Allen Morris - Building Luxury Commercial Real Estate - South Florida and Star Metals

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If you're interested, visit Northspire.com. Again, that's Northspire.com. Now back to the show. Hey everybody, uh, we're doing something a little different this season. I'm gonna try and give kind of my immediate thoughts of a conversation that we we've just had. So we actually just had Alan Morris into the studio. This was, I believe, our longest episode we've ever done. It was about an hour 40 when we

hit stop on the record. Um, but a very special conversation. We covered a lot of things. Uh Alan is is now the the chairman, but has has run the Alan Morris company for decades, and his son Spencer is running it now. At some point, we're gonna have Spencer down, but um Alan just brings decades of experience of real estate development. We talked a lot about quality of the developments that they're they're putting out. Um his company is responsible for star medals

here in Atlanta. They really have a whole district on the West Midtown Howl Mill kind of area. And we talk about you know this new Ladybird concept that's coming, talk about phase five and six, and maybe even seven that's coming. Um, but they've they've blown it out of the park. They are fully leased at the Star Metals office building now. And um we get into a lot of a lot of good stuff. So I hope you enjoy this conversation. We're trying new things. Uh,

if if you have questions for the developers that are coming on this this podcast, please just put them in the comments. We'd love to um help, you know, bring bring your voice or bring your questions into the conversation. So with that, I hope you enjoy this and uh stay tuned for more. Hey guys, welcome back to Sunbelt Developers. We are on episode two of season three, and we've got Alan Morse with the Alan Morse company here with us today.

Very, very excited about this conversation. Uh Alan and his company have had a significant impact on West Midtown here in Atlanta, but even more significant in Miami, Coral Gables, and the Florida markets, which I think I just confess, I don't know Florida super well, so I'm excited to learn about that. But um Alan, I I'm just really, really happy you're here. And I know we put this on the calendar a couple months ago. So welcome

down to the studio. Great to be here with you. That's be great. Um, so right before the cameras got going, we were talking about some some new developments that are happening in West Midtown. They were talking about Ladybird. Yeah. As this, so this is uh I I'll flip it up on the screen here. I I didn't know where this was. I saw some some update on Instagram, but um so so you got star metals here, and then like right around the corner, this is the

new Ladybird location. That's right.

That's right. That's the former warehouse. We've blown out this the roof of it and turned it into a ladybird concept, uh, like the Ladybird on the belt line. Yeah. And uh it'll should it should open next month.

Okay.

And uh it's gonna be a very, very fun beer garden, restaurant, gathering place, and it's right across the street from the new Stella at Star Metals apartment tower. Yeah. Uh which is um It's not shown right here. It just was recognized in the uh with the award for the top architecture in Atlanta.

I mean it's um it's amazing. I've been what's the the club at the top, or it's like more of a minity space now?

Well, we have Rabbit Ears, which is a uh which is a club on the 17th floor that overlooks the skyline of Atlanta. And it's really interesting because there's there's a lot of rooftop things and uh and and um uh upper story uh venues in Atlanta.

Yeah.

But when you're in West Midtown looking back into the city, you see the city in a whole different way than when you're there looking out. Yeah. And so from this vantage point, you can see downtown, you can see midtown, you can see Buckhead, you can see Stone Mountain, you see everything like in one giant panorama uh from this vantage point. It's really

dramatic.

Yeah. What so it was originally, wasn't it like a private club, and then y'all opened it up?

Or yeah, it was originally a private club. Now it's just part of it's part of the Foom restaurant on the ground floor. Okay. We have a Michelin star restaurant on the ground floor, which is northern Italian and is an outstanding restaurant. Great mixologist, with a turntable and a disc jockey just for music. It's just, you know, it's got a fun vibe and a coffee bar outside. So you can come into

the lobby. The lobby kind of blends in with the coffee bar. Okay. And that's kind of what we did with with uh each of our projects is we we like to create a a welcoming food and beverage experience as a part of the lobby of our multifamily apartment so that you come in and you kind of feel like you've walked into a boutique hotel uh and it just happens to be uh an apartment building.

Yeah. That's special. I I know I remember going there for an event up up at the the top level and rabbit ears. Yeah, rap rabbit ears. I gotta get that in my my nomenclature. But um, it does. It feels it feels like an upscale hotel. And you gotta remind yourself, it's like, no, people live here. This is these are apartments. Yeah. Um well, great job. Uh also congrats. I I hear y'all are 100% leased at Star Metals.

Star Metals office building is 100% leased now, and uh, which we're very grateful for. I'd I'd love to say it's because uh we're so clever. But what happened really interestingly is it's really an example of how our new mission statement just completely changed what we do in our business. And that that came out of, as I was mentioning earlier, it came out of my having

getting burned out, having severe headaches, taking a sabbatical for three months uh that turned into a three-year sabbatical, um, and I that I ended up writing my book about all in. Yeah. And part of that was the story of uh redeciding together with our executive team what we wanted to be as a company. And after having developed 78 projects, we said,

you know, what what would make us excited about reinventing the Alan Morris Company? And we reduced our mission statement to three words inspire, impress, and improve. We would not build a building unless it inspired us. It doesn't matter how profitable it was, we will pass. We want to impress people with the excellence of their experience in our

project, and we want to improve the lives of everyone we touch. That's a high aspiration, but but we may I mean that. We really want to improve the lives of the neighbors around where we develop, of the community in which we build, the city in which we build, our architects, our engineers, our suppliers, the people that we work with. We want to improve

the lives of everyone we touch as best we possibly can. And with uh Star Metal's offices, uh, we didn't want to build a typical Atlanta office building. We wanted to surprise people and inspire people. And so we designed a building with juxtaposing floors, with overhangs that created shared,

rather shaded balconies and outdoor terraces and workspaces, and curated gardens on every floor going up 15 stories. And I just wanted to do something that would knock people's socks off. And yes, it was absurdly expensive. It was ridiculous. And actually, uh we overheard a broker in

Atlanta when we were under construction saying this building is gonna go bankrupt. There's no way Morris is gonna make this building is just dead on arrival.

I I heard those those comments too. And there was a lot of ho-humming about the loss factor. I think you all it's like a 25% loss factor.

But you see, we've I've we've spent sixty-eight years developing office buildings. Yeah. We've got a lot of experience building office buildings. We built 23 office buildings in Georgia before we ever built this. Wow. I know. So so uh we understand the nuts and bolts of office buildings, but more importantly, I feel like we really understand the feelings of our tenants. And what our

tenants want is something great for their employees and for their being able to recruit the best talent. And in order to do that, you want to create a wonderful experience for them to live and work in. Because people spend more time at the office often do than they do at home. Yeah. And so uh that's that was what was behind this outrageous design

of Star Metal's offices. We didn't know COVID was gonna happen. And when COVID happened, not only did people just go home and leave their offices, but when it came time for them to come back to the office, they wouldn't consider an office unless it had fresh air. All of our floors had fresh air, open air terraces and gardens. And it was

it was what they wanted. Wow.

So what when did y'all deliver? Wasn't it like 2021 or 22?

Yes, around then.

Okay. Around 2021. Yeah, I remember touring. The worst possible time. Yeah. I think I have a picture of like my my business partner, Doug, at the time. We were we were on one of the terraces and we like literally had masks on with like hard hats. It was just yeah, it was just the time that we're in. Everybody's wearing masks. Um, but yeah, well, well done. Um, I think before we were talking, your son helped you kind of decide this was the spot.

He was over there and what y'all were walking the site. Yeah. Do you remember what what was the site before?

Well, what we were looking at first uh first of all, we were looking at building one multifamily apartment building. And um we were assembling uh an impossible to assemble site that everybody wanted to buy. And it was it was difficult, but we agreed to relocate a tenant that had just built out his his uh

auto uh maintenance and body shop and relocate them to a different location, build them a whole new uh shop, a whole new building for them, and so that we could get this site to build uh Star uh Metals Residences, which is now known as Central, with the when we recapitalized the project, changed the name to Central. But

as we were as uh as I was thinking about proceeding with that project, um I brought my son Spencer to Atlanta and I we walked down the sidewalk in West Midtown, and it was pretty scruffy then. Uh a lot of industrial uh and not much not much nothing for what I would consider class A. And um I told him what I was

thinking about doing and I asked him what he thought about West Midtown Atlanta, and he he said, I didn't know there was anything this cool in Atlanta. I said, You're serious? He said, Oh yeah, if I lived in Atlanta, this is where I would want to live. I said, Wow, okay, well, there's my market research from the next generation.

