On this episode, host Pete Moore reconnects with Jaja Jackson, a longtime friend and fellow Harvard Business School alum, for a deep dive into the intersection of real estate, hospitality, and health. Jaja shares his path from developing homes and communities, to joining Airbnb in its pivotal years, where he helped bridge the gap between multifamily housing and the (then) cutting-edge world of home sharing. Now a leader at ICONIQ Capital, Jackson discusses how his team has reimagined multifamily properties to boost net operating income and create vibrant, HALO-focused communities. (Health, Active Lifestyle, Outdoors.)
Pete and Jaja explore how many lessons from hospitality and flexible living can--and probably should--carry over into the health club industry—emphasizing the importance of relationship-building, curated experiences, and bringing on top-tier talent. They discuss the role of loneliness in today’s health crisis and offer actionable ideas for club operators, from employing inspiring staff to forming innovative partnerships with residential buildings. Jackson provides solid suggestions and practical takeaways from outside the industry that any club operator would do well to take seriously. Listen now for this fresh perspective on elevating the HALO sector.
On increasing the yield in multifamily without major renovations, Jackson states, "All you're doing is changing the operator and in some cases investing in furnishings to extend the value and the operation of your amenities in common spaces . . . that translates into an unlevered yield increase of between 1 and 5 or 6%. And it's tremendous!"
Key themes discussed
- Evolution of Airbnb and real estate partnerships.
- Creating flexible living asset classes for higher returns.
- Overcoming resistance and building trust in hospitality innovation.
- Strategies to enhance resident and member experiences.
- Importance of health, wellness, and community in living spaces.
- Leveraging talent (athletes, trainers) for cultural impact.
- Addressing loneliness and building genuine connections.
A few key takeaways:
1. Transforming Multifamily Real Estate Through Flexible Living: Jaja shared his experience moving from "traditional" real estate development to pioneering “flexible living” while at Airbnb and now at ICONIQ Capital. By blending hospitality concepts with class A multifamily buildings, he helped create new asset value and returns, boosting net operating income by 15–40% without expensive renovations.
2. The Power of Trust and Experience in Merging Hospitality & Real Estate: Initially, the biggest hurdles were skepticism and trust issues from large apartment owners about the idea of short-term rentals. Jaja and his team addressed this by building software and policies ensuring resident safety and a trusted experience, paving the way for programs like Airbnb’s Friendly Buildings.
3. Culture and Personalization Are Game Changers in Health and Fitness: Drawing parallels to the health club space, Jaja highlights that the sector is overdue for a hospitality-like approach—moving beyond transactional relationships to foster real community and deep personalization. He suggests health clubs can learn from hospitality by knowing members’ needs, supporting their goals, and making every interaction memorable.
4. Building Community and Combating Loneliness: Both in multifamily living and health clubs, facilitating real connections is crucial. Jaja’s approach includes encouraging residents to meet each other through fitness amenities and group activities, even integrating professional athletes as resident “ambassadors” to inspire and engage. He strongly believes in addressing not just physical health, but also combating loneliness and building social connections as a core part of wellness.
5. Talent and Ownership Mindset Are Critical: Whether in property management or fitness clubs, success hinges on having the right people—those who think like owners, have charisma, and are invested for the long term. Jaja and Pete both emphasize the importance of intentional hiring (“pay for talent”) and instilling commitment, suggesting businesses treat employee recruitment and culture-building as vital investments, not afterthoughts.
The statements by Jaja are not investment advice and do not represent ICONIQ Capital or Airbnb.
Resources:
- Jaja Jackson: https://www.linkedin.com/in/jaja-jackson-36832a57
- Iconiq Capital: https://www.iconiqcapital.com
- Prospect Wizard: https://ww
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
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(00:22):
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(00:44):
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Wizard. Go get him.
This is Pete Moore on Halo Talks nyc. I have the pleasure of bringing a
(01:07):
friend of mine from 27 years ago when we entered
Harvard Business school. Class of 1999,
Jaja Jackson. We reconnected at our
alumni event back in Boston several months ago and
he's been one of the leaders on the investment side in the
hospitality sector. So, zsa, good to have you on the
(01:29):
show. It's a pleasure to be here, Pete. Great to see you,
Captain Halo. Thank you, thank you. Yeah. H A L O.
So we're trying to replace the word wellness with health, active lifestyle,
outdoors, and my desire to become
a superhero at some point and get that award and take over Batman and
Spider Man's role in leading this industry is,
(01:51):
is where I'm headed. So I got my hat of EBITDA on. I know you've
created a lot of EBITDA over the years on the real estate side.
So can you give our listeners a little bit of background? Maybe talk about being
at Airbnb on the ground floor and now at Iconics Capital?
Yeah, sure, sure. So Airbnb, back in
2014, I joined the the
(02:13):
strategy and real estate function. There we were. It was
a very interesting time in the world where Airbnb had
moved from its startup phase into its
mainstream phase. It was still a private company
and Airbnb was trying to figure out how it could
participate in the world of class A, multifamily
(02:35):
and just apartments in general. And having done
14, 15 years as a real estate developer creating
homes, safe homes and communities for people in some of the world's
best cities, I was able to partner With Chip Conley,
who is a hospitality guru, to figure
out how Airbnb and the multifamily world could work
(02:57):
together. That then turned into an introduction to
iconic capital, where I'm on the team today.
And we created a platform that merges the very best of
Airbnb with the very best of multifamily living.
And that's what we do today. So when you took the leap
and worked for Airbnb, which now obviously looks like a no brainer
(03:19):
decision for you, was there an entrepreneurial cord that, that
struck at the time for you? Oh,
100%. Prior to
entry into the Airbnb world, I had created a startup
coming out of Harvard business school in 99. With my partner Jason
Palmer, we created a platform for colleges and universities.
