In the last post we learned with James Chung about lease negotiation items that are important for national tenants, we discussed LOI’s, and reviewed what happens when a tenant goes dark. Today we are with Adam Carswell, a Director with Concordia Realty and a Business Development Manager with Asym Capital. He focuses on retail, mobile home parks and self storage. He is also the host of his own podcasts: Dream Chasers, and the Liberland Show, a podcast focused on the country of Liberland. Adam and his associates have done nearly half a billion dollars in repurposing and redeveloping transactions and syndications.

How do you find time to live?
I was going through a coaching session last week and talking about three topics during my conversation with the coach. She said that when you take a look at what you’re working towards, your legacy, your mission, it doesn’t matter what you’re doing, everything that you’re doing is all one thing. It’s all unified. It’s all tied together and it’s carrying you in the direction of you fulfilling this legacy, of you fulfilling your mission, of you obtaining your goals. And that was the first time that I had it explained to me that way. It was very relieving because I am someone that likes to do a lot of things and I normally am pretty good at it, and have a lot of fun with it. So my advice to anyone listening who gets a little bit nervous when someone says find your niche and get rich. It is possible to do a lot.

What is your business model? Why do you guys invest in the properties that you invest in? What is your strategy? 

My business partners at each firm go about things in different ways. Starting with Asym Capital, Hunter Thompson (the host of the Cashflow Connections Real Estate Podcast) focuses more on the syndication side of things, we look to partner with experienced operators, and as you can see with our track record, we really take our due diligence with operators and sponsors seriously. The level of due diligence that we do, not only on the asset or the deal that we’re going into, but on our sponsor at underwriting is literally what I would call next level. And that’s one thing that I’ve been fortunate to be in an environment like that, with someone who is this diligent.

Transitioning to Concordia Realty and Michael flight, we are retail focused, shopping center focused, and we look for opportunities to add value to shopping centers anywhere across the US. We normally will stay away from primary markets, but we do like secondary and tertiary markets. We like for our shopping centers to have a grocery store as an anchor, and at least one, and sometimes two discount stores in the plaza as well. So that could be a Family Dollar, Dollar Tree, Dollar General, etc. Drugstores are always good too: CVS, Walgreens. If we see a shopping center that fits that mold and is less than a hundred dollars per square foot, we will take a closer look at it, put it through our financial model, make assumptions and see if it will be a good fit for us and our investors.

Can you share with us why are you optimistic about retail nowadays? 
The first reason is that Amazon invested $13.7 billion into brick and mortar. That’s a lot of money! And a company like Amazon has a lot of data that they have access to, and the amount of information that they have access to is also next level. There are very few people that can make a move like that. Sears is also doing a few things in retail.

The second reason is when you look at life in general, and you look at trends, and you look at things that people gravitate towards, retail has had its moment of super success and it’s had its moments of no success. Kind of like what we’re going through right now, but it’s all cyclical. Retail has been around since the Roman Agora. It just evolves and takes a new shape and a new form. You had the general store in the 1900’s, and then you had Sears catalog, which killed that general store. But then Sears did brick and mortar after the catalog with all their department stores. Amazon is like the new catalog that came out and kind of killed the brick and mortar movement. But again, it’s, it’s just very cyclical.

Right now is the perfect time to start at least researching and learning as much as you can about retail real estate because it is going to make a comeback nationally, and it’s not going anywhere. It’s just going to evolve. That’s why I like it because everyone’s kind of looking, looking right and I get a chance to go last and uh, and if I’m wrong then hey, whatever, I’m living life, I’m living a good life, then it’s worth taking risks like this. So that’s my take on it.

Are there any areas that you guys are adding technology to your real estate investment toolkit? 
With Asym Capital, we have a mentorship program and I say it’s technology because everything that we do to facilitate the course is based around technology. There’s no way we could do the teaching that we do without the tech. And the same goes for us at Concordia. It’s not ready yet, but we are working on a mentorship program for retail and shopping centers that I know both me and Michael Flight, our principal, are very excited about. And so those are two platforms of learning education that would not be possible without technology the way we have it today. If you’re interested in taking either of these courses, you can definitely contact me after the show.

Let’s say we have an investor who has never done retail. How do they get into diversifying into retail? What are some top two or three things that they should be aware of that are very important to cover in the retail world? 
One thing that I got caught up in looking at shopping centers was that I was looking at a very high level data point, like cap rate. I’ll never forget a conversation that I had with Michael one time when he asked me “Why do you think I’m interested in this deal?” And I said: “Is it the cap rate?” He then answered “When have you ever heard me say something about a cap rate?”

What he was looking at was the price per square foot because there was an offering in Anaheim for $80 per square foot, which is very cheap, and the reason why it was so cheap, we found out later, was the shopping center was in a ground lease. You want to look for grocery stores, discount stores, even Ross, Marshall’s, Tj Maxx, etc. But beyond that, looking at things like price per square foot is very important. You know, you really want to focus in on what it is that you’re looking for specifically.

The other thing is in regards to an investor that’s new to retail, is it still comes down to relationships at the end of the day because everything that we do in regards to our deal sourcing and business and partners and this would really be for both firms. Everything has been 100% through someone that we know or have been doing business with for a while. Concordia has been in business since 1990, so when we need to find a deal in South Carolina we contact people that we know. You could still go on crexi or loopnetand maybe look for a deal, but it’s all super word of mouth. Building relationships with people who are in retail real estate is the best way to start. You guys can reach out to me for that first connection to retail.

Is there anything else that you can think of that we should be sharing with our listeners?
I would just say to make sure you subscribe to this show, if you haven’t already subscribed. Steffany is doing some really amazing things and I’m blessed to be one of the first guests on this show because I know that in a few years I’m going to look back and say “I was there first”.

Thank you, Adam!

You can contact Adam Carswell here:
carswell.io
adam@carswell.com
iTunes: https://podcasts.apple.com/us/podcast/dream-chasers/id1441685534
Spotify: https://open.spotify.com/show/0fqzz3iJS2uARrz4N6dlmN?si=1Yjisi-JSRK_1vRyU34JWA