Yeah, wow.

And so we built, you know, the first class A multifamily apartment building with a really cool coffee shop and gathering space in the lobby with the idea of creating an experience so so you feel like you're you're walking into a boutique hotel in a gathering space um that's actually an apartment building.

Yeah. What was the conversation with Northside Tavern? I know they're they have a you know key corner right there.

And I went to Georgia Tech.

Okay. Yeah, yeah.

You can't And Northside Tavern is sacred. Yes. You you do not mess with sacred. Okay. Um people, so many people's lives weave in and out of Northside Tavern from the Georgia Tech. So there was never even a thought. When I was in oh yeah. My my number one concern was to be sure that nobody hurt Northside Tavern, that

we protected it and preserved it as a sacred institution in West Midtown. Yeah. But in getting to know Tommy and the people at Northside Tavern, you know, part of the back of Northside Tavern had fallen apart and is like, you know, um it's like a dump back there. And um, so we arranged and have arranged and are in the process of creating

uh uh a taqueria and um uh bar in the back of Northside Tavern. Cool called the Ruins. The ruins good marketing. We're protecting and preserving the gr the grittiness of Northside Tavern, and it will flow into our outdoor cafe tables in our paseo for Central.

Nice.

And we're bringing in Y Bar. Yeah, we can bring this up on the screen and you can you can actually see how this works. There's the uh there's the Star Metals residences, and there's Northside Tavern. Okay. And you see the abandoned part of Northside Tavern behind it. Is it this? And that area is what we call the ruins that's being developed by uh Y bar that'll flow into the the

Y bar behind it and uh and uh create all this will be activated next to the Salty, and uh all that is coming and we'll be is this this is you right now it's under construction right now. Yeah, cool. That's that's being done right now. It's gonna be a real funky, cool, authentic space. Yeah. And one of the things that in a in a slick packaged world, we love things that

are historic and authentic and just cool.

It's Northside Tavern.

It's sacred.

Yeah, well, well done. Well, uh yeah, min many nights at Northside Tavern. It's a great, it's a great spot. We need to we have uh we have two young kids, so we don't get out as much as as we used to. And we we had uh number two was like three weeks ago. So wow, congratulations, Dan. Thank you. We're we're finally getting out of this tornado of of new baby mode. But um but yeah, no, they're they're amazing.

You'll sleep again someday, just trust me.

It'll happen. We were talking about it earlier. Um I am I'm on the couch. I'm I'm sleeping on the couch now. But um shout out to my wife, she's doing amazing. But um But yeah, well well done, man.

This is uh I'm really excited to see, you know, kind of that next so when when so the funny thing that happened here, I'll tell you, when we were assembling uh the the the all this block for Star Metal's residences called Central, um we really wanted to buy the junkyard across the street, which was the metal reclamation yard. And uh

we had uh after many, many meetings with them, uh had signed a letter of intent and agreed to buy it, agreed on all the terms, and then our dear friend that owned it had a heart attack and died. And we didn't hadn't finalized the contract. So it went into his estate and we then had to work with the family

and the heirs to finalize the contract, which we did. And our intention was to protect and preserve the in the the vibe of West Midtown.

Yeah.

Uh and so that metal reclamation yard was called Star Metals. So we decided what better and more authentic than to name a one and a half billion dollar development after a junkyard. Very fitting.

So that's how it got its name. Got it, got it.

Well, so I mean, how how much of a delay was that once it got it's like I feel like that would push it back a year or two just to I mean uh the whole thing when you're doing infill development like this is you have to pivot and then pivot and then pivot and adjust and go through the time consuming pain that institutions can't do. They have to

buy shovel ready sites. A lot of the institutions do, a lot of the REITs, and so but we we we will work with deals that have hair on them. And if we think that the the property is so great and has such great potential.

Yeah.

And so that's what we've done here with with Star Metals. So phase one is Star Metals residences, phase two is um Star Metals offices, phase three is uh Stella at Star Metals, phase four, is uh Ladybird uh at Star Metals, and then we're planning uh right now uh a hotel, another multifamily apartment tower on

Howl Mill Road, uh-huh. All right. And uh it'll be a condominium hotel, and uh we're already selling units.

Jeez.

I didn't know that actually. That's yeah, is that that's out there?

Well, yeah, that's why you're that's why I'm here. That's why you're thanks for thanks for okay. We have a cool tool here. Um we so you can go back in Google Earth like satellite timing and and I'm gonna show just what what that site looked like. Oh great.

We were doing this. Back to the future, huh?

Yeah. Uh right, close that, close that. Um bring this up. What's the timeline there? And if y'all plan on breaking ground soon?

Well, um right now we're going through the the uh sales process for the condominiums to the for the hotel. Um and it'll be a condominium hotel combined with a multifamily apartment tower. And um that'll stretch all the way all the way from 11th street across. And um and that'll be our

uh uh fifth major phase of Star Medals. Wow. And uh and then we have a sixth phase which will be um bringing in another uh tower uh which will be right next to Stella on the site of uh Ladybird and we'll relocate Lady Bird. Got it. Okay. In the middle of it, we're creating a one acre

park. Where's that? It'll be a botanical garden.

I thought like that.

Um between 11th Street and uh 10th Street. Okay. Um Yeah, what's this road right here? It's like a service road. Yeah, that's a that is a that is uh edge hill. Edgehill drive. So it'll be between 11th Street and Edge Hill Drive. In the middle of that big block, we're putting a one acre botanical garden and we're planting a like a uh like a a greenhouse in

the middle of it. So you can walk through wander through the greenhouse and with tropical plants in the middle of the winter in Atlanta. Wow.

Do you all have any renderings or or anything? We do. We do.

I don't think we have them with us, but uh we haven't published them yet. Okay.

But uh it's all I didn't know this was like there was phase five and seven and twelve, and I didn't know we were this this is amazing.

I think it's quite a big project when you know as as it is evolving and continuing to add phases to it.

Yeah. Okay, I'm flipping back. That's 2010 feels right. That that feels right. Okay, so yeah, you can you can see that's that's a metal. That's it.

Star metal star metal's um reclamation yard. Wow. The junkyard. And uh these were the like five different owners in this block that we had to put together uh to in order to build uh and we were never able to buy the architect's property. And um I met with them and told them that we'd pay them a a million dollar premium over the market value, and

they wanted five million dollar premium. Jeez. I'm sorry, but um Which side is this? Uh this is the there's a little there's a little uh building, an L-shaped building right there. Uh no, that's uh right. Oh, this one right here. Uh-huh, yeah. And uh two architects own that building, and uh they they wanted a premium for it. I said, well, we we cannot wait. We will design

around your building. I would much rather buy your building and pay a premium for it. Yeah. But um they um they felt like you know they wanted uh they wanted a big premi big, big, big premium for their building, couldn't justify it. And I said, Well, let me know in 30 days. After 30 days, we're gonna start drawings, and we you're architects, you understand. We won't be able to go back. There's no turning back once we start

the design process. So we started the design process, and about six months later they called me and asked me if if they'd like to talk. I said, It's too late, can't do it. So you see Star Metals residences now and it's a USA building all around their little little office building that they still got.

Well, good for the you know, I mean, what else could you put there after that?

Everybody has the right to make their own decisions.

Yeah, yeah, that's right. Um Okay, so so a lot of work. What do people not understand like Like I'm I'm in office leasing, working with companies, trying to help them find space. I don't do a lot of entitlement work. I don't we we're we're working on a build a suit right now, so I I kind of get I'm kind of dabbling in your world, but like as far as putting a site like this together, I mean you're having to everybody's under NDAs, you're having to stay quiet, and yeah, it's it is a whole

I mean how long did it take from you know the first conversation till when you had it all together? Oh my gosh, it probably took two years.

Well two years just to assemble assemble the property and countless. And then probably took an extra nine months to build the new uh uh European body shop and uh uh maintenance shop, which we moved them to Howlmill Road up the street. Okay. Uh to relocate them. So um

uh we we were able to ultimately sugg he would absolutely not sell, and he had a pretty new body shop he had just built that we could give him a better location with more visibility right on Howlmill Road and relocate him and then build that out before we could get his property to demolish it and build um Star Metals residences. Wow. So it's a lot of trouble

to go through but in the right location, and it turned out the timing turned out to be great, the uh interest rates were great, the cap rates were great. Sure. And um and uh we we capped out at a two hundred million dollar sale.

Man.

So who owns it now? Uh it's now owned by a um private uh investment firm.

