Speaker 1: Those pretty you know, they put out a list of
a bunch of the federal assets they were going to
sell off, maybe all three weeks ago they put that
out and then the kind of that website went down
and there were four hundred some properties on it. Now
there's talk maybe there's eight hundred that they're gonna, you know,
bail out of. But uh, I think it's a good thing.
It takes underused public property, puts it into the private
sector and figure out, you know, what can you do
with this.
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Speaker 3: And welcome you are listening to and watching the Financial
Survival Network. I'm your host, Carrie Lutz. Well, you've probably
been hearing about Doge. You've been hearing about the government
on loading all of these unneeded, unused properties. Even with
the government workers going back to the office being forced
back there, there's still tens of millions of square feet
of office space that the government is disposing of or
that it's leasing and that the owners will be disposing
of it. And person you're about to hear from David Cordrey. David,
you specialize in buying properties with problems. Is this the
kind of problem you're looking for? So that's exactly what
we're looking for. Thanks for having me today.
Speaker 1: It's a it's going to be an exciting time when
they when they kind of make all these cuts and
reposition a bunch of assets.
Speaker 4: Yeah.
Speaker 3: So all right, So how do you identify ones that
are good as opposed to others that should just be leveled?
Speaker 1: Well, the you know, the really really big assets are
true because if you've got hundreds of thousands of square
feet in a tower or a huge complex, that's that's
hard to find an immediate use for. The biggest risk
on any investment is time. So I'm looking for more
of the smaller assets. If it's under one hundred thousand
square feet and it's something that has decent bones to
start with, that's a piece of property that you can
you can probably convert it to something relatively quickly in
the grand schemity without doing a big redevelopment where you
got to go, you know, build hotels or create a
downtown center or any of that kind of stuff that's find.
Speaker 3: A huge purpose. How do you figure out how to
repurpose them?
Speaker 1: Most of our strategy is how do we get it
to a usable sized footprint that any kind of local
business would want to use. If you look at some
of these, especially on the government side, we've done a
lot of this on office where you see old call
centers that are called fifty to one hundred thousand square
feet and that those things are gone, it's been replaced
by AI or it's all overseas. So those footprints, we
can pretty easily carve those up into five thousand, fifteen
thousand square foot suites. And then we're we're focused on
just local businesses. Everywhere you go, there's a local business
that's doing you know, they're the ones that are doing
your electrical work, they're doing your plumbing work, hvac like
that stuff's hard to replace.
Speaker 4: It's hard to.
Speaker 1: Get talent that can do it, but they all need
the spot that they got to operate out of.
Speaker 4: Yeah.
Speaker 3: Yeah, so I guess with the danger comes opportunity.
Speaker 4: As the Chinese like to say, right exactly, Yeah.
Speaker 1: Those putting you know, they put out a list of
a bunch of the federal assets they were going to
sell off, maybe all three weeks ago they put that
out and then the kind of that website went down
and there were four hundred some properties on it. Now
there's talk maybe there's eight hundred that they're going to
you know, bail out of. But I think it's a
good thing. It takes underused public property, puts it into
the private sector and figure out, you know, what can
you do with this then?
Speaker 3: So one man's garbage is another man's goal.
Speaker 4: Is that it? Yeah?
Speaker 1: Right, necessarily that's been the business strategy for the past
fifteen years on stuff I've been working on.
Speaker 3: You know, this could be like the best thing that
happened since the RTC and they sold off all those
properties for a song and wound up being hugely profitable.
Speaker 4: Yeah.
Speaker 3: So yeah, you know, going on, when you're looking at
what properties are you looking at that you want to
you know, what's your ideal situation that you're looking at here?
Speaker 4: Yeah?
Speaker 1: I mean for me, I focus on the southeast, so
I don't travel too far from home. I live in
Atlanta and you know, between Atlanta and Charlotte, there's plenty
of opportunity. So I'm looking for one assets that are
in that Southeast quarter that those would be great. And
then I like seeing stuff that has flexible zoning and
a lot of parking. So if you get real tight
in a city center and you've got a big vertical building,
that's you know, you've got a lot of other stakeholders
in there process that you're going to have to work through,
and me, that's going to take time and that's probably
the right deal for some people, just not for me.
Speaker 4: I'm looking for.
Speaker 1: More, fewer like institutional stateholders on it around my asset,
and something I can move on pretty quickly. So it's
typically a lower rise building. It's typically a little more suburban,
more industrial type feel. That kind of stuff that I
can find find different users for relatively quickly.
Speaker 3: Gotcha, So what's your time frame for taking these buildings
and making them profitable or selling them?
Speaker 1: If for most of it takes about eighteen months, that's
our kind of our our go in and work with
the municipality and say, hey, we've got one hundred thousand
square feet of vacant space, and I think we can
we can divide this building up and then least it.
