously, these things are always cyclical, but one of the things we'll talk about today is that there are a growing number of lenders actively competing in the market trying to deploy debt capital. And we're going to share the latest numbers on multifamily loan origination. So far, this year. And it's a big number. It's a big number. But with more competition comes reduced yields, reduced debt yields. And so you think eventually it's going to push some institutional capital back in to equity, particularly as supply drops off, rents start to stabilize. So, so, so that's what's happening on the desk. I will get into some of those numbers. And then there's that middle tranche, the preferred equity. There's been a growing need for preferred equity. Excuse me, preferred equity to help fill the hole in the capital stack. Okay. When you hear that term being used, it's basically saying that, you know, lenders will go up to a certain percentage. You're only able to raise a certain amount of LP equity of common equity. And then from there you got to fill that gap between what your senior debt is doing and what your equity is doing. That's where preferred equity comes into play. And so we're fortunate to be joined by a guy who knows this space very, very well, intimately, well, and runs a business focused on it, David Offke, the co founder of Marble Capital. That's gonna be a good conversation because this is a guy who saw an opportunity and preferred equity before it got really cool and trendy these past few years. Even when all the opportunity was on the common equity side, you know, David really focused on the preferred equity side. He saw a better opportunity there. So we'll hear some of his story. He's got a great story to tell about Marvel Capital, but also just more broadly, his career story is just a great one if you have not heard it. So if you don't do anything else in this podcast, just fast forward the interview with David. I'm not going to be offended if you do that. That's why we do these segments of the podcast. Hopefully there's something each week that's of interest to you, whether it's the interview or the news segment or the data, the charts, the trivia. Hopefully we give you something that you can take with you each week. And in this week again, the interview with David is going to be great. And David's got a incredible story. Starting his career in brokerage, helping build with, along with his partners, one of the biggest names in the multifamily brokerage business, ara before they sold it off to Newmark. And then David co founded Marble Capital and has built a niche there focused on preferred equity, particularly in new construction for their business. All right, before we dive into all this, let's give a quick shout out to our headline sponsors. First and foremost, a big thank you to jpi, a leading apartment developer. The stated purpose to transform building, enhance communities and improve lives. Check them [e-mail] Some of you saw them at the Big Housing Conference Affordable Housing Conference in Dallas this past week and you got to see some of that technology JPI has been using on display. Dusty and the the Robo Dog. Also big thank you to Madera Residential. Check them [e-mail] and thank you to Funnel, the AI and CRM platform that you could [e-mail] all right, so as always we kick it off with the section we call Here's a chart. This is when we get all into the data. So this segment is going to be presented by my friends at Authentic. If you're an owner, asset manager or developer running multifamily, here is the truth about leasing in 2026. A couple of ILS accounts and cross fingers will not get you to stabilization these the properties that are winning are running a tight ship across paid search and social retargeting, email and SMS nurture, all coordinated with one accountable team. Authentic built that system. They call it demand the door. That's one platform, one partner, one monthly number that scales to your velocity targets and pod listeners get 50% off setup fees for a limited time. Head to auth ff.comd2d to see how it works. All right, so ahead of our conversation with David today on preferred equity we're going to talk about the capital markets and really talk about transactions and about debt in particular. So where do things stand right now? Well first and foremost on the deal side we we continue to see it's kind of more of the same. It's a steady upward trend, steady up sales transaction I should say. Volumes are steadily ticking upward. Not a boom by any means whatsoever, but nor is it a drought. Sales volumes bottomed out in 2024. They've steadily picked up in 25. They steadily picking up more in 26. Q1 this year was more than Q1 last year and through year to date was more than last year. But it's still hard to make deals work obviously given the softer rents, higher interest rates, still trying to work through all that and that limits total transactions. Cap rates continue to be low to mid 5 depending on your data source and better located newer vintage deals back in the mid fours to upper fours in many cases. You know, obviously limited volumes of course. But those deals are happening particularly driven by longer term holders with patience to ride this out and conviction to play the long game with what they see as higher quality real estate. Okay, so