(03:41):
So I had a taste of what it meant to go from zero to one,
work with venture capital, put a board together, build a team. We did all those
things, but prior to that, I had been working with really
institutional blue chips McKinsey & Co.
Emerald fund. So getting into the entrepreneurial
part of a very mature business like multi family
(04:03):
real estate or residential real estate was kind of a perfect
combination of experiences I had had and very
mature business businesses and then working with entrepreneurs
and what it takes to be lightning quick, figure things out, be creative
and invent. So it was a very special time.
And what you accomplished through that, obviously you
(04:26):
had like, permitting, you had, you know, local
communities that were kind of fighting against, like, hey, I don't want this. I don't
want my apartment complex turning into like a hotel at the
same time. Know, the way I looked at it is,
you know, we're living in the United States. You have property rights. You should
be able to, you know, take that property and do pretty much
(04:48):
what you want with it in order to generate ancillary income.
So what are some of the things that were like key takeaways or
learnings or like milestones? You're able to say, like, here's the problem
and here's the solution that we figured out strategically how to make this work
for everybody, all the stakeholders involved, 100%.
So let's break this response into two parts. The first part
(05:11):
is during the Airbnb years, that was about five years of,
of time where we began with some of the
largest multifamily REITs in America.
EQR, Avalon Bay, others like that. And we
really just sat down, I went into the offices and said,
hey, I think you've got an opportunity to make your residents
(05:33):
happier and to make more money. If you will
embrace this hospitality concept called home
sharing. And mostly what I heard
back was, we don't want to do that. And Here are the
12 reasons why. Most of them were fear driven. You know, many
of the people who were leading apartment
(05:54):
providers at that time had never actually experienced Airbnb.
Today, millions, hundreds of millions of people have,
but at that time, they had not. And, and of course,
when you, when you're running a 300 unit multifamily building,
it's a precious commodity. You've got to make sure that the hallways are always
(06:15):
right for the resident. You've got to make sure the asset is maintained. You got
to make sure things don't break. And if you have someone who you don't know
coming in for a night or three nights or a week or a month, that's,
that's a no go. So after canvassing all these
different blockers, what we were able to do is figure out
ways to respond to the safety issues and the trust issues.
(06:36):
That's really what it takes whenever you're merging two platforms,
hospitality plus anything, you're talking about people
engaged with product, and it all has to start with trust. So we
built software and policies at Airbnb that would
allow the multifamily businesses, the blue chip class A
players, to slowly walk into the
(06:58):
hospitality space called Friendly Buildings Program back in
the day has been taken over by some great people, like Jesse Stein, who
leads that business now at Airbnb, and Nate Placharczyk and
others who were all instrumental in creating that. And then
the second part of the response is because that was moving
in the right direction. Iconic Capital, who was an early
(07:20):
investor in Airbnb, saw an opportunity to use that investment
thesis that multifamily could outperform
if it was willing to have a hospitality element. And we
put together over $800 million. They asked me to come over
to Iconic and work with Jeff Felder, where we launched this
platform about six years ago. It's interesting because a lot of
(07:43):
people, we run this Halo academy. We talk about business models
and we talk about almost like to creat of a new asset
class or like taking an asset class and basically like
optimizing or like changing some of the levers of it, you
know, to create outsized returns, you know, off of the risk return
line, diagonal line. So, you know, what, what's
(08:06):
the magnitude, you know, either percentage wise or,
you know, return wise, to say, hey, we took an asset class that had like
a 10 or 12% return, you know, capital appreciation
adjusted and we were able to basically drive more revenue through it.
And that revenue was not a blip. That revenue is
now like embedded in the asset class. Yes, yes. All right. I
(08:29):
love how you describe that because that's the way we do it. I think that's
the right way to think about it. So for this asset class, which we will
call flexible living, for the. What we call it
flexible living, it's a multifamily baseline
product that would produce. Let's just call it, let's call the
baseline. Your net income is
(08:50):
zero. Okay. Let's just call it zero. Because I want you to see the magnitude
of the change when you use the Central
S E N T R A L. That's the name of the platform, the
manager that we created to do this. When you employ Central
to manage your class A property, you, you will increase
your net operating income by between 15
(09:13):
and 40%. Wow. Which is unheard
of in multifamily. Without doing either a
massive renovation or a brand new
construction, things that require a tremendous amount of risk. In
this case, all you're doing is changing the operator and in some
cases investing in furnishings to
(09:35):
extend the value and the operation
of your amenities in common spaces.
So that translates into an unlevered yield
increase of, you know, that can be between 1 and 5 or
6%. And it's tremendous.
This is something. Now We've seen over two or three years of consecutive
(09:57):
operation in our own portfolio of 4,000 plus
Class A multifamily units across the United States. And now
we've seen it with 10 or 12 other institutional owners who are
using Central today.
This is Pete Moore. I want to let you in on a little secret. There's
this company called Promotion Vault. And what they do is they give out rewards
(10:20):
from retailers that allow you to incentivize your
members without having to do zero down and one month free
or giving away shakes or giving away T shirts. What you want to
do is build a rewards program that lasts, that people value
and that doesn't discount your own products and services. So here's the
deal. There's something called Rewards Vault. The Rewards Vault is going
(10:43):
to allow a member to set up their own profile. They are
going to answer questions, you are going to get those answers. You're going to be
able to target those members and you're going to reward them inside your
club, inside your spa, and outside of the club and outside
of the spa to get them to become loyal, to get them to pay
their monthly dues and to be rewarded properly
(11:05):
for the actions A lot of companies are cutting back on rewards. You shouldn't
be promotion vault. Your answer, Trust me, this is real.