Okay.

When did that transaction It was uh what about about uh three years ago, four years ago?

Yeah.

Um all right, I'm just I'm flipping forward here just a little. So that's 2014. Hey, real quick, if you have a growing company with constantly changing real estate needs, please give me a call. My team and I work with groups across the country on finding new office spaces and warehouse space. I put my personal contact info in the show notes below and we'd be happy to chat. Now back to the show. Just want to see just when construction

go. Yeah, yeah. All right, that's 2016. I bet you probably have a lot of it committed. There's Westside provisions going up, some of those appointments. 2018. Here you go.

Okay, here we go. 2018, we're well under construction, got the foundations in.

Yeah. There's your little L-shaped building. Oh, and y'all okay, I didn't realize y'all went at the same time with the office building. Uh-huh. Was that like the same same day or no, no?

We we we were just doing we were doing some basic site work and we were remediating a huge amount of um contamination on the site. Got it. So it was a huge brownfield site. And what happened was we had to dig out so much of the dirt and and uh and haul it away that we thought, well, since we've had to dig out so much of the dirt, why

don't we just have uh underground parking? You're already there. Yeah, instead of hauling in dirt, yeah, we just we had just prepped the site for an underground floor. So we have a retail parking down beneath and like a lower lobby where you can come in to go to the restaurant or retail and easily come in and park or valet park and um and ride the elevator up

to the main lobby or up to the retail.

What do people not understand about the brownfield component? Like ha you're having to have experts come out there and test test the dirt and yeah, it's it's huge undertaking.

Yeah.

So it's like any shrapnel of metal or like what are they what are they looking for?

Well, they're looking mostly for contamination of the soil. Okay. Uh because when they would haul cars and batteries and things like that, all of this liquid would leach into the soil and go down into the soil. So you have to haul away all the soil with all of the liquid contaminants that are in it. Got it. Uh the acids and things that are in that soil. So if you're building on it doesn't get into the groundwater.

Okay. Okay. I was about like if you're just putting a bunch of concrete on top of it, why does it make a difference?

But it's got to be that's why they're protecting the groundwater, which is an important thing to do and a good thing to do. Trevor Burrus, Jr. And right next to the water reservoir. So that makes a lot of sense to me. And then you you have here where we're we're finishing up construction on uh Starmetal's residences here, uh and we're beginning uh foundation constructions for star metals offices

because we've already uh we've already got an anchor tenant uh for the building. Yeah. And they want to go ahead. So we're we're moving ahead. It was interesting because after after so many years of developing so many office buildings, uh we had the benefit of having credibility. People would trust us. We've never not delivered

on any building that we have promised to deliver. And so um all we had was a sketch. We had a preliminary rendering of the building, and they said, okay, we'll sign a lease. Wow. So and what we delivered was better than the sketch. Sure. So we kept improving it and tweaking it. And we'll do this a lot during the development process. We're we're working on our uh a new project right now in

Coral Gables where we have a beautiful building that the neighbors came before the city commission and said, You must approve this building because it's going to be the most beautiful building ever built in Coral Gables. Well, they approved it unanimously, and now we're improving on that. We just can't help ourselves.

What is this called? I I need to see what's this what is this building you're do you have rendering.

Coral Gables.

It's called it's called uh s um Pont's Park. Pont's Park Residences. There you go.

There it is on the left. That's it. Pont's Park Residences. And um this is this is what was approved by the city commission and what the neighbors loved, and we're improving the tower. We're making it even more grand and elegant and improving the details at the entrance even more than this. Um and we're selling condominiums in there for between five and fifteen

million dollars.

It's pretty good. So pretty good rate. What what what's the per foot price?

Uh about uh about eighteen hundred dollars a square foot. Wow. But that's that's uh cheap compared to our Coconut Grove condominium project called Stella. Okay, we're gonna do that. Called rather than not Stella, called Ziggorat in Coconut Grove.

Oh, we saw that. We were actually talking about that earlier.

Ziggurat is already sold out. Uh and we're just starting construction. Um This is a really cool Ziggurat is uh the the the latest condominiums at Ziggurat is sold out at twenty two hundred dollars a square foot.

Oh my gosh.

Now over on the right are the three stories of luxury condominiums overlooking a park that is a city park that we are privately redeveloping for the benefit of the city and the public. And on the left is an off the office building, a hundred thousand square feet of office space, with a Michelin restaurant on the rooftop and a separate Michelin

restaurant on the ground floor. So we got about forty-five thousand square feet of retail, a hundred thousand square feet of office, and nineteen bespoke condominiums.

Wow. So you said these are sold out?

Yeah. We just sold the last two. Jeez, what kind of office rates are we talking? Office rates are about two hundred dollars a square foot rent. Net? Um what about $170 a square foot net.

Wow.

Um I'm geeking out. I can't believe I can't believe this in my lifetime because you know, um we were leasing office space in Atlanta and our buildings here for like $17 a square foot or $20 a square foot. Sure. You know I mean starting out with some of y'all are sixties.

Yeah, we're about sixty-five now. Yeah, yeah, yeah. But not not $200. I don't nobody's touched a hundred yet in it.

As a matter of fact, um we just had uh uh a fellow lease his um family office on Brickle Avenue uh about three year m about two miles, three miles from here, uh for $250 a square foot for 18,000 square feet. Jeez.

I I we heard there were some some numbers getting thrown around. Um I've I've heard New York has some that are touching three, a little over three hundred now.

They're they're pushing it. They're trying, they're asking.

They're asking yeah, they're yeah, asking.

They're asking. So that's what's happening in Manhattan. But this people are talking about Miami as being uh Wall Street South. Yeah. We have Citadel moving their corporate headquarters onto Brickle Avenue from Chicago, just just leaving the the business hostile environment for a business friendly environment. Right. And he's building a two and a half billion

dollar headquarters. 90 stories. And we're planning we're planning residential towers on Brickle now that are 90 stories.

Put a put the units next to this headquarters building or around it, or I'm sure he's got a premium site. What a cool building. So when when we're talking design, obviously Star Metals has a a you know very asymmetric, very different look. I mean, are you coming up with some of the obviously you have architects that you're working with? Or do you have ideas?

Actually, the same architects that helped us design Star Metals um residences, Star Metals office, and Stella is Oppenheim. Okay. Uh an international award-winning architecture firm based in Miami, uh, they designed this project for us. And uh we work together with them. We're doing a lot of our preliminary

design on ChatGPT in-house, where we're playing with ideas and then giving it to our architects and saying, What do you think about this? Yeah. How can we make this idea better? Yeah. And then they come up with something better.

Wow.

Uh they're very creative architectural firm. And in each community, we want to design something that that is appropriate for that community. For instance, in Atlanta, the star metals are all about the industry. They're they're basically upscale industrial buildings of different colors of industrial metal

to hearken back to the history of Atlanta. And West Midtown was always the center of industry in Atlanta. This is where all the trains came in. This is where the stockyards were. This is where the factories and the foundries were. This was this was the gritty industrial heart of Atlanta. And so what we're doing is celebrating that history. I don't know if you know this,

but our family's seven generations Atlanta. Didn't know that. I happened to be born in Miami, but my mother and father were both born in Atlanta and going back seven generations. Oh, like Civil War? Like era? Like way back. Wow. Yeah. I mean, I have the my great-great-great-grandfather wrote about what it was like being in the Civil War in Atlanta. And and um and uh what it was like after, and he started his hardware

store in 1852, and and King Hardware Company was my great George King was my great-great-grandfather. Okay. So when did you go down to Miami then? Uh well, my mother and father went down to Miami in 1947 when they were recruited. My father was recruited to come down and help this fellow that wanted to retire run his real estate business. He said, I don't know anything about real estate. He had

an advertising agency in Atlanta. He said, Well, come down to Miami and I'll teach you the real estate business. And so my father ended up becoming president of the Kai's Company, which was the largest real estate brokerage firm in Florida, headquartered in Miami, and then realized what he really wanted to do was develop and own office buildings. And um, so he started the Alan Morris Company to

develop to and own office buildings and manage office buildings and broker commercial property in 1958. And so I took over in 1978 as president of the company.

Yeah, I'd love to that's probably a great segue. Like your your background. Okay, so you you went to Georgia Tech, and then you just kind of grew up around real estate, and this was just it's kind of in the water.

