Fifth Wall’s Post

Transcript

Life requires new technology, new solutions, growing. I love that. I want to adopt that. I simply want to do it in a way that has its best chance of productivity. It's not about being busy, it's about being productive. And they couldn't be more different. I'm here with Don Wood, a Federal Realty, our newest strategic partner in Fifth Wells funds. Before we jump into why 5th Wall and how this relationship came about, tell us about Federal Realty, the history of the company because you have such a unique proposition amongst the reeds. You know, obviously I'm biased, Brendan, but it's a great company. This is a basically a shopping center company that started in 1962. It's one of the oldest rates in the country that tries to get the best shopping center locations have. The best merchandising and tenancy involved. In some cases we're able to densify the piece of land to to include more than just the retail on the ground floor, to include some office, to include some residential. What we're about is high quality real estate and I like to think we're leading edge company because we're actually not that big from the right perspective. We only have about 105 properties, but they're generally big for shopping centers. When Americans think of shopping centers, you think of the average. Shopping center is about 125,000 square feet. We're about double that. What we try to be is the best player in each of the markets that that we're in. But it's one of the reasons that you and I are talking because I really see the importance in what it is that you're doing right now. It sounds like. And I guess that's my question is why right now is, you know, I've wanted to work with federal. I think it was probably pestering you in the early days of fifth law and I'm not an early days kind of guy, man. So let's let you get your feet wet. Let's see how things play out and what they work. But this is a different time. One of the key things I think that 5th wall is doing right now, that was really important to me is combining three of the most important technological initiatives really in the country. It's property technology, what you've expanded into climate technology also along with artificial intelligence. I mean, AI's a big deal. So to the extent technologically you've got a window into each of those three areas, how in the world could I possibly as a real estate company have the ability to see what it is? That you see on a day-to-day basis, if I do that, I'm not doing my job. I'm not operating and buying and disposing of and building new retail product. It's an interesting perspective that federal and your team has that self-awareness because in the early days of 5th wall, a lot of what we got back from real estate companies was we can do this ourselves. We see all these technologies we get pitched every day. Why would we outsource this? What's what's your answer to that? Oh, it's really clear man. And I am a simple, simple guy. What our core. Competency is, is the ability to put retailers together so that the sum of the parts is greater or the whole is greater than the sum of the parts. That the notion of being able to do that from a leasing perspective, from an understanding retailers perspective, from understanding real estate and where the trends are happening with respect to that, that's what we do to dilute. Part of that effort effectively to it to try to understand the the myriad of possibilities ideas small companies in the earliest stages of of frankly all three of the disciplines that you're talking about would would dilute the company. Don't do that. Outsourcing is an important thing, if you will, for those important concepts are important parts of the future of the business That doesn't require that level of discipline. Then focus that you obviously have to, in order to be successful for a real estate company that has to be excellent in a whole other domain. That just seems like a really heavy lift. But to some extent, investors want you to have that insight. Do you get asked this a lot by investors? Yeah. I don't know if investors to want you to have that insight. Investors want to know that you're approaching whatever problem, whatever, whatever change is happening. Intelligently, you know the simple question, what are you doing with respect to AI? What are you doing with respect to protect? That's that's asked all the time. I think a lot of times on the principal side, you feel like you need to have a specific answer to that. I run a big company. I don't need to have a specific answer to that question in terms of if I'm an investor, it's important that in my case would understands that this is a transformative bit of technology. This is a transformative time. It's in the very early stages where any of those disciplines are going to go. And accordingly, how are you approaching it? The 5th wall solution for us to me made absolutely the most sense with respect to risk and reward. Pretty darn low risk and potentially a very high reward. You know, if you go back and taking it back to 98992000, thewhole.com start the whole beginning of the proliferation of the Internet, the same thing was being asked of all the real estate. Meaning that you were getting questions from investors about how are you dealing with this new thing on the Internet? And a number of companies in our space would make specific DICOM investments, choosing, picking in the early days, they were speculating on the market how many of those companies made it. Not a lot, right? And so to me, there's a lesson there. It's one that I remember well. And it just doesn't make sense to me because it's not our specialty. It's not what we really do well. And if you lose sight of what you do well, whatever your business is. Whatever your focus in life is, you're going to be mediocre, and I have no interest in mediocre. One of the other things that I think is such a big opportunity for real estate is that I actually think really well located real estate is almost underpriced because investors aren't perceiving the energy and data value inherent in well located real estate. And there's obvious opportunities, whether it's generating your own energy with solar on your rooftops or monetizing it with EV charging or micro grids or virtual power plants or batteries in your basement. Do you see energy as being a big part of your business in the future? I don't know if it's, I hope, I hope it's a big part of our business in the future. You know, the EV charging stations are really funny. I, I, I, I hated the Tesla calls that I would get for chargers early on because Tesla looked at it and said, gosh, you know, we're doing you such a big favor. We'll put our charging stations here. Won't that be great? Those customers that are sitting here for four hours will shop in your stores. Minor numbers. They're not going to impact. Anything my real estate is more valuable than that. There has to be a way to to effectively monetize that in a far more important way, better way than there is today. Technology may be able to do that. So those models are changing. You know, we talked before about whether we want to be the first with respect to a new technology. I can. Categorically say no, no right, especially in a lot of the areas of technology that we're talking here that are in the first inning of of, of their lifespan. Well done. I am just so excited as you know I've, I've tried for a long time to work with you all we're gonna you know they're they're getting started the level of talent that you guys have been able to attract we're pretty impressive and certainly the ideas and stuff that's going on it validated for me that there's no way to do this internally for federal. We would be less effective and more distracted. I don't get the trade off we're so excited to work with. Thank you, appreciate it. Alright.