let's talk about debt. And I'm not going spend a ton of time on this, but I think the key points are pretty simple to make here. But I want to share this great chart from Newmark on debt originations. And you can find this on Newmark's website and that they post a quarterly capital markets update. And there's a great chart that shows debt originations and it shows $93 billion in multifamily loan originations in Q1 of this year. Not only is that up, it's up a lot. It was the second highest Q1 on record, topped only by 2022. Of course, we all know what's going on that year and it was way above the $64 billion in Q1 of last year. So that's 46% growth year over year in multifamily loan originations. Newmark notes that borrowers benefited from narrowing loan spreads and improved confidence and fundamentals as construction slowed. Plus, they also track the number of firms actively deploying debt capital. And those numbers are growing now. They more than doubled from 2024 when the market bottomed out. And we've talked about it before in this podcast, and I'll repeat it here again, that lenders are competing, they're competing against, spreads are compressing. And that was my big takeaway from NMHC's annual meeting this year. Seemingly everyone is competing to deploy debt capital and that really shows up in the numbers so far here in 2026. And so as I mentioned earlier, eventually you think that's going to push more institutions toward equity as they chase better yields. And I think especially as the market starts to stabilize with lesser supply, assuming the economy holds up. So I think the yields on the debt side probably aren't where a lot of these funds expected them to be when they pushed into the debt space. But in the short term, obviously there is a benefit. The amount of debt capital out there has helped limit the damage to for apartment owners and limited the total number of distressed deals out there, which in turn protects values a good at least from further damage they've already, than they've already seen. Now, just to be clear, it's by no means saying that, you know, there's cheap, easy money out there. It's not like, you know, no one's saying it's, it's, you know, totally gone crazy or it's, it's, you know, obviously you don't have rates like you did in 21, but debt is certainly available Today, even at these elevated rates. So if you could afford it, it's there. And that's allowing owners to continue to hang on and potentially avoid those distressed sales. And we're going to see more of those obviously, but obviously not as much as maybe we would have thought a few years ago. All right, one more chart from Newmark. This one shows origination volumes by lender type and it's really interesting. Debt funds get all the attention these days for good reason. And they're certainly a big part of the story. They're doing more today than they did than they did in 2022. And a lot of that's just because there's more of these debt funds today than there were in 2022 and they're up a lot versus last year too. In fact, they're ramping up so much that debt funds, I mean this is kind of crazy for those of you with some history. I mean the debt funds have almost caught up with banks in terms of total trailing 12 month loan origination volumes, which is kind of wild because for most of history, even five years ago they did a fraction of what the banks did. And it's not like the banks are pulling back anymore by the way. Not. Not anymore. And that again, that was part of the story in, in 23 and 24. But that's not the story of today. They've been ramping up too, so. And so have the gsc. So Fannie and Freddie, so even the life life insurance companies are coming up a bit. The only category trending down is cmbs, which as many of you know, that's more of a small number niche category in the multifamily market. It's much bigger on the office, retail, industrial side. So lenders are clearly bullish on multi family. Again, debt is very available these days, particularly for higher quality assets. But again, I want to be very clear, this does not mean that lenders are doing crazy things by and large. I mean maybe somebody are. I'm not saying it's never happening, but that that's not the story overall. So don't let that me, don't let that seem like it's the message. It's not the message. Underwriting obviously still matters, but banks, the GSEs, the debt funds, they're very much in the game after pulling back in 23 and 24. So again, going forward, I know I'm being repetitive here, but I just want to put a bow on this. I think that again, a lot of that growth in the debt funds. I mentioned the debt funds doing more today than ever, catching up with the banks. A lot of that was being driven by institutions that have a debt fund arm or sorry, debt arm, and they've got an equity arm and they've been shifting more money onto the debt side at some point. Again, with improving fundamentals, reduced supply, increased competition on the debt side, you got to think that the pendulum starts to swing back toward equity. Now when exactly when exactly that happens, I don't know. But when it does, that's going to help spur more deal flow, more transactions and not just refinancing recaps. So refinancing and recaps. Excuse me. So we'll see. All right, next up, it's time for some rental housing trivia.

