Lessons from $5 Billion in Assets: RREAF Holdings' Jeff Holzmann Shares Strategies

Jeff Holzmann, COO of RREAF Holdings, shares insights on the firm’s unique approach to commercial real estate, its impressive capital stack strategy, and the vision behind its multi-billion-dollar investments in Middle America.

(0:09) How's it going? (0:10) And welcome back to how to invest in commercial real estate. (0:13) What is up? (0:13) We have a super exciting show today. (0:16) That's Joel though.(0:17) Well, I mean, maybe that's why it's so exciting. (0:20) It should be a good one. (0:21) Yeah, it should be.(0:22) It should be a good one. (0:22) Anyway. (0:23) I know Joel is sad to miss out on this one because when we're screening podcast guests, (0:29) some of them are more impressive than others and he's like, Oh man, let's definitely get (0:33) Jeff on.(0:34) And then he had to miss this one. (0:36) Anyway, super excited. (0:38) We will introduce our guests in just one second.(0:40) There's a lot going on in the world. (0:43) I know we just had a big election. (0:44) Yeah.(0:44) Who won? (0:47) I didn't hear about it. (0:48) Yeah. (0:48) Yeah.(0:49) Anyway, everything is kind of surging. (0:52) Stock market seems like it's at an all time high. (0:55) Crypto is running.(0:57) If you're into that, Trump, you know, just got reelected. (1:01) Fed's meeting today. (1:02) Federal Reserve's meeting today.(1:05) Yep. (1:05) Another cut. (1:06) I hear they're going to go ahead and do the cut even though, you know, the election had (1:09) no bearing on that.(1:11) So they're going to, I think they're going to cut again today. (1:13) No bearing. (1:14) Yeah.(1:15) So sitting president never has any bearing on that kind of stuff. (1:20) Anyway, um, let's, Oh, uh, the Petromax Henderson gas stations. (1:27) We successfully closed on those.(1:29) Um, we're, we're, we're done. (1:31) We're done with the gas stations. (1:33) Whoo.(1:33) Yeah. (1:34) I've been working on it all year. (1:34) We just closed the last four.(1:35) So we have five now. (1:37) Um, we are already working a deal on those, on those four. (1:41) So hopefully we can get some finalized here soon.(1:43) Um, ideally we'd like to close before the end of the year. (1:45) So we need to get something finalized ASAP because we're a couple of weeks into November. (1:50) Anyway, uh, without further ado, we're going to get into our guests here.(1:54) Uh, Jeff Holzman, and he is the CEO if I'm not mistaken of reef, which is super impressive (2:03) in my opinion, because they have hundreds of real estate assets all over the country (2:07) over a billion and a half and assets under management, which is impressive. (2:11) That's who we want to be. (2:12) Yeah.(2:13) I, I, I'm just trying to get to a billion. (2:14) I mean a billion and a half that he, Jeff probably stopped at a billion anyway, uh, (2:19) without further ado, Jeff introduce yourself and, uh, tell us a little bit about, uh, (2:23) you and, and reef and kind of everything going on. (2:27) Absolutely.(2:28) So I'm Jeff Holzman and small correction. (2:30) I am the chief operating officer of reef holdings. (2:34) I'm not quite the CEO.(2:35) CEO is a great guy. (2:37) Uh, it's, it's a great leadership team. (2:39) I'll tell you all about him, but I am the chief operating officer of the reef holdings (2:42) group.(2:43) Um, a little bit, uh, a little bit about reef holdings just for context for, for the viewers (2:48) and listeners. (2:49) Uh, reef holdings in one way or another has been around for almost 30 years. (2:53) Uh, this latest iteration as reef holdings, uh, the way it's structured now, and it's (2:58) reef with a double R. So it's R R E A F. And for those, uh, for, uh, for those of your (3:04) viewers who are a little older, like myself, they'll probably remember that there were (3:08) other reefs and other iterations, but this current company reef holdings based in Dallas, (3:13) Texas, uh, was founded about 12 years ago.(3:17) And with the vision of really serving middle America and providing, uh, real estate solutions (3:22) for middle America, middle America is, is a fancy way of saying people call it blue (3:26) collar or the middle income level. (3:29) What it really means is that we don't cater and we don't provide real estate solutions (3:32) for the bottom of the, of the, uh, sort of the income ladder. (3:36) And we're also not at the top, uh, for the very luxurious.