I mean, from the time I was a little kid, my father would take me out to construction sites, and you say, Alan, you see that you see that concrete pour over there and you see that steel sticking out of it. That's rebar. And they put the rebar in the wrong place. And they're gonna have to come back here. This is on Sunday afternoon after church and lunch, we'd go out looking at development sites. You say, you know, uh, we need uh they I'm gonna have them fix that Monday morning. Wow.

So when we'd inspect buildings, he'd take me with him to inspect buildings after hurricanes and storms and say, uh, they're gonna have to fix this. They're gonna have to put a new roof on here and look at the windows leaking over here, and here's where, you know, you know You're just in it. So you logging construction sites from a as a kid.

So yeah, that's I I so I I know you have this love for flying. I mean, a bunch of different passions. What was it always real estate, like real estate was gonna be the thing, or did you I don't I don't know. What did you study at at tech?

Um I studied two things. I studied uh business and I studied psychology. Okay. So I got a degree in business and psychology at tech and minored in finance and minored in marketing and minored in English literature, which I was the first person to ever do that at Georgia Tech. Uh English literature. Um but I wanted to get a broad education. I was frankly afraid. I went to the

Macaulay School in Chattanooga, where I got a wonderful education, and I'm now on the board there at Macaulay School as well. But I chose Georgia Tech, but I was concerned that I would get too much of technical education and not a broad education. So I I didn't want to end up highly trained and uneducated. So I kind of crafted

my own educational experience at Georgia Tech. I didn't plan on falling in love with physics, but I did. Uh, you know, being around all those geeks, uh, I became a geek. Yeah, yeah. I loved it. And so my father thought it might be interesting for me to learn to fly. Okay. And I thought, cool, I'd love to learn something new. So I joined the Georgia Tech Flying Club. And I hadn't planned

on flying falling in love with it, but I did. Yeah, yeah. I got addicted. Yeah. Uh just being in the air, the freedom of flight, and and I've been hooked ever since. Yeah.

So I think we were yeah, so we were talking before. So you you had a plane. So I mean, you've probably had multiple planes that you cycled through. Yeah. Any any favorites?

I don't know planes, but yeah, I uh I I I started off with a Piper Saratoga TG, uh turbocharged Saratoga, and then moved up to a Malibu Mirage, a Piper, then moved up to a Pilates PC-12 turboprop, and then became a captain of my own Phenon 300 MB Air twin jet. And uh flying at 45,000 feet at 500 miles an hour

is very cool. Sure. I wanted I was in naval ROTC, and all I wanted to do when I graduated from tech was to fly Tomcats off of aircraft carriers. Cool. That's what I wanted to do. I couldn't pass the eye test. Oh, it's like there was no LASIK back then. And I I wore contact lenses and I couldn't pass the eye tests. So then they had a lottery. Uh I I decided, well, if I get a low lottery,

I know I'm going to Vietnam as a naval officer. If I get a high lottery number, I I'll drop out of ROTC and I got a very high lottery number back then. And um so I decided, well, I guess I'll spend a couple of years learning the family business in Miami before I go off and do what I want to do and and then decide what I want to do. And so I spent two years in the banking we were also

in the banking business, two years in the banking business, which has been served me well understanding banking. And then two years in the real estate business, and then I discovered I really like the real estate business. I love developing projects and creating and the idea of designing, imagining um and creating uh new buildings and uh putting deals together. So

uh that became my my uh my passion.

That was it. So you didn't did you do any brokerage or you just went straight into development?

I I did every job in the company. I started in the accounting department doing cash flow projections on green spreadsheets with a big eraser and a pencil. Back in those days.

Yeah, what year are we talking?

Oh gosh, that was like 1970 uh seventy-four. Wow. 75, 76. I got out in 74. I was supposed to graduate in 74, but I had a plane crash. And um I was taking off out of Fulton County airport one night with six passengers um to go to a wedding, and I took off at eleven o'clock at night, and at four hundred feet climbing

out over Six Flags Amusement Park, the engine died, went completely silent. And um that's a sound that pilots really do not want to hear. Sure. That's silence. That's a bad sound. Yeah. I remember what Woody Allen said, I'm not afraid to die. I just don't want to be there when it happens. Oh I was able to at

400 feet, if you lose your power at 400 feet, you cannot turn the plane to get back to the airport. Because when you turn the plane, you lose your lift and you will you will crash. Just fall. You will you will you will lose your lift and you'll slide to the ground and crash. Okay. So I had to find something ahead, and I saw the lights of a tractor trailer in the dark uh going by, and I thought

that must be I-20. I'm gonna see if I have enough glide distance to get over the treetops to get to I-20 and then turn and glide in for a landing on I-20 behind the tractor trailer. Well, I made it over the treetops. The landing gear went through the leaves in the treetops, just barely made it over. And I turned, and then my landing light reflected off a

big green and white highway sign that said exit six flags right in front of me. So I had to pull up to keep from crashing into the steel sign, and then that used up my airspeed, so I had to push the nose down to regain airspeed so I wouldn't stall, and just put it down wherever I could, which was the rolling hills along the side of Interstate 20. And uh the landing was fine. But what I didn't know

is up ahead in the dark, they had a guardrail that came up out of the ground to keep cars from going off into the Chattahoochee River. And we hit the guardrail in the left wing route, which burst the left main fuel tank that I had just filled with 100 octane AV gas.

Jeez.

And uh the plane twirled around, slid sideways on top of the guardrail seventy feet, and bathed in one hundred octane av gas, and with all the electrical on, sparks everywhere, and it didn't ignite. It should have blown up in a ball of fire, but it didn't. And uh I was able to climb out of the plane to try to get the passengers

out, and um the pain from my I felt like I'd been bayoneted in the back. I just said, oh, you know, lowered myself in the grass. I had broken my back and didn't know it, and my lower half of my body went numb. And uh so I was paralyzed from the waist down. And um ended up everyone survived. Well uh I was hurt the worst. I had to go through three spinal surgeries, and

on the the first two didn't work. The third one worked, and they they grafted bone from my hip into my spinal column, put me in a body cast for nine months, and I learned to walk again. So just a casual trip to a wedding. Wow.

How how old were you?

I was twenty-two years old at the time. Twenty-two, okay.

I'm imagining like you're a grown man, like thirty-five or something.

I was still at Georgia Tech. I was a student at tech, so I was three weeks away from graduation, so that delayed my graduation for another year. So I graduated um uh into the next year.

Well, that is uh kind of that's miraculous. I mean that's that's amazing, y'all.

I I'm one of the few real estate developers you'll meet that has no problem with handicap requirements in my building. So you're like, I get it. I get it. I get it. Wow.

Let's make them better. Yeah. Okay, so just casual conversation about man, that that is so wild. How long was it before you you got back behind the the helm?

Well they cut the body cast off of me and then put a hyperextension back brace on me. So I went to the FAA medical examiner with my back brace on. I said I'd like to take my medical exam.

Yeah.

And he passed me. I went back to the airport wearing my back brace and I got my multi-engine rating. Wow.

I guess, yeah, once you're you're doing those those different levels.

Fall off the bicycle, get back on it.

Yeah, you gotta keep going.

Yeah. Man.

Um All right. So you're 22, uh, you're you're flying planes, you're you're about to graduate, um, and then you're you're doing all the stuff at at the the family business. I guess what what was your first real project that you you got your hands around?

Oh, that's a good question. Um we were developing an office building for a Belcher Oil Company in Miami, Florida. And um it was uh we we had uh they had just my father and the head of our property management department had uh completed the lease negotiations with the tenant. And my job was

to see that the building got built and then to lease up all the rest of the space in the building. Because the the the tenant was going to take like twenty-five percent of the building, and then we were twenty five to fifty percent of the building, and I had to lease the rest of the office space. So uh I had to put the f get the arrange the financing on the building, which was an interesting time because that was around 1979,

78, 79, and um I had been through all the other departments of the company by then, and uh I decided I want to be conservative, I want to negotiate a triparty agreement on the financing, where we would have traditional bank financing for the construction and then have a takeout with an insurance company. Uh I just thought it would be a good idea to lock that all in.

And um I didn't know what was coming, which is a lot of this whole business is you never know what's coming because all of our projects in this business are three to five, six years in the making, and the world changes in that amount of time. Well, what happened was interest prime interest rate went to twenty-one percent. We forget that today. We complain about interest

prime interest rate being five percent, six percent, eight percent. Well, it went to twenty-one percent. So you can't do anything. In nineteen eighty. Wow. And so I'm developing this, uh finishing the development of this office building, leasing it up, trying to get to my rental achievement clause target where where it would kick in the permanent loan, and I'm paying interest at 21%.