[B]

Foreign.

[A]

Is presented by Foxen, which provides a suite of value add solutions designed to improve operations compliance and property performance, rethink renters insurance compliance, rent reporting and pet management with Foxen. Check them [e-mail] all right, today's question is which market saw the largest reduction in apartment sales volumes over the last year according to MSCI and Newmark? Was it Boston, Denver, Los Angeles, Phoenix or Tampa? So give that a guess and we'll revisit that question here in a bit. But next, it's time for in the News. All right, in the News, when you get we review headlines impacting rental housing of the past week. This segment is sponsored by Telecloud. If increasing noi is a priority, your telecom contracts may be one of the easiest opportunities in your portfolio. Telecloud helps multifamily asset managers consolidate Internet voice and dial tone across properties. The average cost reduction is 40% and it's often higher than that. So to make it easy, they'll start with a free telecom audit to show you exactly where savings exist before you make a move. Learn more@telecloud multisite.com all right, so first headline comes from Reuters. It says new Mountain to buy asset living in 2 billion plus dollar deal, sources say. All right, another huge transaction in apartment world. Asset Living is the second largest apartment property manager in the United States with according to NMAC list, almost 450,000 units. And this, this looks like a PE to PE deal, private equity to private equity deal. For those who are curious about such things, I believe that New Martin Capital, sorry, New Mountain Capital, excuse me, is new to the apartment space. So it's not consolidation, just changing of ownership from one, from, from the current owner of Asset Living to another. The the current owner being Roark Capital. Not a ton of details that are public yet. But one interesting nugget I'll read from this article is this. It says New Mountain has agreed to acquire Asset Living in partnership with CEO Ryan McGrath who will remain involved in the business. One of the sources said the deal includes the company's owned real estate portfolio and proprietary technology suite. So that is very interesting and great to see Ryan sticking with it. All right, so who is New Mountain again? Many, many of us in the apartment side and SFR BTR side might not know that name, but they're, they're a big name elsewhere. New York based investment firm with about 80, I'm sorry, 60 billion in assets under management according to this Reuters article. They appear to do a variety of things, not just real estate, but they have been active in retail, office, industrial and even alternatives like car washes and wastewater treatment facilities. So welcome to the multifamily business New Mountain Capital. And Congrats to Ryan McGrath as well. All right, next headline, another transaction. This, this, this story comes from Multifamily Dio. It says Berkshire Hathaway acquires BTR player Taylor Morrison for $8.5 billion. The Scottsdale, Arizona based firm builds rentals through its Yardley brand which received a three billion dollar injection last year. And then it goes on to say, though more known as a single family heavyweight, Taylor Morrison is also a major player in the rental housing industry with its Yardley brand. Currently the firm has 5,411 units across 26 communities tracked by John Burns Research and Consulting. Okay, so I kind of glossed over this with the reading headlines, but obviously two Taylor Morrison is predominantly a Singer family home builder. They do have a BTR arm. So obviously this is not an $8.5 billion deal just for a BTR developer. But BTR is a growing plays a growing role at Taylor Morrison and the early reports suggest that Berkshire Hathaway is going to retain the BTR construction business. So big congrats to the Taylor Morrison team and the Yardley team as well. All right, next headline comes from the New York Times and it's, it's from the editorial board, it's the, the opinion pages and it's the op ed from the entire editorial board. Not just a bylined article here. This is from the editorial board and it says how to stop the affluent from rigging the housing market. And if you dig into this, there's a great paragraph I want to read to you. I shared this on social media this week. It says rent control might sound like a solution, but it would discourage construction and renovations Artificially low rents make it harder for developers to recoup the cost of building. Rent control has not solved the housing problems in New York City, and it will not solve them in Massachusetts, where rent control is being proposed. The national pattern is clear. The way to bring down housing costs is to increase housing supply. And I read this and I thought, wow. I mean, it's, it feels like a pivotal moment when even the New York Times editorial board recognizes what the science and the data make obvious, that rent control backfires in the very people it's intended to protect. So I shared this online. I'll say here again, it's a really important, I think everybody knows this, that rent control, this is not one of those red versus blue issues, Republicans versus Democrat. This is populism versus pragmatism. It's pro science versus anti science. It's reality versus conspiracy theory. I even think it's empathy for renters versus just pure rage against business. So it's great to see the New York Times editorial board joining the pro science wagon here. All right, and one more really quick headline, just because this one was particularly ridiculous. It says, grapevine denies Trammel Crow mixed use project over multi family concerns. For the second time in two years, Grapevine denied plans for a mixed use project that would add apartments next to the city's, next to the city's mall. So, so if you don't know Grapevine, it's a suburb of Dallas Fort Worth, close to an airport, home to major resorts like the Gaylord Great Wolf Lodge. Got a major mall, a lake, a lot of retail, hospitality type jobs, serving visitors that spent a lot of money in Grapevine. And so I saw this headline, I thought, hey, you know, Grapevine, you guys fancy yourselves and you are a tourist destination and you say tourists are welcome, but then you say tourism workers, you're not welcome. That's effectively what you're saying. Because this article goes on to say that council members actually shot this down because they said we don't need more apartments in Grapevine. I mean, that was basically the quote from one of the council members who voted against this. And how crazy idiotic is that? I mean, I don't know how else to say we don't know what we're talking about than to make a dumb comment like that. And they say we want single family homes, not apartments. You need both. And this is right by a mall, major thoroughfare, not a great place. Single houses build the apartments. So I think it's particularly heartless and hypocritical to say, hey, we're good. We want tourists spending our money here, but we don't need any more hospitality workers living here. Come on, Grapevine. Do better. All right. Well, now let's get back to this week's rental housing trivia question. The question was which market saw the largest reduction in apartment sales volumes of the last year according to MSCI and Newmark. Was it Boston, Denver, Los Angeles, Phoenix or Tampa? Now, again, overall, we were actually up nationally, but we did have some markets that were down, the biggest of which was Denver, down 45% year over year, according to Newmark's analysis of MSCI data. Now, obviously there's going to be some noise with any year of year data point, any point in time with the year of year change that could be shaped by, you know, just large transactions in one period that aren't reflected the next. But Denver for sure has had its challenges as well, between high supply putting downward pressure on rents, plus an increasingly hostile regulatory environment in Denver as well and some sluggish employment numbers. Now, I'm not hating on Denver, still a beautiful place. Love visiting the Denver area, but the policy environment is the big factor to watch here for apartment owners and operators and it certainly lost some favor among capital over these last few years. Next up, it's time for today's interview sponsored by funnel, the AI and CRM software trusted by four of the six major REITs and many more leading operators like BH and Cortland. To learn how Funnel can help your property centralize operations and automate everyday tasks, visit funnelleleasing.com all right, our guest today is my friend David Offke. He's had quite a career starting off as an apartment broker, partnering with some friends start their own brokerage group, ARA Apartment Realty Advisors. We which many of you know was a huge name in the business for being sold off to Newmark. And and one thing to talk to David about is why or what do you what how he kind of went through, okay, we sold off this company. What what are we going to do next? And how he ended up co founding Marble Capital and focusing on preferred equity and the niche space that is. And so I've gotten to go know David over the years and I'm very excited to have him here on the podcast. So let's jump in.

[B]

Foreign.

[A]

All right, welcome to the interview portion of today's podcast and I am absolutely honored to welcome in David Aufke, the co founder of Marble Capital. So David, thank you so much for being with us today.

[B]

Thanks Jay. I'm really excited to Be here with you and have really enjoyed your, your podcast. I, I, it's funny because we're such, you know, housing nerds that we like to hear podcast about our industry, which I don't know if there are any other, so appreciate what you're doing here.

[A]

Well, thankfully there's a few others. So somebody other than you and my mom are listening to this. Thankfully, so exactly. So David, you know, I always like to ask people this question of just how you got into multifamily, especially you know, since you, I think joined in the 80s, like multifamily wasn't as, wasn't the attractive career that it might be today for people coming out of college. So tell us, how'd you get into the business?