If I take a look at iconic, just to give people an
understanding of now, you basically have created a competitive
advantage in as a buyer, right? So now you're
(11:28):
not just like it. I'm not just a financial buyer. I actually
became a strategic buyer because I've got a technology
and I've got a system in place that I can potentially pay more. I
probably don't need to pay a significant amount of dollars more,
but I might have to pay a little bit more on the, on the entry
point. However, my exit is already now embedded in
(11:51):
an appreciation like on day one, because I know what I'm deploying. Is that
a fair summary? I like exactly how you summarize it.
However, I would just adjust this. When you buy that
multifamily asset, that class A
property, and you decide you're going to operate it as flexible living,
you're going to change the asset class from core multifamily
(12:13):
to flexible. You're going to purchase that
asset at a traditional multifamily cap rate, right?
You're not going to pay a premium at all. And then you're going to
deploy the right manager to operate it in a different way.
And there you're not going to pay a higher price either unless
you start to get that extra revenue and that extra bottom line.
(12:36):
So it's an all upside proposition if you do it properly. We
underwrite everything just like multifamily the way we always
have. All of it is in the lift. So, so let's take
like the way you think and the things that you've actually done successfully,
such as deployed this. And I know you're, you're, you're an active
lifestyle guy. You, you, you're, you know, at the end of the day, you probably
(12:58):
still think you're, you're a college athlete because you never, you never not right?
I'm going to, I'm going to the gym right after this. All right,
awesome. So we won't hold you up too long, but from a standpoint of like
looking at the, the health club industry, which you've been
a participant in and an avid user of,
what are some of the things that, that you walk into your club right now
(13:20):
and you're like, I can't believe like they don't do this or like,
why, why is the health club industry not the
equivalent of like the four seasons? From a standpoint of like, how does
I used to go to Summer camp, right after the first week. You know 600
kids names, right? Every kid, you know their name somehow.
And then I go into the health club and they were looking at their phone
(13:42):
when they check you in. They don't know anything about
what I'm, what I'm looking to achieve. They don't know if I've got an event
coming up that I'm training for. They're not using really you as a, it's not
a relationship. It's like a relationship with your credit card or your bank account. What
is some of like the low hanging fruit that if I said hey Zaja, do
me a favor, like you've accomplished your mission over there. Like come come a pine
(14:03):
on the halo sector. Like what do you see personally that you're like
guys, you got to think about this differently. Yeah, yeah. Well
this is, this is, I'm happy to respond to that. And I'm going to pull
some of the best of from the multifamily
central operating model. Right. Because we had
to solve the same problem in multifamily. It was a, it's a
(14:25):
sleepy industry that's done very, very well with, with
sometimes without much effort and gotten very happy in
some, some old ways. The innovation was around
delivering a higher quality experience to the resident.
In this case in your question, Pete, we're talking about when I walk into
(14:45):
a health club or my gym or fitness facility and
the first thing we do now inside of our multifamily
buildings is we make sure that the person who is working that front
desk, the first point of contact with the customer is an
employee of the business, not outsourced
third party. And this is important. That
(15:07):
person owns a little bit of
central, they own part of the property management company because
we need everybody to think like an owner, okay.
From day one and from point one in the customer
relationship. So this means instead of the phone, when they're looking
down at the phone, they're looking for the customer before they even walk in the
(15:29):
door. We make sure that the people in most cases are standing
up so that there's engagement at
the eye to eye level. There's some physical contact and a
connection between these two individuals or the groups.
We have people wearing the appropriate outfits that set the
tone for what's going to happen next and what that person wants to do.
(15:53):
And then perhaps I was going to say most importantly but
equally important is the technology that's backing up this human
being. Okay. So our experience teams
have software that helps them to know every person who's going to walk in the
door if they're a resident or a guest who is expected at the property.
Gotcha. And this is how they're able to then know what's the mission
(16:15):
of the particular day, Know a little bit about that person. If it's
possible and if all those things aren't true, just simply create a relationship
right there on the spot. Awesome. So how important
is the fitness or workout recovery
amenities at the properties you guys have
flexibilized? Yeah. Yeah, that's a new word.
(16:38):
Yeah, I make up all the time, bro. I'm just going to keep going. Yes.
Yeah. Remix. You know, when. When Central is
the operator and Central will
select multifamily buildings that have
really good fitness facilities. Okay. And when I say that, I'm
talking about the physical space, the equipment that is there
(17:00):
a range of things from sauna or to
cold plunge to all the necessary upright equipment, freeways.
Okay. So that's kind of your baseline. That's your standard.
The thing that we found is important to do is to make sure
that the community and this could be either you're visiting
your membership community or your residents. In our case at Central,
(17:23):
we're talking about the residents that they have a platform to meet
each other before they're working out, to join
groups of people who are interested in the same type of fitness culture
and to coordinate meetups with
professionals. Now the professionals, this is really interesting.
Who are your trainers in your club or your ambassadors is really
(17:46):
important in a central.
They have recruited former professional athletes in a lot of
cases and people with the necessary certifications to
live in the building. Oh, wow. Okay. Now
what this does is it creates an opportunity for those
relationships to be less transactional and much more
(18:08):
of a culture of engagement.
Fitness, health and wellness. Not just a transaction
that's, you know, X number of push ups, pull ups and sprints. We're
talking about healthy psychology,
building friendships, having experiences that transition
from the gym onto the patio into the.
(18:30):
Into the morning's breakfast or some other type of food
event. So we're integrating health and wellness, the physical part,
into the psychological part. Because we all know now science is telling
us that loneliness is a stressor on the body that makes
people not okay. And so we need to address both the physical and the
psychological elements. The culture of wellness needs to always
(18:52):
think about that. Yeah. So about eight years ago, I was at the Clinton
Health matters conference and I paid to speak there.