(3:39) And it is the largest contingency, the largest group of, uh, in terms of social demographics (3:44) in the U S. So it's, it's a good market to cater to. (3:47) Um, the vision was always to provide real estate solutions. (3:50) We started out with multifamily like many other firms did, but we have since evolved.(3:55) We have five different verticals. (3:56) Multifamily is by far our largest. (3:59) We have more than 50 different communities around the country with about 17,000 different (4:03) units.(4:04) Roughly, you put the numbers together. (4:06) That's about 50,000 people that leave that live, uh, monthly in our communities. (4:12) We also own and operate, uh, 16 different hotels.(4:16) Um, many of them are currently functioning. (4:18) Some of them are under development. (4:19) We'll talk a little bit about that.(4:21) Uh, we have our own construction company, RCS, Reef Construction Company. (4:25) We do extended stay, which is a sub portion of our, uh, hospitality platform. (4:31) And we do RV parks.(4:33) And we'll talk a little bit more about those and how that's this specific vertical is unique (4:37) because they're more transient luxury kind of stays. (4:40) They're not your mobile home parks, although that's a, that's a phenomenal real estate (4:44) investment category as well. (4:45) That's not what Reef does.(4:46) And the last and probably most exciting thing that Reef does is something called Reef Communities (4:50) where we build master planned cities. (4:55) They're, they tend to be smaller towns and these are multi-billion, multi-decade long (4:59) projects. (5:01) Uh, we buy thousands and thousands of acres.(5:03) We currently own two plots along I-35 in Texas, between, uh, Dallas and Austin, prime, prime (5:09) real estate. (5:10) Uh, we were just talking about the elections recently, uh, earlier on your show. (5:13) Uh, I'm sure you've seen the stats.(5:16) People are moving into Texas by the drones, right? (5:19) It's unstoppable. (5:20) Uh, so these, uh, these two plots of land that we have thousands of acres along I-35, (5:25) very, very popular with net in migration, uh, positive net in migration, uh, really (5:31) for the last couple of years. (5:32) And we build cities, we build it from scratch.(5:35) So everything from, uh, infrastructure roads with the Texas department of transportation, (5:40) we put together interchanges, we build, uh, infrastructure for water and sewage. (5:45) And then of course we build the actual housing solution. (5:48) Some of them are multifamily.(5:49) Some of them are a BTR built to rent or single family, uh, product. (5:53) We also build hotels, extended stays, even municipality buildings. (5:57) So as you can imagine, these are multi-billion, multi-decade long projects.(6:01) And we'll talk a little bit more about them, but yeah, you've, you've hit, uh, you've hit (6:04) the nail on the head. (6:05) It's, uh, about 500 or so employees, uh, just under $5 billion in assets on their management (6:11) with offices and, uh, team members really, uh, across the country. (6:15) We only work in the U S we currently do not do anything international.(6:19) So a very large group, uh, has been around for a long time and, uh, really is doing spectacular. (6:25) Yeah. (6:26) That's really impressive.(6:27) Yeah. (6:28) I like, uh, having you on the show because you're doing a lot of things that we don't (6:32) talk about a lot, but we're really interested in, uh, criteria intends to specialize in, (6:37) in retail. (6:38) And, uh, some of these things that you've talked about, we were, we're, we've, we've (6:41) done multifamily before, but some of these other things we've looked at RV parks, hotels, (6:45) and we just never have dipped our toe into that, but, but would love to get into those (6:50) things and love to discuss those with you.(6:52) So yeah, is reef, uh, is reef a reet? (6:56) Is it? (6:57) It is not. (6:58) And that's a great question. (6:59) And I'm sure your viewers know what that means.(7:01) There's pros and cons to how you choose a structure for operating, uh, reef holdings (7:06) is not, it is a holding company. (7:08) Uh, I'm sure most of your viewers are educated enough in real estate to understand that the (7:13) equity, right? (7:14) The money in, in real estate projects is usually with the title company, which means that every (7:19) single project is kind of a standalone project. (7:22) You could be an investor in a multifamily, you can be an investor in a portfolio of multifamilies, (7:26) or you could be an investor in the holding company level.