[B]

Yeah, no, no question. So I got out of University of Texas in 1985 and you know, when I was in college, I took a real estate class. They told me to go get an HP12C calculator, which don't even know what that is. And as I look back, it was really the only class I really enjoyed. And so it kind of directed me towards doing something in the commercial real estate business and thought I'd probably do something in development. But in 1985, 86, Texas was terribly disrupted because of the SNL crisis. And so I worked for a small development company right out of college and they went bankrupt six months after I started. And so that was kind of the beginning of my career. Then In May of 1986, I got a job with CB Commercial and I was so excited. My friend John Thompson had gotten a job there before I did. And shortly after that I met my to be wife, Roseanne. We'd been married 38 years and then the first time we went out on a date, I just gotten this job with CB Commercial and she goes, well, I got offered a job with CB Commercial but I turned them down. Like no way. I was so proud. And you know, she just didn't, couldn't do it. But so I was in a very entry level position there for a year or so. And to your point, you know, they were really good back then of kind of having the different food groups, whether it was office or industrial, which was the top two retail. And then there was a multi family division that you know, was kind of the four letter word because in the late 80s, you know, multi was super non institutional. It was really driven mom and pop. And so either they saw a great opportunity for me or they just stuck me there because they didn't care one of the two. But you Know, it was incredible the, the growth that has occurred since I started, you know, in the investment sales space and really in 1987 when I got out there. So it wasn't something that I did a bunch of research on and said, this is going to be a great growth market for me. It just kind of happened organically. And as, as I look back, I'm very thankful for that.

[A]

Yeah. And one thing I'm most eager to ask you about is that, you know, four years out of college, I think it was wrong. And two years after you joined cb, you ended up being one of the, you know, co founding with some of your friends, ara, which of course became one of the big names in the multifamily brokerage business, now part of Newmark. And so I think about that, it's like, is that it seems crazy to me that somebody four years out of school starts a brokerage company, ends up being one of the biggest in the business. Is it? Do you ever kind of look back at that and saying like, like just how crazy that must have been to pull that off, starting a brokerage business in your 20s?

[B]

Well, I was a little later that I start. We started Ara in 96. Well, 97. January 1st, 1997.

[A]

Okay, so you're. Yeah, so the 90s. Sorry, this is. You've been a little bit of experience then.

[B]

Yeah, a little bit later than that. But, you know, CB was awesome and they were, you know, had had a lot of great friends, you know, that worked there and still to today. But there were a couple of reasons why we wanted to go do our own thing. And you know, one was that at the time when it started becoming more institutional, the company really wasn't in a position to help us as brokers to go out and source, you know, business that was more institutional. That was kind of number one. And number two is that we had some friends that we were selling deals to and we wanted to invest with them selectively. And it really was kind of a no, no for the company. And so we kind of went round and around and we decided, well, let's just go do our own thing. So I had a partner, Matt Rotan, who we're still partners today. And I worked together at CB and then added a friend of mine actually from high school, which is funny, Cliff McDaniel. And Cliff was in the multifamily investment sales business. And so the three of us started what was then called Southwest Residential Partners in January of 97. And about a year later, we got introduced to three other companies that were similar kind of boutique investment sales group. One out of Boca Raton, Florida, one out of Atlanta, and then another out of Charlotte, North Carolina. And so we kind of connected. We became good friends. And this is, like I said, in the late 90s, and about maybe a couple years later, that's when we kind of launched ARA collectively. And at that time, Brian o' Boyle from Dallas joined us, and then a couple of guys from Denver who were with us at CB back then. And so there were technically six. Six of us, six companies that started ara. And it was. It was kind of. Kind of the best of all worlds in that we had a. Ended up creating, I think 25 offices is what we ended up with when we sold to Newmark. But we had this national footprint, but we all owned our own businesses. So it was, you know, crazy great. And so I went from you know, CB to doing this, and then when we sold To Newmark in 2014, we were second only to CB as far as transaction volume.

[A]

So amazing.

[B]

You know, just had some great friends. And it's like we didn't anticipate that we would grow as much as we did. And so we got to a point to where really you needed kind of one person in charge, and there wasn't really one person in charge. And so, you know, to my, my. I tip my hat to. To the Newmar guys for figuring out how to, you know, pull a bunch of, you know, cats together to go under the company, because we were all kind of doing our own thing. So, you know, super fun time. I look back at that experience and, you know, this, this. The amount of transactions that we were able to do, and we had a great culture. You know, we referred business back and forth without any expectation of anything in return. And, you know, we thought that was so great. But we would go to a client, say, going to go, and our partners are going to help us find the right buyer or whatever, and they're like, well, why would they do that if they're not going to make any money? I'm like, because we're friends, you know, we're partners. And so we kind of had to change that, you know, a little bit. But, you know, it was a, it was a. It was a great experience. And I was super blessed to be there.

[A]

Absolutely. Well, I was off by a few years, but still really remarkable to do that with, you know, 10 or so years experience. And then launch. What became the.

[B]

And the crazy part was my dad worked for dow chemical for 37 years. He was a chemical engineer down in Lake Jackson, just south of Houston. You know, not one entrepreneurial bone in his body. And so I had never seen anybody start a company. I didn't know anything about it. And so my partner, Matt Rotan's dad was very entrepreneurial and started numerous things. And so he had no fear and I had 100% fear of going out and doing it. You, you know, doing your own thing. And so I, I kind of encourage young people. If you have an opportunity to do something like that, it's, it's incredibly scary but incredibly rewarding, you know, to, to go and, and go out and, and do something on your own. So. Oh yeah, awesome.