And the thing that struck me is
Clinton was doing a panel with the top four health insurance
CEOs and he goes to this guy, Bruce Broussard, who is the CEO of
Humana, and he says, what's the biggest issue in the healthcare industry right now?
(19:14):
And the guy took a pause and he says, loneliness is the biggest issue. This
was eight years ago. So I, like, grabbed onto that,
and it would basically change the mission statement of
Integrity Square to, like, I'm trying to connect capital with companies
to solve loneliness, obesity, and diabetes. Like, that's what I'm trying to do.
And now loneliness is kind of like top of mind with everyone. So
(19:37):
I'm usually on the front end of something. It takes like eight years for me
to, like, get to, like, mainstream. But the fact that you mentioned that is
such a huge title wave change in
the way an executive like yourself would say, like, hey, I'm
like, redeveloping this property. You know, I got xyz. But it's like,
embedded in the why of what we're doing and the how of
(19:58):
how we execute it. Yes. And your point about professional
athletes and for our audience here, I want people to, like, just
pause and take note. Like, my favorite thing to do is catch
footballs. Okay. Like, I wasn't allowed to play tackle football
as a. As a goalie in soccer. My mom wanted to preserve my brain,
which now I guess I want to thank her. At time, I was pissed.
(20:20):
Yeah. And I. I mean, I still got four years of eligibility left, so I
mean, I could become tight end if I invest in school someday.
But the point is, you're talking about having
talent at the location, and that talent needs
to be proliferated to everyone. So if my health club
that I belong to hires a personal trainer who used to be a
(20:42):
wide receiver at Rutgers, I need to know that. Right. I
need to know if there's a quarterback that is part of your staff. So when
I want to throw a football, I could hit that guy up, and that becomes
a personal training session to me. So.
So the focus on talent, I think, is like a really big takeaway of, you
know, what we're talking about here. Yeah. As well. And if it's okay to interrupt,
(21:04):
I'll add, of course, an element of that is inspiration.
You know, when you. When you see a professional athlete and they've had a
career of any type at that level, there's a certain amount
of inspiration that comes along with that person's presence
and experience. And that can be what
gets people off the couch. You know, just to use the metaphor, get me off
(21:27):
the couch, I'm curious about this person. Make that person accessible
Non threatening. Take some video of that person, talk about, see that this
is a real human being who you can engage with and is going to make
your life more interesting. That's how you can connect with that community
and get them into the club. You got to get them off the couch.
(21:48):
This is Pete Moore. Here's the last tip for you of the podcast.
We are partnered up with a company called
higher.hiredose.com they are the
leader in workout recovery products, infrared
technology, LED light masks, neck
enhancers and other products such as
PEMF mats and sauna blankets. If you have
(22:11):
not gotten on the workout recovery train yet,
your time and your stop is now. You got to get these products
in there before these workout recovery and spas end up
saturating your market. Having your members walk out of the club and going
into one of their locations for 200 bucks per month
where they're paying 39 to you. Let's become an expert in
(22:33):
workout recovery. If we are already an authority in workouts,
higher dose, check it out. There's a wholesale code
and we look forward to helping you augment your products
and services to meet the demands of your members. And
hey, let's get people happy, healthy and sweating. And
the recovery should be just as good as the workout.
(22:59):
Yeah. One of the things we were when I was kind of market framing
the health club industry years ago was like
Planet Fitness. That's a return on marketing and parking. Right. That's basically I want
to get people in, I want to run them through here as quickly as possible
like a Southwest airline. If I build a lifetime, I'm building like a trophy
asset and if you can afford to pay, you come in. And I used to
(23:20):
tell these middle market clubs like if you want to be relevant and
you want to succeed, you got to play this game on return on
relationships and results. So it's like R O R R is the way.
So the way your, your whole. It's not just you like kind of
ingraining this in the people that are around you. But how do
big companies that you've been involved in actually either hire
(23:44):
the people that get it or how do you educate them on becoming
knowledgeable about like this is like in your DNA now or
I'm going to put it in your DNA. Yeah, yeah. Well, you know
there, there are two ways like you just mentioned. You can recruit it
in, identify the talent and bring it in or you can
grow the talent internally from raw
(24:06):
material. The raw material route. Let's talk about that. First,
if you can get intelligent People to understand your
business and be willing to make a commitment
to, to join the team. You know, and it's interesting, a lot of times
when I was doing the interviewing, I would ask a person if I, if things
had gone well in the interview process, can you give me a two year
(24:28):
commitment to this, to this work? Love that. And if they, if they
can't say that or they're hesitant, that's not my person.
And here's why. Because if I'm bringing you in,
I need to be able to invest in you and put, and
build out the skill set necessary to create the culture that has
to exist in my business to be successful. So that's on the
(24:51):
green shoot side. Or if you're, if you're building it, you can get intelligent
people. They've got to have personality, they've got to understand your business, they've got to
have charisma. But they also need to be committed so that I can train
them or that the organization can train them. Then there's the other, the
other path is that you identify people who already have these skills.
And in that road, the mistake I see people make is they're not willing to
(25:14):
pay for the people who are fully developed in the
skill set you need. You've got to invest just like you invested in your
business to get it going. You've got to invest in a person to
bring them onto the team. Long term pay for a high quality
individual. I think it pays off. That return on relationship
concept you just mentioned starts with your employee
(25:36):
and then you can have your return on relationship with your membership or
your residence or your guest in your, in your, in your hotel or your
apartment building. Yeah. So I gave you a copy of the book when I saw
you back in Boston. Right. So like chapter one
is, you know, pay for talent. So I love that you said
that. And the second thing is I always tell people like, go
(25:58):
and hire someone. Ask them that question, like, I'm hiring you for this
season. Like, can you commit to me for like this,
this 2025 football season? Right. So I want
to hire you. I don't want to be people like hire people like all the
time. It's like, I want to hire January 1st and be like, you're in or
you're out, right? You're in. And then I'm not hiring anybody else.