And that's very painful. Jeez. And you just have to endure through it, right like we've all been enduring through the higher interest rates now that we think are too so terrible because we perform at everything at 3% interest rates and they went to 9%, or you know.

Yeah.

Um so we endured, and then by the time we um I reached my rental achievement clause, I called the National Insurance Company of Vermont and said, okay, it's time for you to fund the permanent loan, which was a 10% 30-year fixed rate mortgage loan. Can't believe that existed at one time, can you? Yeah. And um

and uh uh they didn't call me back. And I'm calling them and saying, hey, what's going on here? You know, we sent you a notice to close. I get the guy on the phone who's the head of real estate at the insurance company. He said, We don't have the money. I said, You don't, you don't what? He said, There's been a run on all the life insurance loans. Everybody with

whole life insurance policies were borrowing against their life insurance policies at 3% interest, which was written in their life insurance contracts, because that was the cheap money for them to get. And it drained the insurance company of all of its money, and it drained all the insurance companies across America of their money. And I said, Well, you better get the money. He said, Yeah, yeah, we're gonna get the money.

And somehow they got the money and they ultimately closed. Wow. But it was that's what happens in the world when interest rates go up beyond anything anybody imagines. And the domino effect. The domino effect. So all of those learning experiences as a kid in the business have served me well. Sure. And even though

it's been painful going through these interest rates, which were two or three times what we projected on our multifamily projects and the office building, uh Star Metals projects, um, it's nothing compared to what we went through back in 1980.

Wow. Okay, so you you were able to close that loan. I mean, after that, were you like like glad that worked out? Or I don't know how how was the the heartburn or maybe you already had another project. Yeah, yeah, sure.

So good. That's right. Um and so you know, we put it to put that to bed, didn't have to worry about it anymore. Yeah. Went on to the next project.

All right.

That's what we do in this business. Aaron Powell That's right, yeah. And you're at nine ninety-two, ninety-three? How many projects are you in? Uh we just finished uh stellar Stella at Star Metals is our ninety-second project. Ladybird, when we open it next month, will be our ninety-third project.

Okay.

And uh we have projects right now uh under construction in Coral Gables, in Coconut Grove, in um Sarasota, and uh we uh we have about a dozen other projects in our pipeline, about 3.35 billion in our pipeline right now. Wow.

If you've developed anything, you know this one. The forecast and budget lives in one spreadsheet, the draw package lives in another, and somebody on your team spends the last week of every month stitching them together into a report that's already stale by the time it goes out. Northspire was built by a real estate developer to end that. One platform for budgets, forecasting, draws, scheduling, and vendors across

every project you've got. Northspire has facilitated more than $500 billion of projects. Please visit Northspire.com. Again, that's Northspire.com. Now back to the show. Okay, and when you when you say this is our 93rd, you count it as 93 when the ribbon is cut. That's that delivery. Okay. I guess there's delays that could happen and there's all sorts of project things. Okay. So what I mean, what

are y'all seeing out there from I mean, we we've had, I don't know how many have we done. This is probably number 26 of these conversations. And a lot of different developers, they have different looks at at certain things. Some of them have come in here with, you know, they're on cloud nine, and others have, you know, they've stormed a couple of storms. And there's other developers that are like, I I can't talk to you right now. Like we've we've had some that are like, yeah, come on. I've had years like that. Yeah, yeah. They're like, call me

in a year. I got I got good stories for you, kid, but we're just not in a in a spot to to talk. Yeah. Yeah. So uh obviously 200 bucks a foot is is great for an office building. I mean, where where are y'all seeing opportunity? And yeah. I mean, what what are your thoughts on on the market at home?

Well, um right now, Miami is probably the hottest um office market. And uh uh uh Miami and Miami Beach and West Palm Beach now are also and we're planning a multifamily apartment project in West Palm Beach right now, too. Um uh and we've developed

in all of these markets around Florida, but it's a just a different world now. It all the numbers are different. Uh the economy is different. It's it's like a whole different world uh now. So uh at these higher interest rates, it makes sense to develop in the right locations, and we're planning new projects on Brookle Avenue uh as well as in Coconut Grove. And one of the interesting

things that some was mentioned to me as I was coming in this morning is the the pressure on schools because people want to move uh their companies and their executives to Miami and Palm Beach, but they need to have good quality schools for their families, for their kids. And so we're also developing

a new school. We haven't developed schools before. We're developing an alpha school in Coconut Grove right now is um one of our upcoming projects. And um we're developing uh condominiums, more l luxury condominiums in Miami as well as multifamily apartments as well as office space. So um

the some things make more sense than others in different markets. Sure. But multifamily is uh can get overheated in certain markets. Uh it got overheated in Atlanta. Yeah. Uh so our our rollout of of our uh multifamily at Stella was a little slow at the beginning because there was so much product in the market. Now that's being absorbed. Now our you

know we expect to be be uh fully leased in Stella by by the spring.

Uh so good. Um what so are y'all looking at any other pockets of Atlanta? Actually, yes.

We're we're uh we're planning uh we are planning a project on the on the belt line, on the east belt line. Okay. Uh and we're also uh planning a project on the west belt line uh on w in West Atlanta uh on Hollowell Road. Okay. So Hollowell Parkway.

Yeah.

Are those under like where where are those at in their life cycle? You got the site. Right now we had we had uh uh we originally had planned to develop uh across the street from the Microsoft headquarters, HQ two has a lot of people evaporated. Yeah. And so uh then we we had uh received uh interest and uh and were working together with the

uh Atlanta Union mission. They wanted us to develop a project uh with them on that project. There's been a lot of noise about that one recently. And it was it I it looked like it would it would be a good thing for Atlanta and a good l thing for the Atlanta Union mission, but uh people in the community wanted to see something different than that. Yeah and so now we're working

on pivoting again uh to a third concept where we believe that with uh with uh subsidized uh financing that we can develop beautiful, moderately priced uh multifamily uh housing and uh mixed-use retail and create something really special there.

Uh so we're looking forward to that, and we're in the planning stages for that now.

Cool. How how often do you all dip into public-private kind of developments?

Aaron Powell Well, actually, a lot of things in Florida lend themselves to that, uh where we're doing things that are either um uh that are under the live local law in Florida, where if you develop a certain percentage of your units as 120 percent of uh adjusted uh income, uh target uh rental

rates, that you can get rebated um 75 percent of your real estate taxes. And so uh we will do a lot of projects, what we call we do market rate, which is luxury apartments, and but we'll also do what we call luxury workforce housing, where we have all of the amenities, beautiful fitness centers, community rooms,

uh food and beverage, and swimming pool and pool deck, and it's luxury workforce housing. It reduced rates, and we make a certain a large percentage of those units that are the same as the other units, they're not dumbed down, but where we give beneficial rent to people that qualify, we get a rebate on the real estate taxes and it makes the deal

pencil out at the bottom line. So is that that's the majority of the project? Sometimes we combine that with CRA. Okay. Uh and sometimes we combine that with HUD financing, and um so it makes sense. Very cool.

So I've I've got a bunch of notes here. I've a lot of notes. Um my my team is Luke or drop your gun. Yeah. They've said you need to ask more acquainted questions, Tim. And uh and I have some. I has I'd love to just throw some at you. And some of these are are for the layman. We we put a lot of stuff out on Instagram, and um, there's a lot of people are just curious how development works. And so some of these might be, you know, you're you're going back

to your early days or kind of learning the the basics of real estate, but uh I might I'm I'm excited to get your take on some of these. Okay, here's here's one. Uh when you're driving around a city, what do you notice about different real estate that the average person completely misses?

That's a great question. Because my wife doesn't understand what I'm looking at when we're driving in the car together. That's right. And I say, well, didn't you see this or that? No. No, uh no. So you you you're you're trained to look for different things. Yeah. For instance, having gone to school at Georgia Tech, having twenty, I think twenty-three

family members living in Atlanta right now, two of my daughters live in Atlanta, grandson in Atlanta. Um I I love Atlanta. Always have loved Atlanta. It's always been my second home. Um but I'm always looking at things in Atlanta that are boring. And we see some new projects

that are exciting and inspiring, but there's just a handful of them to me that really excite and inspire me. So I look at Atlanta and said, I want to do something in Atlanta that no one has ever seen before. I want to do something a little outrageous, maybe a lot outrageous, that is really cool.

And so I look for areas that have the potential. So two things are what architecture can inspire people and get their attention? And secondly, I look for areas as as if I'm an outsider coming in, looking at Atlanta and seeing why has this been overlooked? Why has nobody ever done anything with this?