[A]

Yeah, I can, I can certainly relate to that. So, Dave, one more question on that then. As you look back, I'm sure a lot of people listening, especially, you know, some, some people in their 20s and 30s may aspire to do something like that. Like what, what was the. You probably talked about this for ages, but just at a high level, like, what did you all do to make it work so well and to grow so fast? Looking back, like, what was the secret to that success?

[B]

You know, I think that's a great question. There's a lot of things, but first and foremost, you know, we, A lot of it was not our own. We were just kind of blessed to be in a space that had incredible growth. And then secondly, I think, you know, we were, we were super intent on doing the right thing. And you know, the, the, the investment sales business, the brokerage business can be very muddy, if you will, because there's money and people are trying to grab it and you know, how do you chop things up? And we really tried to do the right thing and, and I think reputationally, you know, that helped us. And then I can last thing is just, you know, just to be best in class, to do things with excellence and really try to be cutting edge. As far as, you know, back in the day, nobody put together these fancy OMs, you know, and so on trying to. It was all just kind of back the napkin stuff. And so when the business really started becoming more institutional, you know, trying to, you know, just provide not just great materials but great service and you know, a marketing process back in the day was not anything what we see today, which is, you know, super common. So it was a, it's a really interesting transition from, you know, really a very, you know, non, as I mentioned, say this again, non institutional type business to something that was. It's much more institutional and the expectations continue to grow and grow and grow. And so I think, you know, that's really, as I look back at that's probably what was it. And the last thing I would say is just I had great partners, I had great people around me and, you know, that were much better at doing things than I was. And so in many instances. So it was, it was super special to have that. And today, even at Marble Capital, a lot of the, my team at ara, that when we work together, are working together at Marble.

[A]

That's great. So then you sold Ara in 2014, right?

[B]

We did. And we had five year kind of employment contracts. And so by the time we spent probably two years trying to, you know, effectuate the sale of ara, and when I got through, I'm like, oh my gosh, I got five more years. I don't think I could do this. I was super burned out just from, you know, being in the space that long. And so, you know, trying to figure out what the next step was. You know, honestly I, you know, our main deal is not to go compete and the last thing I wanted to do is go back in the investment sales space. So we thought about doing, you know, acquisitions, which was a pretty logical next step if you want to keep going, or development, which is a little less because, you know, there's more risk involved in the development process.

[A]

Sure.

[B]

We went and bought five deals. I say we, me, Matt and some others, and mainly in Houston. And we developed three deals with a partner and was thinking this is going to be great. And then this, you know, opportunity. I'm sure we'll talk about that. You know, came up in late 15, 2016 with, to do these preferred equity investments.

[A]

Yeah, so let's get into that. So after that exit, I'm sure you had plenty of options. I mean, like you said, development, you could have acquisitions, you could have rolled it back again. I mean, but you chose a particular niche and I think that's interesting because you had exposure to everything in your world in investment sales. So you must have seen something here with preferred equity as opposed to start another GP like most entrepreneurs do in multifamily. So tell us why you went that route and what did you see in the market that made you realize, hey, this is the better opportunity for me.

[B]

Yeah, so, so as I mentioned, we, we, we after kind of we had sold ara, we went and purchased five multi family assets, predominantly in Houston. You know, that was kind of our, our DNA knowing value and so forth. And so we felt like that could be a great thing to do going forward. The reality is though, we needed some diversification in other markets. And I really didn't want to go get on a plane and go learn, you know, Atlanta and Tampa and Denver, those markets. So we were kind of landlocked a little bit with, with finding deals and then this. The operations of multifamily are very intense. And so when you come out of the brokerage business, which is, you know, start to finish a transaction's four to six months and you're move on to the next deal, it's great for ADD people, which is kind of fits my, my skill set. And so when you're either doing acquisitions or development, they just take a lot longer. And my mindset and my, my DNA was not really kind of geared up for that. And what I really liked about when we saw this opportunity to go raise capital and make these preferred equity investments is that, you know, as a capital allocator, you know, it's, it's a shorter cycle. Now, granted, it takes some time for the, for the preferred equity to, to get realized or monetized, if you will, but start to finish it kind of fit my skill set a lot better. And being able to use the relationships that we had, we had accumulated over the years, not just with our ARA partners, but with other owners and developers, you know, mortgage brokers, management companies, you name it, it just gave us a real nice platform to go find out or get information relatively quickly that we felt like was unique. And so, so I guess the bottom line is I tried a couple of things and then when we saw this opportunity to go raise our first fund to go make these preferred equity investments, which just felt like it was a better skill set personally, but also if it was going to have some sustainability to it and the demand was going to continue, then it could be a great business to get involved with.

[A]

So. And before I move on, I just hit me that some folks listening may not be familiar with preferred equity. So just a high level. Hugh, explain what preferred equity is for sure.

[B]

So it's basically mezzanine financing, and we don't do mezzanine financing because, you know, the vast majority of our preferred equity is on new development. And so construction lenders really do not allow mezzanine financing for the most part. So preferred equity is structured to look like mezzanine financing, but it doesn't have a lien. And so, you know, your, your ability to get, to get monetized out or paid off is based on, you know, the sponsor coming to you after they have built and they've leased the property and they go to sell it or they refinance and pay us off. We do have, you know, we do have rights to step in and take over if there's a default by the developer. And, and we negotiate upfront the right to become the borrower with the lender. So we do have rights involved in the prep equity, but it doesn't have a lien, which is the main difference.