(26:20):
And if somebody lose, somebody leaves. It's like somebody going on the injured reserve
list, right. And like it's the next man up. So I
feel like that's, that's like a way to think about it. Well, look, we got
to get you to the gym. We can probably talk for hours. Let's get this
podcast ripped and get it out into the market. And I want everyone here to
think, like, zaza things and the way you can, like,
(26:40):
reframe what you're doing inside the four walls of your club
and also just change the culture by hiring athletes
and people that have already shown up. Know what it takes to win, know the
dedication, and actually, like, be present, you know, and
build those relationships. I love that. I want to add a couple other things
(27:00):
for this community of people. Consider partnering with
apartment owners. Okay. Apartment owners have
hundreds, sometimes thousands of individuals inside of
buildings that already exist with great fitness
centers and wellness centers built into the product.
But we they don't know how to operate it, and they may not have
(27:21):
figured out the importance of health and wellness to retention of their
residents. If you've got a great product,
reach out to Central S E-N-T R A L.com
and tell them what you want to do, and they can
connect you with owners around the country who really understand
this. Great. All right, buddy. Great to see you.
(27:44):
Let's continue this. I'll give you a call after this podcast launches, but
appreciate the words of wisdom and I told you you needed no prep for this.
Hey, feels good.
(28:18):
Sa.
I am super excited to announce that we now have a formal
partnership with the Prospect Wizard. And when I say
wizard, I mean wizard. Obviously you have a website.
This allows you to convert your website traffic visitors
directly into leads. It's not just another chatbot and
it's. Not AI but it allows a visitor to call, text or leave a
(00:22):
voicemail immediately. Goes to you, your sales team or anyone else in the
club instantly. MIT shows a study that if you contact
the league within 10 minutes, chance of them converting goes up nine
times that of the average. We got the Atlanta clubs
on it. Vita Fitness, Gold's Gym, Mountainside
City Fitness, Philly, College Park. Become one
(00:44):
of the next Halo companies to deploy the Wizard.
It's easy to use. Go to the prospectwizard.com
get a free 30 day trial. Talk to my boy Dave Gallen. He will get
you all set up. And let the leads flow based on the
Wizard. Go get him.
This is Pete Moore on Halo Talks nyc. I have the pleasure of bringing a
(01:07):
friend of mine from 27 years ago when we entered
Harvard Business school. Class of 1999,
Jaja Jackson. We reconnected at our
alumni event back in Boston several months ago and
he's been one of the leaders on the investment side in the
hospitality sector. So, zsa, good to have you on the
(01:29):
show. It's a pleasure to be here, Pete. Great to see you,
Captain Halo. Thank you, thank you. Yeah. H A L O.
So we're trying to replace the word wellness with health, active lifestyle,
outdoors, and my desire to become
a superhero at some point and get that award and take over Batman and
Spider Man's role in leading this industry is,
(01:51):
is where I'm headed. So I got my hat of EBITDA on. I know you've
created a lot of EBITDA over the years on the real estate side.
So can you give our listeners a little bit of background? Maybe talk about being
at Airbnb on the ground floor and now at Iconics Capital?
Yeah, sure, sure. So Airbnb, back in
2014, I joined the the
(02:13):
strategy and real estate function. There we were. It was
a very interesting time in the world where Airbnb had
moved from its startup phase into its
mainstream phase. It was still a private company
and Airbnb was trying to figure out how it could
participate in the world of class A, multifamily
(02:35):
and just apartments in general. And having done
14, 15 years as a real estate developer creating
homes, safe homes and communities for people in some of the world's
best cities, I was able to partner With Chip Conley,
who is a hospitality guru, to figure
out how Airbnb and the multifamily world could work
(02:57):
together. That then turned into an introduction to
iconic capital, where I'm on the team today.
And we created a platform that merges the very best of
Airbnb with the very best of multifamily living.
And that's what we do today. So when you took the leap
and worked for Airbnb, which now obviously looks like a no brainer
(03:19):
decision for you, was there an entrepreneurial cord that, that
struck at the time for you? Oh,
100%. Prior to
entry into the Airbnb world, I had created a startup
coming out of Harvard business school in 99. With my partner Jason
Palmer, we created a platform for colleges and universities.
(03:41):
So I had a taste of what it meant to go from zero to one,
work with venture capital, put a board together, build a team. We did all those
things, but prior to that, I had been working with really
institutional blue chips McKinsey & Co.
Emerald fund. So getting into the entrepreneurial
part of a very mature business like multi family
(04:03):
real estate or residential real estate was kind of a perfect
combination of experiences I had had and very
mature business businesses and then working with entrepreneurs
and what it takes to be lightning quick, figure things out, be creative
and invent. So it was a very special time.
And what you accomplished through that, obviously you
(04:26):
had like, permitting, you had, you know, local
communities that were kind of fighting against, like, hey, I don't want this. I don't
want my apartment complex turning into like a hotel at the
same time. Know, the way I looked at it is,
you know, we're living in the United States. You have property rights. You should
be able to, you know, take that property and do pretty much
(04:48):
what you want with it in order to generate ancillary income.
So what are some of the things that were like key takeaways or
learnings or like milestones? You're able to say, like, here's the problem
and here's the solution that we figured out strategically how to make this work
for everybody, all the stakeholders involved, 100%.
So let's break this response into two parts. The first part
(05:11):
is during the Airbnb years, that was about five years of,
of time where we began with some of the
largest multifamily REITs in America.