(7:29) The way reef chooses to operate is, uh, as a standard, it's a privately held company. (7:35) Um, there were other reefs in history, uh, that were publicly traded reef holdings right (7:40) now as where I work, as we know, it is a privately held company and that allows us maximum flexibility (7:47) to structure every single one of these investments differently. (7:51) So unlike a reet, we're not bounded by, uh, by some of these tax exemptions where you have (7:57) to distribute 90 and 95% of your profits.(7:59) Uh, we tend to operate where we structure these offerings. (8:03) It's usually a five Oh six C offering for accredited investors that allows us to bring (8:07) in, uh, institutional funds from, from the one side, uh, we have everything from New York's (8:13) teachers to California teachers, pension funds, the very large institutional players that (8:17) invest with companies like us, uh, and are in fact our partners as we speak in some of (8:22) these projects and some of these portfolios. (8:23) But it also allows us to bring, um, accredited individual investors and we've scaled that (8:29) up.(8:30) It started with just friends and family. (8:32) And today we actually have thousands of retail investors coming in through that structure, (8:37) some of them to the tunes of millions, maybe even tens of millions of dollars, every single (8:42) one of them. (8:42) So, so as you ramp up throughout the years, these become very big, significant numbers.(8:47) What that allows us in turn to do is that that entity hires reef holdings to act as (8:53) the manager. (8:55) So there is a lot of money. (8:56) There's a lot of equity.(8:57) There's a lot of knowledge built into reef holdings, but reef holdings is not the direct (9:01) owner of all of this real estate, right? (9:04) Right. (9:04) Yeah. (9:05) Some sort of SPE is the owner.(9:07) You guys are the manager and then I'm, I'm sure you guys have some sort of promoted interest (9:11) on the backend. (9:13) Exactly. (9:13) So exactly like you said, so these are special purpose vehicles that we put together every (9:18) single one of them individually.(9:19) In some cases it's a portfolio. (9:21) So when I say SPV, it could be 20, it is in some cases we have a portfolio called a TC21, (9:26) the trans coastal 21 portfolio. (9:28) So these are 21 assets in an SPV, but it's still one portfolio out of many, many assets (9:34) that reef holdings acts as a manager to, but you're right.(9:37) We do have promotes. (9:38) All of that is disclosed in the operating agreement and subscription documents. (9:42) So follow the money, right? (9:43) See kind of how the, how the cash flows through the waterfall and reef is a profitable, super (9:49) successful company.(9:50) But the way we chose to structure it is it does not own all the real estate that reef (9:56) holding managers. (9:57) No, very important distinction. (9:59) Yeah.(10:00) Similar to Criterion. (10:02) Is it the same? (10:03) The exact same. (10:04) Yeah.(10:04) Criterion is a holdings company. (10:05) We set up a specific purpose entity for that deal we're buying. (10:09) Maybe several deals.(10:10) We'll clump them together. (10:11) Go raise the money. (10:12) It's got its own operating agreement.(10:13) Criterion is the manager of that entity or that deal. (10:18) Yeah. (10:18) I mean, we're, we're structuring it literally the exact same way we're using 506E.(10:23) So it's, it's good to see that at scale that still works, right? (10:27) However many billions of dollars it works. (10:30) It does. (10:31) It does.(10:31) It works even better at scale. (10:34) One of the things that we like so much about this structure that we have is that we don't (10:38) have any institutional equity at the holdings level, which means we don't have a board (10:42) of directors that is driven by the needs to show something about a stock price and they're (10:47) going to make us sell assets even if we think it's a dumb move just because they have a (10:52) quarterly goal to meet. (10:53) And again, I'm not putting down the capital markets and the way that, the way that this, (10:57) the way that our country and our economy works, it doesn't work for us.