[A]

Okay, well, thank you for that breakdown. And then as we've get into this, I had a couple cycles in this new in the current role. I just want to also kind of zoom out a little bit. I mean, you've seen every cycle since the mid-80s in multifamily, have had quite a few of them roller coasters and good and bad times. So I, I am very curious to ask you this. Like, what feels different about today's environment compared to the past downturns or recoveries? And then related to that, you know, where do you see the biggest opportunities and risks in the, in the current cycle?

[B]

Yeah, it's really interesting. You know, I, I would, I would describe these past 440 years that I've been in the space. There have been three bumps, significant bumps, and three major bumps in, in, in our business. And the first and foremost was when I got in the business in the SNL crisis.

[A]

Yeah.

[B]

And so, you know, that big bump that would be considered a very large bump, probably the worst time. I mean, today's bad, but that was probably worse because it lasted 10 years. You know, in essence, it started in 1986 and really didn't, you know, get completely resolved until 95. And, you know, I think the common theme of these large bumps is the lack of liquidity in the market. And so that was really the first one that I experienced. The second was the GFC and the great financial crisis, you know, was a lot more, you know, you know, familiar to most people because it didn't happen that long ago. But the difference was it was really bad for a real short period of time. And so, you know, there was a moment in time in 2009 that there was virtually no liquidity in the marketplace. So if somebody wanted to sell something, you know, the group that could come up with capital made an incredible, you know, buy, but by the middle of 2010, you know, things that really come back to normal. And so, you know, the government did a lot of that and pumping capital into the system, but it was a pretty significant bump. And then the third, I would say, is this time we're in right now, which I guess you would refer to as the post Covid inflation slash interest rate hike. And you know, we're four years into this really and it's probably second only to the SNL crisis in my opinion. And then as you look back, there are other smaller bumps. You know, one was like in 1998 when there was this Russian ruble crisis, you know, when they devalued, the ruble got devalued and you know, everything went kind of up. And if you had a deal under contract, it probably fell out. But that lasted maybe six months or so and then you know, had a couple years later when you had the dot com bust kind of coupled with 9, 11. And if you had something in contract, you know, you had a pretty good chance that people pulled back because there was uncertainty in the market. And then obviously you had Covid, you know, back in 2020. So those were, those were bumps but they were very short lived. And I think the challenge that we're in right now is that this interest rate hike has lasted, you know, a lot longer than anybody expected. I mean, I promise you if you talk to people two or three years ago, they would say, hey, interest rates are going to come in. Yeah, we're going to be back to the normal cap rates. Just hold on, you know, it always gets better and blah, blah, blah. And we sit today in, you know, spring of 2026 and I mean values were higher last year than this year, which is pretty stunning. So I think that's the biggest challenge. I mean we all in the multifamily space believe that the, the metrics going forward with respect to supply and demand are super favorable. And you know, we should, in the Next, you know, 12 to 24 months look up and things should be more stabilized from an occupancy standpoint. We see hopefully have concessions, pull back. I don't think many people are thinking that interest rates are going down. I mean I think we're kind of in this new norm where you know, the 10 year treasury is going to range between 4 and 4.5%. Cap rates generally speaking, average about 100 basis points over the 10 year Treasury. And so if that's the case, I think investors and developers can make decisions if there's not this crazy volatility. When the 10 year moves 20 basis points in a day, it's like, how do you make decisions? So I think that's kind of good news, bad news. And I think we have seen kind of interest rates stabilized to some extent. You know, we just need fundamentals to really get better in order to see some rent Growth to get buyers and especially investors, you know, to kind of get more aggressive on buying deals.

[A]

Absolutely. No, those are all excellent points. That kind of leads me to the next question, which is that, you know, I think what it feels like to me, kind of piggybacking from your comment is that it's certainly not getting a lot better yet, but we're starting to, it's the sense is that maybe the worst is behind us. We're seeing some green shoots at least of improvement. Maybe it's not lower rates, but at least we're start. We know supply is going down. We're seeing some early signs of occupancy and rent improvement in certain spots. And we're seeing some signs that maybe the, the higher quality institutional assets and good markets, the A B assets seem to be stabilizing in values. And so that kind of leads me to okay, well what works for Marble Capital right now? Like what types? What's the, what's the ideal investment that checks the boxes for, for you guys?

[B]

So we're, we've kind of, we've kind of stayed to our knitting, which is, I'll tell people, we're not terribly wide but we're super deep, you know.

[A]

Yeah.

[B]

