June 20, 2024 • 40 mins
Get the scoop on Utah’s booming real estate market with Peaks and Portfolios. Join Kip Paul, Michael King, and JT Redd from Cushman & Wakefield as they share insights on growth and investment opportunities along the Wasatch Front. Learn why Utah ranks as the best overall state in the U.S. and how its growth creates a compelling environment for commercial real estate. Explore Salt Lake City's downtown growth, hotel undersupply, and the conversion of hotels into multifamily units in Utah's hospitality sector.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Rachel Oh (00:00):
Hello Peaks and Portfolios listeners.
Before we get into the nextepisode, we wanted to share a
quick update.
With summer vacay and travelschedules we will be moving to a
bi-weekly posting schedule forthe summertime only.
Starting in the fall we willresume our regular weekly
episodes.
So we hope you are enjoying thecontent and our phenomenal
speakers.
In the meantime, have afabulous summer, everyone, and
(00:22):
thank you for listening to Peaksand Portfolios presented by PEG
Companies.
Welcome to Peaks and Portfoliospresented by Peck Companies,
your go-to podcast for allthings commercial real estate
investment.
I'm Rachel oh, and togetherwe're diving into current events
(00:43):
, trends, issues andopportunities impacting the CRE
investment space, fromdissecting the latest market
moves to sharing insights ontoday's commercial real estate
landscape.
It's time to maximizeportfolios here in the peaks of
the Mountain West and beyond.
Okay, welcome everybody.
(01:03):
Thank you for joining us onthis week's episode of Peaks and
Portfolios by Peg Companies.
We're super excited abouttoday's guests.
I've never had a trio a trio ofgentlemen actually, so today
will be really interesting.
But, as many of our listenersmay be aware, this is called
Peaks and Portfolios and thepeaks kind of pays homage to the
(01:24):
mountain peaks here on theWasatch Front, which is part of
the Utah State mountain regionand what you may not know is you
know we focus on the MountainWest, but you may not know that
the crown jewel of thesemountain states is the state of
Utah, which has become my homestate.
I'm actually originally fromthe state of Washington state.
I'm actually originally fromthe state of Washington.
(01:45):
I think that originally, when Ifirst came here, most people
knew it for it.
Or when I would talk to peoplethat I was living in Salt Lake,
they talk about the skimountains you know, the best
snow on earth, home of the 2002Winter Olympics, obviously the
famous national parks.
But I wanted to brag just alittle bit about the state of
Utah for a moment.
That people may not be aware.
The state of Utah was namedagain recently the best overall
state in US News and WorldReport's best states rankings.
(02:08):
Again, this is the second yearin a row and that's based on
health care, education, thenatural environment, opportunity
, economy, crime, infrastructureand fiscal stability.
Also showcasing the MountainWest is Idaho at number five.
So I just want to give somecontext there.
But Utah is the number oneagain.
Best overall state, second yearin a row In the last census
(02:29):
counts, the last US census countfrom 2010 to 2020,.
A lot of people don't know this,but the state of Utah was
ranked the number one fastestgrowing state in the union.
Idaho was at number two.
And then the Milken Institutepublishes a best performing
cities report and the Provo OremMetropolitan Market for three
(02:50):
years in a row was the largestperforming city.
It just got dethroned by Austinthis past year, but in the top
five also includes Salt LakeCity in addition to Provo Orem.
And then on the smallperforming cities we've got St
George and the Logan area, butin that top number one spot is
Idaho Falls, idaho.
So again, all to just kind ofunderscore the strength and
(03:13):
growth nature of this MountainWest, and we thought it would be
really helpful for this episodeto really hone in on this state
of Utah and the growth of theWasatch Front.
And what better way to do thatthan to be having a conversation
with one of the mostprestigious investment sales
teams in the region, our goodfriends at Cushman Wakefield in
(03:36):
Salt Lake City, utah.
So today we have joining us isKip Paul, who is the vice
chairman of investment sales forCushman and Wakefield.
I also have along with himMichael King and JT Red Kip Paul
, who is the vice chairman ofinvestment sales for Cushman
Wakefield.
I also have along with himMichael King and JT Redd.
They are both directors ofinvestment sales at Kip Paul and
I believe they are part of asix-person team.
But I've got this trio of men.
(03:57):
I think they're going to breakinto a song for me in just a
moment.
No, I'm kidding, but anyway,welcome gentlemen.
Thank you so much for joiningus today.
Kip Paul (04:04):
We're very excited to be here, rachel, and we just
want to acknowledge that we verymuch appreciate that PEG, who
is one of the most prolific andwell-respected developers in the
market.
We really appreciate the effortyou and the whole PEG team put
together to put these podcaststogether.
Rachel Oh (04:21):
Oh, thank you, Kip.
That is such kind words,especially from someone like
yourself.
I want to maybe just let thefolks know a little bit about
your team as well, Kip.
My understanding is that yourteam, a team of six, is the
highest volume investment salesteam in the region for the last
15 to 20 years.
Is that correct?