EQR, Avalon Bay, others like that. And we
really just sat down, I went into the offices and said,
hey, I think you've got an opportunity to make your residents
(05:33):
happier and to make more money. If you will
embrace this hospitality concept called home
sharing. And mostly what I heard
back was, we don't want to do that. And Here are the
12 reasons why. Most of them were fear driven. You know, many
of the people who were leading apartment
(05:54):
providers at that time had never actually experienced Airbnb.
Today, millions, hundreds of millions of people have,
but at that time, they had not. And, and of course,
when you, when you're running a 300 unit multifamily building,
it's a precious commodity. You've got to make sure that the hallways are always
(06:15):
right for the resident. You've got to make sure the asset is maintained. You got
to make sure things don't break. And if you have someone who you don't know
coming in for a night or three nights or a week or a month, that's,
that's a no go. So after canvassing all these
different blockers, what we were able to do is figure out
ways to respond to the safety issues and the trust issues.
(06:36):
That's really what it takes whenever you're merging two platforms,
hospitality plus anything, you're talking about people
engaged with product, and it all has to start with trust. So we
built software and policies at Airbnb that would
allow the multifamily businesses, the blue chip class A
players, to slowly walk into the
(06:58):
hospitality space called Friendly Buildings Program back in
the day has been taken over by some great people, like Jesse Stein, who
leads that business now at Airbnb, and Nate Placharczyk and
others who were all instrumental in creating that. And then
the second part of the response is because that was moving
in the right direction. Iconic Capital, who was an early
(07:20):
investor in Airbnb, saw an opportunity to use that investment
thesis that multifamily could outperform
if it was willing to have a hospitality element. And we
put together over $800 million. They asked me to come over
to Iconic and work with Jeff Felder, where we launched this
platform about six years ago. It's interesting because a lot of
(07:43):
people, we run this Halo academy. We talk about business models
and we talk about almost like to creat of a new asset
class or like taking an asset class and basically like
optimizing or like changing some of the levers of it, you
know, to create outsized returns, you know, off of the risk return
line, diagonal line. So, you know, what, what's
(08:06):
the magnitude, you know, either percentage wise or,
you know, return wise, to say, hey, we took an asset class that had like
a 10 or 12% return, you know, capital appreciation
adjusted and we were able to basically drive more revenue through it.
And that revenue was not a blip. That revenue is
now like embedded in the asset class. Yes, yes. All right. I
(08:29):
love how you describe that because that's the way we do it. I think that's
the right way to think about it. So for this asset class, which we will
call flexible living, for the. What we call it
flexible living, it's a multifamily baseline
product that would produce. Let's just call it, let's call the
baseline. Your net income is
(08:50):
zero. Okay. Let's just call it zero. Because I want you to see the magnitude
of the change when you use the Central
S E N T R A L. That's the name of the platform, the
manager that we created to do this. When you employ Central
to manage your class A property, you, you will increase
your net operating income by between 15
(09:13):
and 40%. Wow. Which is unheard
of in multifamily. Without doing either a
massive renovation or a brand new
construction, things that require a tremendous amount of risk. In
this case, all you're doing is changing the operator and in some
cases investing in furnishings to
(09:35):
extend the value and the operation
of your amenities in common spaces.
So that translates into an unlevered yield
increase of, you know, that can be between 1 and 5 or
6%. And it's tremendous.
This is something. Now We've seen over two or three years of consecutive
(09:57):
operation in our own portfolio of 4,000 plus
Class A multifamily units across the United States. And now
we've seen it with 10 or 12 other institutional owners who are
using Central today.
This is Pete Moore. I want to let you in on a little secret. There's
this company called Promotion Vault. And what they do is they give out rewards
(10:20):
from retailers that allow you to incentivize your
members without having to do zero down and one month free
or giving away shakes or giving away T shirts. What you want to
do is build a rewards program that lasts, that people value
and that doesn't discount your own products and services. So here's the
deal. There's something called Rewards Vault. The Rewards Vault is going
(10:43):
to allow a member to set up their own profile. They are
going to answer questions, you are going to get those answers. You're going to be
able to target those members and you're going to reward them inside your
club, inside your spa, and outside of the club and outside
of the spa to get them to become loyal, to get them to pay
their monthly dues and to be rewarded properly
(11:05):
for the actions A lot of companies are cutting back on rewards. You shouldn't
be promotion vault. Your answer, Trust me, this is real.
If I take a look at iconic, just to give people an
understanding of now, you basically have created a competitive
advantage in as a buyer, right? So now you're
(11:28):
not just like it. I'm not just a financial buyer. I actually
became a strategic buyer because I've got a technology
and I've got a system in place that I can potentially pay more. I
probably don't need to pay a significant amount of dollars more,
but I might have to pay a little bit more on the, on the entry
point. However, my exit is already now embedded in
(11:51):
an appreciation like on day one, because I know what I'm deploying. Is that
a fair summary? I like exactly how you summarize it.
However, I would just adjust this. When you buy that
multifamily asset, that class A
property, and you decide you're going to operate it as flexible living,
you're going to change the asset class from core multifamily
(12:13):
to flexible. You're going to purchase that
asset at a traditional multifamily cap rate, right?
You're not going to pay a premium at all. And then you're going to
deploy the right manager to operate it in a different way.
And there you're not going to pay a higher price either unless
you start to get that extra revenue and that extra bottom line.
(12:36):
So it's an all upside proposition if you do it properly. We
underwrite everything just like multifamily the way we always
have. All of it is in the lift. So, so let's take
like the way you think and the things that you've actually done successfully,
such as deployed this. And I know you're, you're, you're an active
lifestyle guy. You, you, you're, you know, at the end of the day, you probably
(12:58):
still think you're, you're a college athlete because you never, you never not right?