So these preferred equity investments that we make, and I didn't really go into it but, but what happened in 2015, these Basel III banking regulations were implemented as a result of the two gfc. And so literally overnight, you know, banks used to finance 80 to 85% of cost. And then in, you know, kind of 2016 they pulled back to 60 to 65% of cost. And so, you know, we just saw this opportunity for maybe not the, you know, the, the national developers, the you know, Alliance, Trmel, Crow, Graystar, these groups that use more institutional capital for JV equity. But there are a lot of great developers that are going to do one to three developments a year and they're raising high net worth or family office capital and they could raise 20% but raising 40 super heavy. So we saw this opportunity to come in and take this tranche of the capital stack from 60 to 80% of the cost and get a kind of rate around 14% that you know, banks used to charge, you know, 4 or 5% for. We thought that was super outpriced relative to the risk. And so we've made 230 some odd preferred equity investments in development deals in the past 10 years. You know, we've monetized about 70 of them. And so we just feel like this space, you know, given you Know, the right sponsor and the right market, the right product, you know, is really attractive. And obviously, you know, we've raised about, I think we've got three and a half billion or so under management. And so it's, it's been a unique, it's been a unique story that's differentiated and there are people that get in the space and they wait till things get better than they go, focus more on JV Equity. But we've really stayed to the knitting and that we think this, in good times it works well. And even in not so good times, it works. It works well. So to answer your question directly, our typical investment is going from, call it 60% of the capital stack to 80% of the capital stack. We invest primarily in 3 and 4 story garden, surface park apartments, suburban primary markets. You know, we like, you know, properties that are 250 to 350 units. We're not huge fans of properties over 350 units. We like them just kind of right down the fairway. I mean, I know some groups build real small units or real big units. We kind of like them in the middle because we know over time those generally speaking are going to perform pretty well. And you're going to find, you know, there's a big enough filter for, for people to rent those units. 60% 1 bedrooms, 40% 2 bedrooms. I mean, just kind of right down the middle. And we really are convicted that that's the place to be. And then last thing I would tell you is just the basis. It's crazy how different cost basis can be from developer to developer. So, you know, at the end of the day, if you have a really attractive basis, it really gives you a better chance of success without stating the obvious. So those are kind of the, the things we haven't done a ton in the west coast or the east coast because obviously we just kind of follow the job growth. And, and I'd really, you know, going forward, Texas and Florida and the, you know, Georgia, Carolinas and the Mountain west are just going to continue to grow faster than some of these other markets.

[A]

Right? So, yeah, I like how you say that. You like to go deep, not wide. So you know the spatially well, so you see a ton of development deals obviously coming across your desk and you know, every developer out there is trying to raise capital off the thesis that, hey, very little starting, we're going to have a lower supply environment in 27, 28, probably longer. But a lot of those deals still don't work given where rates are and where rents are and so I'm curious, like from what you're seeing, like what's the profile of an attractive development deal? And you've kind of mentioned you like those down the fairway, but you know, just getting a little more specific, like when you see deals that actually not only check those boxes but that actually work, have a good basis, have a good growth profile, what do those look like and what's, like what. So what do you, and what are you looking for with developer? The site, the product, the structure to, to, to see one that actually is going to, going to work for you guys, right?

[B]

I think from an economic standpoint, you start with what the yield on cost is projected to be. The reality is if you're going to be in a JV position, you better be really comfortable that it's at least a 6 and a half to 7% yield on cost because, you know, having, if cap rates are low fives and you're at a low 6 yield on cost, I mean that's probably a 15 to 20% margin, you know, profit margin, if you will. And so that's just really difficult because at that margin you're probably not going to make any more than we make in a, in a preferred equity position. So I think first and foremost the yield on cost and most of the deals that we get and listen, developers are aggressive and they're, they're going to trend rents and so most of them come in quite high. And then once we underwrite them to what we think rents are today and what they will be when it, when it starts to lease up, you know, it ends up being probably a mid 5 to mid 6 yield on cost. So what we really like about our space is that if we go to 80% of that cost, then our debt yield, if you will, is 7 and a half to 8% or our cap rate. So that's kind of why we really like the downside protection of being in a preferred equity position. But you know, there are other things. I mean, you know what's been really difficult for us in this age where information is readily available is really tracking new supply. It's insane. The number of times you're told there's no more deals that can be built in this sub market and you drive up six months later and there's another one being built. And there's always, well, you know, that's an exception. That's probably the most difficult thing that we have to deal with is really having good enough data to know what this new supply is going to look like. So you Know, second to that, sponsorship is key. You know, we, we need guys that have got skins on the walls, that have built and sold. They've had issues, they know how to solve issues. And the difference in working with a group like that, with some, A group that's not quite as, you know, as. As experienced is radically different. So, you know, at the end of the day, it's a relationship business you get with people that do the right thing. And sure, markets are out of our control for the most part, and certainly this past four years have been difficult, but the groups that we really, really have done, you know, repeat business with are just really good people that do the right thing. They're realistic. On leasing up. I think the biggest issue that we've seen really in the past 12 to 24 months is developers that hold rent because they know if they reduce rents, it's going to affect the cost or what they can sell the property for. And so what happens, you wait out there and wait out there and it just, you know, they just lose momentum and, and the deal doesn't stabilize in the right period of time. And so being with, with developers that, hey, listen, there are moments in time where you just need to get the quintessential heads on beds and lease it up. And once you get stabilized, then you can start to maybe be a little more aggressive with your renewals or, you know, kind of where you're. Where your market rents are going to go. So I don't know if that completely answers the question, but, but that's kind of what we, what we really are focused on. And the last thing I'll, the last thing I'll say is, you know, it's. We're in a unique position in that we probably underwrite four to 500 development deals a year, which is crazy, and the funnel goes down to maybe we offer on 50 of them, and then the funnel is we end up getting 25 to 35 investments a year. So there's a lot out there, and a lot of those deals never get capitalized. But it is interesting to see all the different ways that developers are going to try to piecemeal these deals together.

[A]

Well, especially the rents. I see this all the time, and obviously some do it better than others, but you can make the rent look like whatever you want based on how you slice it. And I say you mentioned a lot of these deals don't get capitalized. Is the common denominator. Usually just the yield on cost is too low or the assumptions are too generous.