It takes us takes us a couple of months just
to get through permitting and say, hey, what are we
going to do with this thing? And sometimes the cities,
the municipalities are like what do we what we trying
to do here? You know, it's a little intriguing on
their end, but ultimately like if the zone in alignes
and it can be done, we can. We can do
the work pretty quickly and then and then find uh,
find new tenants and local businesses that want to use
a space.
Speaker 3: So you're looking at office buildings here, what other is
there flex space or their warehouses that you can con work.
Speaker 1: Kind of the the more like known terms of that stuff.
You're thinking about warehouse and you've got thirty foot clear
heights and that kind of stuff that's not you know,
that's that's like its own actual dedicated asset class. We're
looking for all this stuff that's gray area and in between.
It's like is it office, is it flex? Is it warehouse?
It's like, well, depending on what you need, that's what
we can turn it into whatever you want it to be.
That's kind of our pitch when we're going to work
with different tenants that want to occupy the space, but
we can only come into a cheaper basis because when
you're buying a disquasi distressed or opportunistic deal to start with,
and then uh yeah, and then really customizing it to
what they need, whether there's some office, some warehouse, some
loading docks, it's really a mix of all that stuff
that we can put in.
Speaker 4: Got it.
Speaker 3: Hey, So what about the concept of the data centers
and that kind of thing. Is that something you know,
the AI centers you're looking.
Speaker 1: At, Yeah, I mean, that's that's there, And there's definitely
a lot of interest in the in the world for
that kind of stuff, but the price point is super
high and time to do it is long, and everyone's
battling over where they're going to get power supply, and
and there's so much interest that that kind of shy
away from that stuff, like I want to go where
it's not interesting for right now.
Speaker 3: So that's just the trend, the flavor of the day,
like Baskin Robbins right exactly.
Speaker 1: And they're and I mean we need them. Some big,
big groups are doing some huge data centers and they'll
probably do phenomenally. Well, but yeah, doesn't that size is
that it is kind of not on my radar.
Speaker 3: You got energy constraints there too. Of course you odabat's converting.
What about converting it to housing?
Speaker 1: It takes too long, too much, too much zoning and
permitting approvals to move things. You know, we've done stuff
in different cities where they're not necessarily interesting, converting all
of their commercial in office zoning areas and being like, hey,
we'll just flip this on its head our twenty year
city planning we did and say, now this is all residential.
Like they don't they don't necessarily want to do that.
So it's in some in some cases it can work,
like in downtown Atlanta, it's like it doesn't really matter
if one office building is now residential, in the building
next to it, his officer residential.
Speaker 4: It's probably okay. But most most you know, most.
Speaker 1: Cities aren't going to want to just completely flip their
city planning on its head.
Speaker 3: Yeah, well then again if it's an empty building. But
you know, cities make mistakes all the time about their future,
about redevelopment. Just tell us your past. When you say
you find properties with problems, tell us the property you
found that had the biggest problem, and I assume the
biggest upside reward biggest problem.
Speaker 1: Uh we I purchased a mobile home park maybe twelve years.
Speaker 4: Ago or whatever.
Speaker 1: But it basically wasn't even connected to any kind of
None of the septic tanks worked, it wasn't connected to
city sewer. It had a septic pond, which you can
imagine what that that thing actually is. So it was like, Okay,
we got buy this thing and really I mean bringing
a ton of new homes and turn around everything that
was there, build out the infrast like the actual physical infrastructure,
even use the space I mean that that was it
had a pump station to like get sew or higher.
It was like, oh my gosh, that was a handful.
Speaker 4: But it was good.
Speaker 1: I mean, it was a It ended up being a
great project. It was a giant a giant pain is like,
who wants to actually buy this thing? So we're trying,
we're trying to make sure that they don't get that bad.
We were buying them because those are those some definitely
heavy lifts that's got to be done there, but lot
lots of you know, I started out in apartments too,
there's lots of apartments that were completely bombed out that
you're like, what.
Speaker 4: Are we going to do here? Yeah? No, those are
always fun, fun projects. All right. Well, hey, appreciate you
coming on.
Speaker 3: Tell us how we connect with you, how we find
you on the web.
Speaker 4: Yeah, I'm on LinkedIn.
Speaker 1: That's kind. I've got all my information up there. My
company website is there too, and my phone email.
Speaker 4: All right up there. Great. Hey, well I've got a
question for Dave myself.
Speaker 3: Email kl at Carrie lets dot com and you'll find
a link to David's leaked in on art site. Financial
Survival Network dot com. Oh we ask when you go
there is sign up for our free newsletter, like most
of seventy five thousand of you FSN people have done already. Dave,
thanks for coming by. We'll talk to you so.
Speaker 4: Yeah, I appreciate it. Carry it's fun.
Speaker 2: Thanks for listening to Carrie Let's's Financial Survival Network your
solution to today's trying times. For the latest, go to
Financial Survival Network dot com. Financial Survival Network now more
than ever