In West Midtown, you're like blocks away from 20 million square feet of office space with a huge interstate highway that exits right there.

Um and four blocks from the Georgia Tech campus, which is an economic engine all of its own. You know, it's like a huge economic engine for Atlanta. And all you got is taco shops and Class C apartments. I think there are people that would love to live someplace really cool with really

cool restaurants and really cool vibe without being in the institutional predictable uh cluster of boxes that you get in Midtown. The cookie cutter boxes. The cookie cutter boxes in Midtown. Um and so uh that's an example of looking for something that everyone else has missed.

I love what you said a second ago about as as an outsider. I I think we've all felt it where you you go on a trip. I especially if you go over to Europe and you see all this amazing architecture, when you come home, just that there's there's a couple hours of you just kind of driving through your city, like you kind of have this like critical take of okay, we're back. Obviously, you love where you live, like you get people or whatnot, but it's such a fresh look that you have.

And uh no, I I like that.

Well, Europe is a really great example. I love that you brought that up. Um when I was I was I was a late arrival. My mother and father did not expect me. And um, so when I was 10 years old, my uh sister was like 11 years older than me, and and um it was um uh they wanted to travel. He was my father was finally successful enough where he could take a vacation, and they

wanted to go to Europe, and they said, What do we do with little Alan? He's 10 years old. And my mother said, Well, let's take him along. He's adaptable, and let's see how he does. And so I had my 11th birthday in Lisbon. And I was from the time I was little, they took me with them to Europe and Asia, and I saw the palaces and the cathedrals and the the

beautiful architecture of Spain and and Portugal and Italy and Germany and England and France, and it was like, and then in Asia. Um and uh I was always inspired by that. And I always was inspired by getting ideas, stealing ideas,

and and and you don't have to have a lot of original ideas, but taking things that you've seen that other people have done that is beautiful and creative and figuring out ways to improve on it and adapt it to uh the United States. Yeah. And um my father, I I observed my father do this, and and he was always looking for opportunities in areas that people had overlooked.

Back in back in the 1960s, he decided to build a speculative office building on there's the first speculative office building on Brickle Avenue. And Brickle Avenue was mostly residential, old estates and little hotels. And and I remember his friends teasing

him in 1968, what are you doing building an office building on the wrong side of the Miami River? He said, Well, I don't know, it's really beautiful over there. It's not as congested as downtown Miami, and I think people will like having their offices there. Well, the b the speculative office building was leased up before he finished construction.

Wow.

And it's become the densest population south of Manhattan today. Brickle Avenue? Brickle Avenue. Wow. We bought I remember him not buying the land behind the office building that he needed to buy to build a parking garage. And they he blew up in the office. He said, a dollar a square foot? Nobody's paid a dollar a square foot for Brickle land.

Well, now our land on Brickle Avenue is three thousand dollars a square foot.

Just the dirt. Just the dirt. Jeez. I was gonna ask so your dad, what what was his MO? Was he he seems like an opportunistic kind of guy? I mean, what what was his I mean, was he always out looking for the next thing and kind of a visionary type person?

He was a visionary, yeah, he really was. He he loved to imagine what's possible. And um, you know, I just I marinated in that environment of imagining the the uh what's not here that could be here. Uh imagining things in technology, imagine he went to Georgia Tech also. And uh imagining things in

technology, imagining things in um uh in the built world, imagining what it would be like if we could do this or that. Yeah. You know, like his imagining what if I became a pilot and could fly him around on his business appointments, you know? Yeah. So I said, okay, cool. You know that was his idea. It was his idea. Wow. And um and then I I became hooked and became a jet pilot,

you know. So who would have thunk it?

Yeah, yeah.

But uh just being open to new ideas. Sure. Um, and um and I think that a lot of that is uh makes what we do in real estate development so much fun. My son Spencer, who's now president of the company, and he's 35 years old, um we we have so much fun

um doodling. Now we doodle on ChatGPT. He sends me his idea, I send him my ideas. And just to think about what we could do here that would be really, really cool that nobody's ever seen before. That is so much fun. That gets my motor running. I get I get chills just thinking about it. Yeah, I get so excited. And

and one of the things we talk about is can you believe we get to do this? That we get to design these crazy ideas and actually build them? Who gets to do that? I mean, we're like the luckiest people in the world.

I'd say so. There's a lot of people that are they're just the you know, not to throw shade, but the the cookie cutter kind of developer, they just that's their business. They've that's how they they haven't had the margin to to get creative and go above and beyond. But I mean, y'all have such an amazing track record that I guess you you feel confident in what you're doing. And I g so that I guess that's a question. How how are y'all able to consistently

obviously it's you want to work on something you're excited about, but to punch above and to do stuff at such a higher tier, the finish quality, the architecture, like why are more people not doing that? I think words out now, it's the flight to quality, and yeah, everybody knows it's like, okay, if they something nice, like people will come. Why are they afraid to do that?

And well, you look at you look at um my son came up with a quote he's teaching me now. My son came up with a quote that really knocked me out of the chair that I'd never thought of it this way. He said Value engineering increases your risk. All these Buildings

that are designed by and approved by committees in New York by some institution are tried and true formulas. Build this glass box, put marble floor on the lobby, and stainless steel here, and this is a class A office building. And that's what people did all around Star Metal's offices and they're all vacant buildings.

Why? Because they're boring. They were built by a committee instead of passion. People feel passion. The first thing that could that came out of my sabbatical when we rewrote our mission statement to inspire, impress, and improve was our headquarters building in Carl Gables, which is inspired by the cathedrals

of Spain from my childhood. Cool. Okay? When I was like eleven years old.

What building is this?

Alhambra Towers. See if you can pull that up. How do I spell that? Alhambra Towers. And it's inspired by the Cathedral of Sevilla, the Cathedral of Lyon, and the Cathedral of Córdoba.

Córdoba. I like how you read that part there. Look at that. That's it.

That's a hundred and seventy-five thousand square foot office building.

Yeah.

And each floor is named of the seven office floors, each office floor is named after not just numbered, it's named after one of the cathedral cities of Spain, famous for its cathedral, the Cathedral of Leon. Cordoba. I'm on the Leonardo. Santiago de Compostela. Yeah, yeah. Uh Granada.

Most more people speak Spanish than English in Miami. I guess that's a good point. You have to adapting and Spencer is uh fluent. Wow.

Um so office then responsible.

So the the lower floors are parking, but we made them look like they're they're like apartment windows, but it's parking. And then the upper floors are the offices. Okay. And uh we've won ten awards for that building. Wow. Including the top commercial development in the staple state of Florida.

Congrats.

What what year was this delivered? Uh we delivered this in 2002.

Okay.

And uh it was two years after I started my sabbatical in 2000. And this was the one where I'd I had you talked about building utilitarian buildings. My father built lots of utilitarian buildings, and I am so grateful for that. Because I couldn't do what I'm doing if it wasn't for what he did.

Yeah.

I am building basically on his shoulders by building things, learning the nuts and bolts of the business. So I know the nuts and bolts of the business, it's kind of like improvising as a musician. Yeah. Once you learn the basics of your instrument, then you can improvise. Right. Well, knowing the basics of the business, we can now improvise.

Yeah. You need mastery before you can get creative.

Exactly. Yeah. Exactly. And so this is an example of what we do now at Alhambra Towers, and where every building from this point forward, we want to inspire people with. And and we discovered, yeah, and people said the same thing at Alhambra Towers that they said about star metals. The broker said, there's no frigging way he's ever going to get those kind of rents.

This build he's going to go bankrupt. This building is going bankrupt. Yeah. He spent like 50% more for this building than he should have spent for it. And it was a for me, it was a matter of passion. I said, I may go bankrupt on this building, but I've got to do it. It's my passion.

Yeah. Like I I can't die without this coming to fruition. You know?

I in a weird way.

That's how I felt about this podcast. I was like, I just have to, whether it's a a failure or not. And I mean, well, so far we're still, we're still going. But there's something that happens in you where it's like, somebody's going to do this, or I just have to do it. There's like this this conviction that you you feel. And that's amazing. I I I also I'm a big fan of if if you like something, there there should be other people that that like it. If if you're passionate

about it, then hopefully there's other people that that find it as well. And this is a great, great example. What kind of rents are y'all getting here?

Well, now we're at in Alhambra Towers, uh, we are at um uh $70 a square foot. Okay. $70 to $70, I think $70, $72 a square foot.