(11:03) We like to have that freedom to make what we think is the best decision for investors (11:06) at a given time. (11:09) And so far it's been tremendously successful. (11:11) You know, our track record speaks for itself.(11:13) We have an average IRR return in the 20s and an equity multiple of above two with an average (11:20) holding period of three and a half years. (11:22) And I'm not going to tell you we've never had any misses. (11:25) We have, but very little.(11:26) And even those, nobody ever lost money investing with Reef. (11:30) And again, knock on wood, past performance is not indicative of future performance, right? (11:34) We have to mention that. (11:36) But the track record speaks for itself and we like having this structure, but you know, (11:40) I wasn't born last night and I'm not going to make any predictions or any guarantees moving (11:45) forward the next five years, the next $5 billion, maybe we'll settle on another structure.(11:50) But right now we'd like being a privately held holding company. (11:52) It's not a reef, it's not a fund, and it's not open-ended in the sense that we have money (11:57) that we have to deploy, whether it's a good deal or not. (11:59) We only look for good deals and I'll tell you what, if the deal is not good, we're not (12:03) transacting.(12:04) And 2024 is a good example. (12:06) It's not a very good year for us in terms of volume, but that's because we couldn't (12:10) find any good deals. (12:11) And if I was a reef, I was almost forced to transact.(12:14) We don't like being in that position. (12:16) Yeah, similar philosophy to us. (12:18) And we slowed down a bit in 2023 and 2024, went to some development projects to try to (12:25) keep the deals flowing.(12:28) Are most of your deals cash flowing deals where you're sending out distributions to your investors (12:32) or? (12:33) Yeah. (12:34) So historically in the multifamily vertical, that is one of our criteria, right? (12:38) It's something that we look forward to and that's how we structured the deal. (12:42) We were very, very fortunate.(12:45) There's some wisdom that goes into that, but I prefer to thank our lucky stars rather than (12:49) pat myself on the shoulder. (12:52) And I will tell you that most of the deals that we structured, 99% of the deals that (12:56) we structured in the multifamily vertical were with fixed long-term debt when the interest (13:01) rate was low. (13:03) I'm talking low.(13:04) I'm talking to between two and 3%. (13:08) That's low. (13:08) Wow.(13:09) Bingo. (13:10) So we are still, and I'm not going to tell you that interest rate don't affect us. (13:14) They do because they affect everything from your resident's ability to pay the rent and (13:20) perform and execute on leases to the cost of labor, to the sometimes the cost of capital (13:26) expenditure, the capex work that we do.(13:28) But for the most part, they affect us indirectly. (13:32) The more direct relationship we're hedged against it, right? (13:36) Because we have a fixed long-term debt at a low interest rate. (13:39) And that means the debt actually became an asset because this debt is assumable.(13:44) So I can tell you that I filter calls from very well-known groups, mostly in places like (13:50) New York and California that call me almost every week saying, will I sell my portfolio (13:55) with the debt? (13:56) Because it is cash flowing and it's assumable and it's going to continue to cash flow regardless (14:01) of interest rate for quite a while. (14:04) So we're in a very, very good position with those portfolios. (14:07) Yeah.(14:08) Nice. (14:08) So you said you have a wide range of investors from, you know, massive teacher pension funds (14:15) to retail investors that may give you hundreds of thousands or a hundred thousand. (14:19) Are they treated the same? (14:21) Are they going in the same deals? (14:23) Do they have the same return structure? (14:26) Do they have the same waterfall? (14:27) I guess walk me through that if you don't mind.(14:32) Yeah. (14:32) The answer is no. (14:34) And of course, we treat everybody equally.