I'm going to, I'm going to the gym right after this. All right,
awesome. So we won't hold you up too long, but from a standpoint of like
looking at the, the health club industry, which you've been
a participant in and an avid user of,
what are some of the things that, that you walk into your club right now
(13:20):
and you're like, I can't believe like they don't do this or like,
why, why is the health club industry not the
equivalent of like the four seasons? From a standpoint of like, how does
I used to go to Summer camp, right after the first week. You know 600
kids names, right? Every kid, you know their name somehow.
And then I go into the health club and they were looking at their phone
(13:42):
when they check you in. They don't know anything about
what I'm, what I'm looking to achieve. They don't know if I've got an event
coming up that I'm training for. They're not using really you as a, it's not
a relationship. It's like a relationship with your credit card or your bank account. What
is some of like the low hanging fruit that if I said hey Zaja, do
me a favor, like you've accomplished your mission over there. Like come come a pine
(14:03):
on the halo sector. Like what do you see personally that you're like
guys, you got to think about this differently. Yeah, yeah. Well
this is, this is, I'm happy to respond to that. And I'm going to pull
some of the best of from the multifamily
central operating model. Right. Because we had
to solve the same problem in multifamily. It was a, it's a
(14:25):
sleepy industry that's done very, very well with, with
sometimes without much effort and gotten very happy in
some, some old ways. The innovation was around
delivering a higher quality experience to the resident.
In this case in your question, Pete, we're talking about when I walk into
(14:45):
a health club or my gym or fitness facility and
the first thing we do now inside of our multifamily
buildings is we make sure that the person who is working that front
desk, the first point of contact with the customer is an
employee of the business, not outsourced
third party. And this is important. That
(15:07):
person owns a little bit of
central, they own part of the property management company because
we need everybody to think like an owner, okay.
From day one and from point one in the customer
relationship. So this means instead of the phone, when they're looking
down at the phone, they're looking for the customer before they even walk in the
(15:29):
door. We make sure that the people in most cases are standing
up so that there's engagement at
the eye to eye level. There's some physical contact and a
connection between these two individuals or the groups.
We have people wearing the appropriate outfits that set the
tone for what's going to happen next and what that person wants to do.
(15:53):
And then perhaps I was going to say most importantly but
equally important is the technology that's backing up this human
being. Okay. So our experience teams
have software that helps them to know every person who's going to walk in the
door if they're a resident or a guest who is expected at the property.
Gotcha. And this is how they're able to then know what's the mission
(16:15):
of the particular day, Know a little bit about that person. If it's
possible and if all those things aren't true, just simply create a relationship
right there on the spot. Awesome. So how important
is the fitness or workout recovery
amenities at the properties you guys have
flexibilized? Yeah. Yeah, that's a new word.
(16:38):
Yeah, I make up all the time, bro. I'm just going to keep going. Yes.
Yeah. Remix. You know, when. When Central is
the operator and Central will
select multifamily buildings that have
really good fitness facilities. Okay. And when I say that, I'm
talking about the physical space, the equipment that is there
(17:00):
a range of things from sauna or to
cold plunge to all the necessary upright equipment, freeways.
Okay. So that's kind of your baseline. That's your standard.
The thing that we found is important to do is to make sure
that the community and this could be either you're visiting
your membership community or your residents. In our case at Central,
(17:23):
we're talking about the residents that they have a platform to meet
each other before they're working out, to join
groups of people who are interested in the same type of fitness culture
and to coordinate meetups with
professionals. Now the professionals, this is really interesting.
Who are your trainers in your club or your ambassadors is really
(17:46):
important in a central.
They have recruited former professional athletes in a lot of
cases and people with the necessary certifications to
live in the building. Oh, wow. Okay. Now
what this does is it creates an opportunity for those
relationships to be less transactional and much more
(18:08):
of a culture of engagement.
Fitness, health and wellness. Not just a transaction
that's, you know, X number of push ups, pull ups and sprints. We're
talking about healthy psychology,
building friendships, having experiences that transition
from the gym onto the patio into the.
(18:30):
Into the morning's breakfast or some other type of food
event. So we're integrating health and wellness, the physical part,
into the psychological part. Because we all know now science is telling
us that loneliness is a stressor on the body that makes
people not okay. And so we need to address both the physical and the
psychological elements. The culture of wellness needs to always
(18:52):
think about that. Yeah. So about eight years ago, I was at the Clinton
Health matters conference and I paid to speak there.
And the thing that struck me is
Clinton was doing a panel with the top four health insurance
CEOs and he goes to this guy, Bruce Broussard, who is the CEO of
Humana, and he says, what's the biggest issue in the healthcare industry right now?
(19:14):
And the guy took a pause and he says, loneliness is the biggest issue. This
was eight years ago. So I, like, grabbed onto that,
and it would basically change the mission statement of
Integrity Square to, like, I'm trying to connect capital with companies
to solve loneliness, obesity, and diabetes. Like, that's what I'm trying to do.
And now loneliness is kind of like top of mind with everyone. So
(19:37):
I'm usually on the front end of something. It takes like eight years for me
to, like, get to, like, mainstream. But the fact that you mentioned that is
such a huge title wave change in
the way an executive like yourself would say, like, hey, I'm
like, redeveloping this property. You know, I got xyz. But it's like,
embedded in the why of what we're doing and the how of
(19:58):
how we execute it. Yes. And your point about professional
athletes and for our audience here, I want people to, like, just
pause and take note. Like, my favorite thing to do is catch
footballs. Okay. Like, I wasn't allowed to play tackle football
as a. As a goalie in soccer. My mom wanted to preserve my brain,
which now I guess I want to thank her. At time, I was pissed.
(20:20):
Yeah. And I. I mean, I still got four years of eligibility left, so I
mean, I could become tight end if I invest in school someday.