Aaron Ross Powell And your office building, we're talking about a the the apartment central, you'll you'll traded what's the the MO with you know the rest of your portfolio? Are you all you build and hold or is it usually well sold?

About fifty-fifty. Okay. Um we um we have some investors that invest alongside us that want an internal rate of return. Sure. And get out of the thing. So we we plan on selling upon stabilization. Okay. And we uh the other half uh want to own long term, and I would love to hold everything long term and sell nothing. Okay. But we cannot we cannot resupply

our capital for the next project unless we harvest some of that.

Yeah.

So half of it we sell and harvest the capital, roll it into the next project, and the other half we hold for long term. The things we're putting FHA financing on, we're planning on holding long term. And um so in this office building, we still own a hundred percent of it uh from having built it in two thousand two.

There's something about owning that one. Yeah. So so raising capital, are y'all uh we've had people come in here that are kind of of the Heinz mindset of you want your capital partners to have deep pockets. And I'm curious, what are y'all are y'all family office or you go to institutional?

Good good question. Um actually we have the a full menu. Um we have uh major life insurance companies, we have um uh private equity groups, we have uh high net worth families, um uh U.S. investors, uh international investors, Latin American investors. Um

so we have investors from Mexico and South America and the United States and some institutions and some family offices.

Most development teams don't have a data problem. They have a timing problem. Something goes sideways on a project, and by the time it reaches the forecast, your only options left are a change order or a contingency draw. NorthSpire is the development intelligence platform that closes that gap. Budgets, forecasts, draws, and vendor data connected in one place. So your team sees the exposure while there's still room to act. Built by a

developer for developers, Northspire.com. Again, that's Northspire.com. Now back to the show. So your involvement with that, are you you flying out to go see them and raise more capital? Actually, yeah.

Actually, my next trip, uh my next trip on that is to Italy. We're partnering with uh with an investment group in Italy, and uh we're planning our 90-story 1,048-foot tall multi uh condominium tower on Brickle Avenue with Lorenzo Piano, probably the most famous living architect in the world

today. Are there renderings? That's a tall tower. Yeah. Wow. We have to get FAA approval because of Miami International Airport. Okay.

Yeah. So 1072, we we did a a tour of that. That's the the Rockefeller building here in in Midtown. Yes. And I mean that goes to 55, I believe. Yeah. And I just remember my hands just dripping with sweat going up the buck hoist on the side of that. I cannot imagine going up 90 floors.

Yeah. Actually, our our SLS Lux Tower on Brickle is 57 stories. Yeah. And um uh I was walking that construction site with my son, and uh, you know, you gotta put on the vest and you gotta put on the hard hat. And it's just in the summer it's really hot wearing that silly hard hat. Oh, yeah. But I thought I'll wear it. And um we went up to the top floor and we're looking at and went back down to

like the the amenity deck on the seventh floor, and a piece of concrete falls off of an upper deck, I don't know, fifty stories above me, and hits right on the top of my hard hat. It would have killed me. Oh, yeah. Yeah. Yeah. Just bounced off. Jeez. I'm a great believer in wearing the hard hat on the

construction site. Yeah. But you get up to that height of 57 stories and you you're in a different world. Oh, yes. It's it's very exciting being in the buck hoist, isn't it? It is, yes.

I just I think I remember like looking out and I I was getting nervous and I I looked at like the number notching up and it was like 35, and I was like, oh, we're we're like just over halfway. We got a well, whenever y'all you'll get under construction or you top out, we we'd love to come down and I mean if we could if we could ride the buck hoist up to 90, I think that would be a lot of fun. Absolutely.

We'd love to have you come down for that.

Well, good deal. Okay. I think you talked about this. Were developers cutting costs today that you think they'll regret in 10 years from now? I think you kind of hit on that if you want to add any more.

Yeah, I think I think when you sacrifice and that's that's what that's what my son Spencer said. Um value engineering can increase your risk on a project. Yeah, it lowers your capital cost. But when you double click on that.

Like what do you mean by is that what you're just saying?

When it lowers your investment, you save money and your construction cost by cutting things out. Yeah. But if you take out what excites people and inspires people and makes people say, Wow, you take out the wow, you increase the risk that you'll never be able to lease the building because you just removed the wow from the apartment

building, from the office building. Uh and so it it you think that you think it's going to reduce your risk by lowering your investment, but it increased the risk by increasing the the probability that you'll have trouble leasing or selling uh the project. Yeah.

So the reason this whole thing was cool has been nerfed.

You take out the cool to save money. Yeah. And what do you got? You got the same thing everybody else has got. The number one thing in any project is market differentiation. You want to be different. Not just different, but better different, more inspiring different. And so if you take that out, you you value engineer that out to save money, uh, you're competing on price like Walmart

rather than competing in a market where you can make things great and and push price and charge a higher rent instead of a lower rent. So, you know, our rents are pretty high, for instance, in Stella, but it's worth it. It's really cool. I mean, you've got cascading plants and landscaping on your balconies.

Yeah.

Um you don't have that anywhere else.

Yeah, I was gonna like what are what would you say is your special sauce? Like we we had Mark Toro come in here, was talking about Medley and their their little valet loop. They have like a ballet station. There's a fireplace and the ballet station, and he was so adamant about it being real wood in that fireplace and not just some gas-lit lamp. So he was like, the details, that's that was his big thing. I'm curious, like what as far

as developments, and I mean you've talked about architecture, you know, refining it and increasing. Like, what what do you all think?

Well, you'll see a fireplace with fire in it in the lobby of Stella. Um I love fire, I love moving water. Uh every time I can put fire and moving water in a project, I'm gonna do it. Just I love I love the feng shui of it. Uh the whole feeling of life of moving water and fire. We have a beautiful fountain inside the

lobby of the building here. Yeah, I wonder. And we have a beautiful fountain out in front of the there's the fountain. Uh yeah, this is a rendering, but there's the fountain right there. And we also have a big fountain with an obelisk in front of the building. Did y'all y'all actually put these stained glass parts of the channel? Interestingly, there was a church on the site. Uh, that's a cool little link. That was been

there for 50 years, and they had closed the church and given away the pews and the hymnals, and um and uh uh I wanted to buy it as a as a development site for uh our project, and they asked me if I would be willing to create some kind of a memorial for the church that had been on the site for so many years in

whatever I built. I said, I would be honored to do that. Uh the church was famous for two things, particularly in the community. One was the beautiful stained glass windows that told the story of the 23rd Psalm, and the other was the carillon that the church had uh with beautiful music that they played in the church tower, in the bell tower of the church. Well, I I asked,

can I pay extra to buy the stained glass windows from the church? And they sold them to me, and those are installed in the lobby that tell the story of the 23rd Psalm. And we have a brochure in the lobby that you can pick up and take that's a brochure that we created to sell nothing. That's just what tell the story of To just tell to explain the art and inspiration

of Alhambra Towers and the meaning of each one of these stained glass windows. And then in the tower, the westerly tower of the building, which is inspired by the Cathedral of Sevilla, the the Giralda Tower of the Cathedral of Sevilla, we have a working bell tower that plays the same music that the church played every hour on the hour.

Um so do the office tenants have any issue with the sound, or maybe they just know it's coming?

They they it's just part of it's part of the background music. Part of it. Of uh being in the community.

Yeah.

So very cool.

Okay. What what makes Atlanta so fundamentally different from South Florida as a development market?

Well, there's there are um Atlanta is is particularly interesting because there are no boundaries. You can expand Atlanta and north, south, east, and west. Right. It Miami, you can uh only expand north and south and up. You have the Everglades to the west, you've got the bay to the east, so the only thing

you can do is go vertical. And you can go down to the south, you can go up to the north, into Fort you flow into Fort Lauderdale and then West Palm Beach. Um, but you you run into the Everglades and the Bay on east and west. So uh it's a very dense city uh by definition. And so uh that force is vertical construction. Um

there's a lot of similarities between Atlanta. You know, Atlanta was created because of the railroads. The North-South Railroad and the East-West Railroad met to create Terminus Georgia, which we now call Atlanta. Um and uh and it's been built upon transportation because of Atlanta Railroads and then Atlanta Airport.

Miami has the largest passenger cruise port in the world by a factor of like 300% or 400 percent, and the largest international airport in America, back and forth between JFK. Um and so you have the transportation being central to both, uh and uh

but just in a different way. International transportation and seaport transportation, and um and Atlanta with you know, air transportation and rail transportation.

Yeah.