(14:37) But the leveraging power, the negotiation power that larger funds have usually results (14:44) in them being located differently in the capital stack. (14:47) So we would use some of these funds that we talked about in a PREF equity position. (14:53) So let me back up for a minute and give you kind of the basic capital structure of how (14:57) a deal looks like.(14:58) And I'm not talking about one specific deal, but just in general. (15:02) So if we're buying a multifamily portfolio, this would probably range in the hundreds (15:06) of millions of dollars for a single transaction, maybe up to a billion dollars. (15:12) And about 60 to 70% of that will be debt.(15:16) And that we will source from one of the large agencies, right? (15:20) So Fannie, Freddie, we're an Optigo-level sponsor with Freddie Mac. (15:26) For your viewers that don't know what that is, you can Google that. (15:29) It's Optigo.(15:30) And it's a status that you get with Freddie Mac that gives you certain benefits. (15:35) And you can only really acquire that status through years of volume, successful work with (15:41) those lenders. (15:42) These are government-sponsored enterprise GSEs.(15:44) So you cannot buy your way into an Optigo. (15:47) You have to successfully execute and borrow and pay it back. (15:51) So we are an Optigo-level developer, a borrower.(15:55) So maybe roughly 60%, depending, plus, minus 5% will be debt. (16:03) And again, that usually we would take a long-term fixed rate. (16:08) These days, of course, can be a little different.(16:10) We were talking earlier on your show about the Fed meeting today and about lowering interest (16:15) rates. (16:16) We'll see where that goes. (16:18) On top of that, they get us higher in the capital stack towards the 80, 90% range, depending (16:23) on the deal.(16:24) We would usually layer in some kind of PREF position. (16:27) Preferred equity is treated differently than senior debt, obviously, and it's treated differently (16:31) for tax purposes. (16:32) But it still needs to be big numbers, right? (16:35) We're talking in the tens, maybe hundreds of millions of dollars.(16:37) So that's where these larger groups, institutional type of capital would usually come in. (16:44) Usually, there are exceptions. (16:45) We do have very big partners in the common equity as well.(16:47) We'll talk about that in a minute. (16:49) So those groups would usually come in and they would have a substantial amount of investment. (16:55) And that's going to matter because if you're investing $100,000 in a deal, you can't afford (17:00) to pay a lawyer $20,000 for due diligence.(17:03) That's going to eat up all of your return. (17:05) So these groups can do that, right? (17:06) So they'll come in. (17:07) They have their lawyers.(17:08) They have their due diligence. (17:09) They have their asset managers. (17:11) They will certainly tour the assets with us.(17:14) They will visit our corporate headquarters in Dallas. (17:16) And the reason I'm telling you all this detail is because all of that forms a partnership. (17:21) At this point, we get to know them personally.(17:23) We get to know their analysts. (17:25) We get to know their asset managers. (17:27) We get to know their reporting systems.(17:29) They have a say when it comes to how we audit our financial statements. (17:32) So this is a really, it's a partnership. (17:35) And Reef Holdings also operates a property management firm.(17:39) That's one of the reasons our headcount is so massive. (17:42) The actual leasing agents and property managers and maintenance workers, they all work for (17:47) the same company I work for, Reef Holdings. (17:49) So everybody kind of gets to know everybody and that builds that confidence.(17:53) And again, we're talking hundreds of millions of dollars that are then layered in. (17:56) That leaves you with the last 5%, 10%, 12% of the capital stack, which is in the form (18:02) of common equity. (18:03) And that's where Reef Holdings itself will come in.(18:06) That's where some of the principals in the company will bring their own money occasionally. (18:10) That's where other retail investors would come in. (18:13) And that's also a part of the capital stack where we've seen large institutional players (18:19) join us in what's known as the JV common equity piece.