[B]

100%, 100%. We were trying to. As we've gone out, we're raising our fifth fund and trying to illustrate to investors kind of the difference in US versus JV Equity. And we put together a slide that showed if we go to 80% of cost and our preferred equity to get our full accrual after call it three years, the property needs to sell for 85 or 86% of cost. Conversely, if you're a JV equity investor, you know, you have to sell the property for 20% more than you built it for in order to get the same return as we get. And to me, that's kind of, you know, a really kind of eye opening when you tell people that, they're like, wow, that is totally different. You can sell it for less than they built it for and get your return. I gotta sell it for 20 to 25% more than they built it for to get the same return. It's really interesting.

[A]

Oh, yeah, no, that makes a lot of sense. So, David, before I let you go, I want to ask you about an organization that you and I care about, about Apartment Life. And I understand you were one of the people who helped Stan do start Apartment Life some years ago. And so I'm curious, if you take us back to those early days, what. What spurred you to be part of that? And just more broadly, how do you kind of rank that among the many things you've accomplished in your career?

[B]

You know, it's very unique that guys or people find, you know, something that that's way beyond themselves in the business that they're in. And so what was so unique about Apartment Life is it was really on the heels of us starting Ara back in the late 90s real quickly, or maybe not as quick, but, you know, we didn't have the Internet back then. So, you know, we had these multifamily publications, and there was a publication called Multifamily Executives. And I'd have a stack of these things that I'd sit in the back of my car that I needed to read, but I just put it off too long. And so before I would throw them away, I just kind of thumbed through them real quickly to make myself feel like I actually read it. And so I was thumbing through this. This is late 90s, and I saw this little blurb on a deal called Apartment Life Developers, which was what it was called at the time. And it talked about a guy named Stan Dobbs, who was the. He was an assistant pastor at First Baptist Church in Euless, Texas. And he was starting this apartment ministry where they were putting couples in apartment properties to love on the residents. Because, you know, apartments are. Can be pretty messy. I mean, you know, you've got, you know, divorce and you've got job losses and you've got health issues and economic issues and 300 people plus living in one place. It's just, you know, and so. So when we were starting ara, I was really looking for something and I prayed about it, you know, for God to open a door to do something more meaningful than just selling apartments. And this kind of came up. So I. Funny thing is, I. We didn't have, you know, an iPhone back then, So I called 141 1, which is what you used to have to do. Get a phone number.

[A]

Yeah.

[B]

And I called 1411 for First Baptist Church in Euless, Texas, and I spoke to Stan Dobbs. I said, hey, I want to come meet you. I want to hear about what you're doing. And so we met at the Chili's in Love Field for about three hours.

[A]

Wow.

[B]

And I heard what was on his heart, and it was really resonated with me. And so that was kind of the genesis. And, you know, in that first group of guys, it's just an all star group, it was Bobby Page and Doug Chestnut and Marshall Edwards and David Ward board, and just dear friends of mine, Roger Bilas. And we all kind of collectively came together to go figure out how do we make a difference in this industry that's been really good to us. And so, you know, fast forward, you know, apartment life has grown from literally zero to over 700 properties that we serve in. And the crazy part is that, you know, the owners pay us, churches support us, that put in the CARES teams, and we have, you know, basically get 95% of the cost paid for. And it's not a little cost, it's like $30 million because it's got quite a big staff. So super unique business model for a ministry that I think has made incredible impact. And, and I'm always surprised at owners that even if you're, you know, not terribly drawn into ministry, but, you know, it's a, it's a program that can super impact residents that pay you rent. You know, that is the lifeblood of your business. And why wouldn't you want to give back and be a part of this? It's really, it's really spectacular. So, yeah, I was on the board for 17 years. They kicked me off for good reason. And then that was like the early 90s. And then I got back on and so, you know, Pete Kelly is the new president of Apartment Life and he's just amazing. He's a just amazing godly man and he's just, he's just, he's done a great job of growing the, the ministry. So to answer your question, it's been a huge part of my life. It's been a huge blessing to me to be a part of it because as I mentioned, it's very unique to have a, something that you do outside of yourself in your, in your industry. And so, you know, I, I couldn't be more supportive or I'm just, I'm just a huge fan and it's been, it's been awesome to be a part of.

[A]

Yeah. And I want to share one thing for the audience too, which is that, you know, I'm a data nerd and I know you appreciate this too, but Ron Whitten had done a study whiles back to know you're familiar with probably that showing that when people have, the more friends people have where they live, the more likely they are to renew. And so you mentioned, hey, it's not just a ministry, it's a business. Like, it's just, it's a business impact. Right. You know, when you're able to build relationships, have people who are facilitating relationship building in your apartment community with those 300 plus people, that creates a stickier living experience which means less turn, which means less turnover costs which could mean better noi, better property value etc.

[B]

Yeah, everybody's trying to find the next amenity if you will. And if you have something in place that can help connect people and make friends and help them stay longer, it's just as good as a, you know, know the golf simulator or the, I mean, you know, it's like, hey, why wouldn't you want the advantage? And that's what apartment life does. And it's got a, a deeper meaning obviously. But yeah, that's. I love. They call it the friend factor, you know, is what they create. So.

[A]

Absolutely. Well, David, grateful for you and, and Stan and those, those guys who started that many years ago and thank you for the time you've given us today and best of luck going through the rest of the year and navigating this whole cycle.

[B]

I sure appreciate it. Thank you for what you do. Jay Foreign.

[A]

And that's a wrap on episode number 87. Big thanks to David for being our guest today. Also big thank you to jpi, to Madera Funnel, Authentic Foxen Telecloud and also big shout out to my friends at Apartment Life and thank you to all of you for spending part of your week with us. We'll see you next time.