But the point is, you're talking about having
talent at the location, and that talent needs
to be proliferated to everyone. So if my health club
that I belong to hires a personal trainer who used to be a
(20:42):
wide receiver at Rutgers, I need to know that. Right. I
need to know if there's a quarterback that is part of your staff. So when
I want to throw a football, I could hit that guy up, and that becomes
a personal training session to me. So.
So the focus on talent, I think, is like a really big takeaway of, you
know, what we're talking about here. Yeah. As well. And if it's okay to interrupt,
(21:04):
I'll add, of course, an element of that is inspiration.
You know, when you. When you see a professional athlete and they've had a
career of any type at that level, there's a certain amount
of inspiration that comes along with that person's presence
and experience. And that can be what
gets people off the couch. You know, just to use the metaphor, get me off
(21:27):
the couch, I'm curious about this person. Make that person accessible
Non threatening. Take some video of that person, talk about, see that this
is a real human being who you can engage with and is going to make
your life more interesting. That's how you can connect with that community
and get them into the club. You got to get them off the couch.
(21:48):
This is Pete Moore. Here's the last tip for you of the podcast.
We are partnered up with a company called
higher.hiredose.com they are the
leader in workout recovery products, infrared
technology, LED light masks, neck
enhancers and other products such as
PEMF mats and sauna blankets. If you have
(22:11):
not gotten on the workout recovery train yet,
your time and your stop is now. You got to get these products
in there before these workout recovery and spas end up
saturating your market. Having your members walk out of the club and going
into one of their locations for 200 bucks per month
where they're paying 39 to you. Let's become an expert in
(22:33):
workout recovery. If we are already an authority in workouts,
higher dose, check it out. There's a wholesale code
and we look forward to helping you augment your products
and services to meet the demands of your members. And
hey, let's get people happy, healthy and sweating. And
the recovery should be just as good as the workout.
(22:59):
Yeah. One of the things we were when I was kind of market framing
the health club industry years ago was like
Planet Fitness. That's a return on marketing and parking. Right. That's basically I want
to get people in, I want to run them through here as quickly as possible
like a Southwest airline. If I build a lifetime, I'm building like a trophy
asset and if you can afford to pay, you come in. And I used to
(23:20):
tell these middle market clubs like if you want to be relevant and
you want to succeed, you got to play this game on return on
relationships and results. So it's like R O R R is the way.
So the way your, your whole. It's not just you like kind of
ingraining this in the people that are around you. But how do
big companies that you've been involved in actually either hire
(23:44):
the people that get it or how do you educate them on becoming
knowledgeable about like this is like in your DNA now or
I'm going to put it in your DNA. Yeah, yeah. Well, you know
there, there are two ways like you just mentioned. You can recruit it
in, identify the talent and bring it in or you can
grow the talent internally from raw
(24:06):
material. The raw material route. Let's talk about that. First,
if you can get intelligent People to understand your
business and be willing to make a commitment
to, to join the team. You know, and it's interesting, a lot of times
when I was doing the interviewing, I would ask a person if I, if things
had gone well in the interview process, can you give me a two year
(24:28):
commitment to this, to this work? Love that. And if they, if they
can't say that or they're hesitant, that's not my person.
And here's why. Because if I'm bringing you in,
I need to be able to invest in you and put, and
build out the skill set necessary to create the culture that has
to exist in my business to be successful. So that's on the
(24:51):
green shoot side. Or if you're, if you're building it, you can get intelligent
people. They've got to have personality, they've got to understand your business, they've got to
have charisma. But they also need to be committed so that I can train
them or that the organization can train them. Then there's the other, the
other path is that you identify people who already have these skills.
And in that road, the mistake I see people make is they're not willing to
(25:14):
pay for the people who are fully developed in the
skill set you need. You've got to invest just like you invested in your
business to get it going. You've got to invest in a person to
bring them onto the team. Long term pay for a high quality
individual. I think it pays off. That return on relationship
concept you just mentioned starts with your employee
(25:36):
and then you can have your return on relationship with your membership or
your residence or your guest in your, in your, in your hotel or your
apartment building. Yeah. So I gave you a copy of the book when I saw
you back in Boston. Right. So like chapter one
is, you know, pay for talent. So I love that you said
that. And the second thing is I always tell people like, go
(25:58):
and hire someone. Ask them that question, like, I'm hiring you for this
season. Like, can you commit to me for like this,
this 2025 football season? Right. So I want
to hire you. I don't want to be people like hire people like all the
time. It's like, I want to hire January 1st and be like, you're in or
you're out, right? You're in. And then I'm not hiring anybody else.
(26:20):
And if somebody lose, somebody leaves. It's like somebody going on the injured reserve
list, right. And like it's the next man up. So I
feel like that's, that's like a way to think about it. Well, look, we got
to get you to the gym. We can probably talk for hours. Let's get this
podcast ripped and get it out into the market. And I want everyone here to
think, like, zaza things and the way you can, like,
(26:40):
reframe what you're doing inside the four walls of your club
and also just change the culture by hiring athletes
and people that have already shown up. Know what it takes to win, know the
dedication, and actually, like, be present, you know, and
build those relationships. I love that. I want to add a couple other things
(27:00):
for this community of people. Consider partnering with
apartment owners. Okay. Apartment owners have
hundreds, sometimes thousands of individuals inside of
buildings that already exist with great fitness
centers and wellness centers built into the product.
But we they don't know how to operate it, and they may not have
(27:21):
figured out the importance of health and wellness to retention of their
residents. If you've got a great product,
reach out to Central S E-N-T R A L.com
and tell them what you want to do, and they can
connect you with owners around the country who really understand
this. Great. All right, buddy. Great to see you.
(27:44):
Let's continue this. I'll give you a call after this podcast launches, but
appreciate the words of wisdom and I told you you needed no prep for this.
Hey, feels good.
(28:18):
Sa.
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