(18:23) Obviously, there's pros and cons to everything in the capital stack. (18:28) The cons, if you will, for being a JV equity partner is that you're the last one to get (18:33) your money, right? (18:34) The senior debt will get it first, the pref will be paid later, and then whatever is left (18:38) will be paid to the common. (18:40) The pro side is that if this is a good deal, and again, our deals historically have been (18:44) very successful, then those are the people that will make the most amount of return.(18:50) So if a senior lender is making 3%, 4% on their money, but it's mostly guaranteed, (18:54) again, guaranteed is not the word that we use, but it's more secure in the form of (18:58) first lien and being lower in the capital stack, the common equity guys would usually (19:02) make 20 or 25%, but they would get their money less. (19:07) So pros and cons, depending on where you want to be. (19:10) Yeah.(19:12) Impressive. (19:12) Well, Jeff, that's really impressive. (19:14) I got to think our listeners are thinking, man, this is really impressive.(19:18) Jeff, man, he's really made it. (19:21) So they're going to think, well, how did Jeff get involved in real estate? (19:24) How did he get to where he's at? (19:26) So could you give us a little bit of your story? (19:28) Yeah, happy to do that. (19:29) So I'm 50 years old and I wish I could tell you that this is all part of a great plan (19:35) and I knew exactly where I'm going to end up, straight going into college.(19:39) That my friends is not how it works. (19:42) It's not. (19:43) And you're right, I've been very, very fortunate to end up in the chief operating officer of (19:49) Rafe Holdings.(19:49) It really is a very, very high level position in corporate America and not everybody gets (19:56) to do that. (19:56) And I'm grateful every day to have had the opportunity. (20:00) And this is not my family.(20:02) These are not my friends. (20:03) I didn't know anybody at Rafe Holdings. (20:05) I started working, and I'll tell you all about it.(20:07) I started working there and kind of rose through the ranks. (20:10) So to put it into perspective for your listeners, this was not handed to me in any way. (20:15) I never met these people.(20:17) They're not relatives of mine, nothing like that. (20:21) My case is classic of one thing led to another. (20:25) And yes, I'm going to say that I did make some good choices along the way.(20:28) But without a doubt, some of that was, let's call it luck, right? (20:33) Being at the right place at the right time. (20:34) I ended up with Rafe Holdings because previously I had worked for another company. (20:41) It was a crowdfunding platform for commercial real estate.(20:45) I'm skipping 30 years of experience, but I'm skipping you right there. (20:48) I could be here forever. (20:51) But I had worked for another company that decided to form a joint venture with Rafe.(20:58) And it was a 50-50 joint venture. (20:59) I'm still actually holding that position. (21:02) It was a company called IRM, and it is the company that was put together, and this might (21:08) be interesting for your viewers, it's the company that was put together to buy the operation (21:14) from Realty Shares.(21:16) Realty Shares was a very big deal at some point. (21:19) I'm talking about 10 years ago. (21:21) It was one of the largest crowdfunding platforms in the planet, one of the first and most successful (21:27) ones to do that.(21:27) They raised hundreds of millions of dollars from investors to invest in real estate, and (21:31) they flopped. (21:32) They went out of business. (21:33) The company went bust and has since went bankrupt.(21:37) And the company I was working for partnered with Rafe in order to put together an operation (21:41) that would salvage what is left of that and at least serve the existing investors so they're (21:47) not left with nothing. (21:50) And one thing led to another. (21:52) That partnership gave me, personally, the opportunity to interact with Rafe more, and (21:58) the principals at Rafe, the CEO, the president, the CFO, I think they liked what I'm doing (22:06) and how I do it.(22:07) And the way I approach operations is I bring a lot of methodologies from other segments (22:12) of the industry and other industries altogether. (22:16) So things like aviation, medicine, military, the use of checklists, the use of procedures, (22:22) data analytics. (22:23) So the reason I'm telling you all this is because a lot of the reason that I got to where (22:27) I got today in corporate America, in real estate, in commercial real estate, is because of (22:32) tools that I brought that are not from real estate.