So there's a lot of similarities with the things that make it work. Atlanta has the benefit of being more regionally centrally located. So you can reach everything in the southeast, southeastern United States so quickly and easily from Atlanta. So it's a logical distribution center. Um and it has the benefit

of the power generation capability of Georgia Power, which is uh which is a great benefit here in Atlanta. So that that has always attracted businesses for regional headquarters and distribution centers. Um uh Miami attracts a different a different type of distribution, um stuff that comes in from Latin

America. You know, interestingly, we have roughly 350 million people north of Miami that speak mostly English and rich capital resources and high technical capability. We have roughly 400 million people to 450 million people south of Miami that speak mostly Spanish with

rich natural resources and cheap labor, and then you have Miami with the second largest international banking center in America and the largest international airport in America. So it is the logical port of entry for capital and expertise to go back and forth for Miami and for regionally for Atlanta. So it's very interesting. There

Atlanta is one type of gateway and and Miami is another type of gateway, and that's why we love doing business in both Atlanta and Miami. Yeah. I've never heard that.

That's that's awesome. I I've uh my aunt lived in Fort Lauderdale forever. So we we went down there a ton, but I've never had the like full Miami experience. But come on down, I'll give you the tour. We come down. We we should. We'll we'll go down. Um okay. We've got just a little bit more time. Um oh, here's a good one. What's the most expensive mistake you've ever made as a real estate developer?

I would say probably uh buying the Hollowell property thinking that Microsoft was going to move in next door.

That's that's that's real. Um the the follow-up question is how much did it cost you? I I won't ask you that here unless you want to share it. A lot. Okay. Uh okay. If you could own one type of real estate for the next 50 years, what would you buy?

Oh, one type of real estate for the next 50 years, what would you buy?

Um I would say um luxury um multifamily uh with great accessibility and great community amenities.

It's a bulletproof asset. Yeah. All right. I think you're you're buying not just a property, but you're buying an environment. And you're you're either you create the environment yourself uh or you buy into an existing environment and continue to enhance it.

Yeah. I think it's great. Um there's one other question I was gonna ask you. Oh, okay. Here's so somebody mentioned this. What question would you ask the our next guest that's coming on the podcast? Uh and you're actually in a in an interesting seat because we have Kasim Reed coming in next Friday. We don't have to if you if you don't have a question that's that's that's ready, then that's from a Kerpal.

That would be the next question. You know, what what topic category?

Any, I mean he's uh yeah, we we talk we we're gonna be talking all about you know Mercedes-Benz and the belt line, and I mean he had you know quite a run as a mayor.

Well, I think uh I think um uh I know Casim.

And I think uh I'd like to know um how um the community is going to um provide the necessary um incentives to make it possible to provide moderate income

housing for this community.

We had the Live Local Act in Florida and combined with CRA and HUD financing, that kind of thing, it uh it works. Um you know what what can Atlanta do uh to really supercharge uh the delivery of needed housing in Atlanta that's affordable.

Did somebody write that down? I'll try to remember that. We got it recorded. That's a great question. Um what what have we not asked you that we we should ask you about? Any anything? I say we we've got the whole team here, or what have I not asked you?

Well, that's a good question.

Um I would say um uh what is more important than uh real estate?

And I think there's a lot of things a lot more important than real estate.

Yeah. Um Um after reading your book, I know you're you're you know a very solid Christian man and have had an amazing I don't know quite quite a whirlwind. I don't know if I I'm jealous of the whirlwind that you went through. Um but there's a lot of really good lessons.

Read the book instead of having your own plane crash.

Yeah. Right. That or or the headaches or all this. Um yeah, I I guess that's that's a question. I mean, how how does that how does your faith bleed into your business these days and and how has that changed over over the years?

Aaron Powell I would say that uh that my I I started off as an agnostic. Um I loved arguing with religious people because I felt like most of them didn't know what they believed and why they believed it. Yeah and were pr generally silly people. And I met some people that were um that were not intimidated by my agnosticism and my my uh cynicism?

Uh my cynicism.

Yeah.

And um they challenged me to reconsider the objective evidence for the claims of Jesus of Nazareth. And I said I said, well, yeah, you got a problem, because you're gonna start quoting Bible verses to me, and I don't believe the Bible. And they said, That's not that's not a problem. I said, What what do you mean? Your source document is not a problem? And they said, No, what we suggest is that you look

at the evidence for the reliability and authenticity of the New Testament documents. And I said, Well, that's a new one. Nobody's ever pulled that on me before. That would take a little bit of study, but why not? Yeah. You know, maybe I'll just do that and research the manuscript evidence and the historical and archaeological

evidence of the New Testament and the and the account of the life and and teaching of Jesus. And I did, and the more I studied, the more angry I got. Frankly, I got really pissed because this is not what I had heard from my professors in school. Um the the manuscript evidence for the New Testament documents is unparalleled. The archaeological

evidence. Uh one secular archaeologist said every time an archaeologist's spade touches ground and other skeptic is buried, because there's never been an archaeological discovery which has controverted any statement in the Bible. Well. Ever. I'm just talking pure archaeology. Yeah. Secular history, secular writings, the changed lives

of thousands and thousands of people that encountered Jesus of Nazareth.

And um so What season of life were you in when when you started digging?

I was uh I was just uh I was just starting at Georgia Tech. Okay. Yeah. And um it was uh I ended up writing a book about that as well called A Critical Look at Jesus, like Skeptic's View. And um and then then this book came later, which is uh all in how to risk everything for everything that matters, because all of us face times in our lives, seasons in our lives where we get stuck.

Yeah.

Where we're either stuck in our marriage relationship or we're stuck in our in a relationship with a friend, or we're stuck in our career, or we're we're we're suffering from depression, or don't know which way to go in our lives, and we just get stuck. And this is not unusual. It happens to all of us at different seasons in different ways. And so all in is about what did what do you do when you're facing

a crisis or you're stuck in some way, and uh you you you need to know how to see your way through to it. And um what I found is that sometimes you just need to un have somebody help you look underneath the hood of your own life and help you discover uh how you've gotten yourself stuck. And this is what happens with the all-in

men's retreats and the forums that we put on. We put on men's retreats. We just had one last weekend at our log lodge in North Carolina, and we have one coming up next month in our in our uh beach house in Key Largo, and um and then we have monthly forum groups that are closed confidential groups of like eight men, uh, or now we have women's as well, uh, where people

can uh have a safe place to be real and to uh grow and it's uh uh structured for absolute safety and um confidentiality and uh the healing that people experience is extraordinary, just extraordinary. Uh so I'm excited about that. And so that's the nonprofit that I created all in Leaders Inc.

Um that I do on the side uh that uh uh is a passion of mine as well as designing fun buildings, yeah. Is helping people with designing their lives.

Yeah. No, that's amazing. Um how much do you feel like it's fifty-fifty or I don't know how to do your time.

Yeah, I think now that I'm blessed to have my son who's smarter than I am. Yeah, yeah. Let him let him.

Yeah. How many do you all have on staff now?

Oh, we got about sixty people. We subcontract a lot out. We you know, our architecture is outside, our engineering is outside, our contractors are outside. So we do mostly uh construction management, leasing, and property management.

Yeah. Yeah, I know development companies are usually pretty lean to operation. Um yeah, just taking a step back, you're the first chapter of this book, the I love the title, it's a view from the top, and you're like in the spot, you're like, I felt like I had everything. I had, you know, family's doing well, business is doing well, and like and you know, there's stuff under the hood that maybe just you don't realize is going on. So um for

for everybody listening, the all all in book uh by by Alan Morse. When when did when was this published?

Uh 2022. Okay. So just a few years ago.

Yeah.

So as a matter of fact, the young president's organization, YPO, which I've been in leadership involved in that, uh distributed twelve hundred copies at their global leadership conference. Aaron Ross Powell So um and I'm speaking around the country. I was speaking to a YPO group in Australia this year, and in uh the fall I'm speaking to YPO groups in Prague and and Romania, and the book is being translated into

Romanian and they're rolling that out in November while I'm there. Nice.

So Australia is not close. So that's a that's a long flight. It's a long flight. Yeah, yeah. Um good well, Alan, thank you so much for coming on. This has been a real pleasure. I really enjoy getting to know you more and and hearing about your story. Thank you too. Um for y'all listening, uh, we've got a lot more coming. Please stay tuned. Like, subscribe, comment. Uh my people tell me that you need to do that for the algorithms. Um so yeah, if you're enjoying it, uh please share

with others and uh stay tuned for for more content. Thank you.

Thank you. All right.