(22:35) And I saw this beautiful chart. (22:37) I'll try to share it with you guys after the show. (22:40) It's sort of this Venn diagram, you know, with the circles that overlap.(22:44) And they talk about how the greatest value in business is usually, right, there's always (22:51) exceptions, but it's usually created when people and companies bring in different (22:57) disciplines and not just specialize in one. (23:00) So, you know, the inner exchange, if you will, of mathematics and biology, all kinds of stuff (23:08) like that is that's kind of usually what the magic happens. (23:11) So for me, it was a lot of the disciplines and tools that I brought from my experience (23:15) in other industries, venture capital, aviation, military.(23:20) And that's what the principals at Reef, I think, liked so much. (23:24) And they literally, when they hired me, they said, hey, we want you to come over. (23:27) And the words that they use were, we want you to do that thing that you do over there.(23:31) We want you to do it for us. (23:33) And that was your first introduction to real estate, was it, Riff? (23:37) No, no. So, I mean, I had worked in commercial real estate even in the previous company before.(23:41) But again, being 50 years old, I've only been in commercial real estate for sort of the (23:45) last 12. (23:46) I spent decades in aviation and time in the military and time in venture capital. (23:52) And I still use those tools every single day.(23:56) Now, don't get me wrong, you cannot walk into commercial real estate, certainly not at this (23:59) level with a company like Reef Holdings, that transacts into billions of dollars and not (24:04) know what you're talking about. (24:05) You can't just show up knowing nothing. (24:07) And it took me years to kind of learn the ropes, everything from how a capital stack works (24:11) to how to negotiate with a vendor.(24:14) But you do not need, in my opinion, take it for what it's worth, you do not need to be (24:20) a 40-year veteran of one industry in order to gain success. (24:26) I think it's perfectly valuable to bring experience and disciplines and tools from other (24:32) industries as long as you apply them correctly. (24:37) And again, I've been very fortunate to be so successful in this industry with such a (24:41) brilliant, large company.(24:43) But a lot of it has to do, much of it has to do with bringing in disciplines from other (24:48) industries. And we've implemented that in operation. (24:51) So, Reef today has a set of checklists that everybody from our asset managers to our (24:56) property managers, to our lawyers, to our accountants and our marketing teams, everybody (24:59) uses.We brought that on from aviation. (25:03) We started using tools like Footprint for training, which is something that I've learned (25:08) in the military. So, we were able to hire people and literally give them a form that (25:11) says, hey, you need to go train on these things, go meet this guy in this room number.(25:15) But we've implemented so many tools into some of the data analytics tools that I have (25:21) seen in my other work. (25:24) We've implemented that in Reef. (25:25) We have a whole set of dashboards on Power BI.(25:27) We can drill down to every single one of our assets and see if it's one of our hotels. (25:32) I can tell you what the daily rate was last night in any one of our hotels. (25:36) And I can do all that from my iPad being anywhere in the world.(25:40) Those are things that are not really customary in real estate, but they are very customary (25:44) when you run a multi-billion dollar transportation business. (25:48) So, our ability to kind of borrow disciplines and tools and procedures and quite frankly, (25:53) ideas and people from other industries is one of the things that made Reef very, very (25:57) successful. (25:59) Really impressive.(26:02) Well, I could honestly talk to you forever and kind of ask (26:06) questions about this and swap notes. (26:09) It's very inspiring and aspiring to try to achieve (26:13) that level of trust with institutional investors, that level of assets under management. (26:18) I mean, you don't achieve five billion in assets under management with an average IRR (26:24) that starts with a two, you know, 20s.(26:27) That's insane. (26:28) And it's something we preach all the time on the podcast is that you (26:33) need to do a retirement calculator at 15 and 20 percent and really get (26:38) motivated and inspired to invest in and build wealth. (26:42) So, to hear how somebody based in Dallas and we're so close to where we are (26:47) with very normal people, Jeff, you seem like a normal guy, you know.(26:53) So, it'd be above average intelligence, but. (26:56) Yeah, absolutely. (26:58) Through decades of experience and going through life with purpose, (27:03) you know, going through life with your list and doing things how they're supposed to be (27:07) done, not subpar.So, anyway, it's inspiring. (27:09) I think hopefully it's inspiring for the people listening to this, that billions (27:14) and billions of dollars is on track to have an average IRR of above 20 percent. (27:20) You've done it for so long.(27:22) And again, don't get me wrong, this does not happen overnight. (27:25) And I don't want your listeners to kind of take away. (27:27) This is not a lottery, right? (27:28) You don't start doing something and get to billions of dollars overnight.(27:31) And this is not I'm happy to be the focus of this podcast, but it's hardly just me. (27:35) There's 500 people that work for this firm. (27:38) A hundred of them work with me on the same floor in our corporate headquarters.(27:41) It's a team effort. (27:43) Unless you surround yourself with very good people of all different types and sizes (27:47) and disciplines and skill sets, that it's going to be virtually impossible to achieve. (27:52) Right.So we have everything from acquisition people that know brokers to phenomenal (27:57) marketing people, to phenomenal lawyers. (27:59) And it's not like we don't make mistakes. (28:01) We do.But when we do make a mistake, in fact, when we accomplish any transaction, we (28:06) always debrief it, right? (28:07) Which is another concept that we brought from military and aviation, where we kind of (28:12) get together in a room and what we call a safe environment, like nobody's being (28:15) penalized, nobody's getting fired. (28:16) We just want to debrief what just happened, what we did well, what we didn't do so (28:21) well. What can we do better next time? (28:24) And I'm talking about a negotiation.(28:26) We will debrief that about a transaction, about a capital raise, about a CapEx (28:30) expenditure. We'll debrief it. (28:32) We'll say, hey, guys, what have we learned from this? (28:34) And we'll put that in writing and disseminate it to the team.(28:37) So the reason I'm saying all that is because when you do that, when you when you (28:40) adopt that kind of approach, then over time, right, over 10 years of working together (28:45) with good team members and some people come and go, but there's very little attrition (28:49) debrief. It's you know, 99 percent of us are the same guys that were there 10 years (28:52) ago. Then you really start to kind of work together as a team and you really start to (28:57) kind of quadruple, right, the effort, right, because everything that you do is in the (29:02) magnitude.And that is really the key to how we got here. (29:06) It did not happen overnight. (29:08) Nice.I would agree completely, actually, hearing that you do have such a low (29:13) attrition rate. You know, 99 percent of the team is the same team that was there a (29:16) decade ago that that I would say, if you have that going for you at your company, (29:21) you're bound to achieve some sort of success, you know, working together as a team (29:25) for a decade. That's that's powerful.(29:27) Yeah. I've been in corporate America and I typically there's a lot of turnover. (29:31) So that's really impressive.(29:34) Yeah. And a lot of it is about managing egos, right, because there's always people (29:37) who think that they should do more or they should be getting more. (29:40) And, you know, obviously it's easy for me to lecture when when when I happen to work (29:45) at a very successful company, not not everybody is that fortunate.(29:47) And I'm not saying there's not good people in companies that are not successful. (29:51) Of course, there are. (29:52) But grit is a big part of it.(29:54) Right. So, I mean, once you quit, it's over. (29:57) The stats are broken.(29:58) But it's.