(04:42):
That's correct.
Kip Paul (04:42):
We're very fortunate to have a lot of quality clients
.
Rachel Oh (04:46):
That's amazing.
I'm going to brag a little bitabout Kip as well.
Kip has provided transactionsmy understanding is in excess of
$9 billion over the lastseveral years and he is
considered to be the mostprolific broker in the state of
Utah.
So again, we're so honored tohave you.
And then I know he's been sohumble he kept underscoring to
(05:07):
me in the prep call that heleads a six-person team.
So I appreciate that he creditsa six-person team for this
success and along with that itsounds like Michael and JT are
huge parts of that.
So they are both directors andthey help Kip.
And we're going to kind of pickyour brains today to better
understand this vibrant, growingmarket.
(05:27):
So I wanted to kind of startout and maybe you guys could
tell us a little bit more aboutthe team.
It does seem like you are notonly an investment sales team
but you handle all product typesand just curious if you could
tell us a little bit about whatyour team covers and maybe the
different market segments.
Michael King (05:45):
Yeah, so we cover all product type, and what we
mean by that is we do investmentsales across apartments, office
, industrial, retail,hospitality and development land
, and I think that us coveringall product types allows us to
see the market from a higherelevation.
There's synergies between allthe product types office drives,
(06:07):
apartments and vice versa andso you know, ultimately, us
seeing you know where all theseassets are trading, what the
yields are, that investors arelooking for across all product
type, really give us a goodhigher level understanding of
the overall market and howeverything's working together.
Rachel Oh (06:23):
Awesome.
So I believe, jt and Michael,you both mentioned to me that
you're not even from around here.
So tell me a little bit aboutand you guys both had said that
you came here for specificreasons.
So it sounds like you came hereyou were attracted to Utah for
a few different reasons.
Can you share with me a littlebit about that?
JT Redd (06:42):
Yeah.
So I grew up in Connecticut andthen moved to Utah to go to
school at the University of Utahwith every intention,
originally, to go back thereupon graduation.
And then, once I graduated, Ikind of realized, hey, the
lifestyle here is pretty good,the economy is really strong and
it's significantly cheaper tolive here in Utah versus in the
(07:04):
tri-state area.
So I ended up staying and youknow, I think that the growth
trajectory of Utah and Salt LakeCity helped support that quite
quite a bit.
Kip Paul (07:13):
I'll just tag onto that that not only did JT stay
here in Salt Lake City, hisentire family eventually
followed him out here and nowlive in Utah.
Rachel Oh (07:23):
Oh, wow.
So we're talking like cousinsand or not cousins, parents and
brothers, and sisters, siblings,parents, friends.
JT Redd (07:31):
Yeah, a little bit of everybody followed me out here,
which is a good thing.
Rachel Oh (07:34):
Yeah, no, that's awesome.
I mean Connecticut is lovelyand you're right there in the
tri-state.
I mean such a vibrant area.
But for you to make that moveand to have family with you, I
think that shows a lot about theregion.
Michael King (07:45):
Absolutely.
I mean, I think it's atestament to what's happening
generally in Utah, where we'reseeing a lot of people come in
from the coastal regions for anumber of reasons, but I think
quality of life being very highon that list.
Rachel Oh (07:57):
And that was what year.
Michael King (07:58):
I moved out here in 2014.
Rachel Oh (08:00):
Okay.
So then you were before eventhe pandemic, when we saw a real
huge uptick in populationgrowth.
Michael King (08:06):
Oh yeah, Beat the wave a little bit.
Rachel Oh (08:09):
Excellent I love that Well.
So this story, I think, is quitecommon.
Again, like I had mentionedearlier, the state of Utah in
the last census count from 2010to 2020 was the fastest growing
state and we're continuing tosee that it retains its top
position growing state and we'recontinuing to see that it
retains its top position.
So, going back to then, whatyou guys had mentioned, you guys
cover all the different marketsegments, including multifamily
(08:30):
retail, industrial, office,hospitality.
I'd love to hear a little bitabout how that has changed over
the years.
I mean, kip, obviously you'veseen the most significant growth
or changes in your tenure here,but with JT and Michael, I'd
love to kind of hear yourthoughts on what you've seen.
We can talk about the pandemicin a minute, because obviously
(08:51):
that has changed office, but I'dlove to hear what you guys have
seen in the time that you've.
You know you've been coveringthe state.
Kip Paul (08:57):
Sure.
So just to kind of frame thediscussion here, one of my
favorite quotes is from CharlesDarwin that essentially imparts
it's not the strongest thatsurvive, it's not the smartest
that survive.
Rather, those that survive arethose that adapt the best to
change.
And so just in your priorsentence you used the word
change.
Clearly, our market has changedsignificantly from what it has
(09:28):
been the past 12 years, and Ithink the investors, developers
that embrace the change quicklyand get a new game plan are
going to be the winners.
So with that as kind of I'llcall it to frame the discussion
here, michael, do you want tostart us off with some
discussion about multifamily?
JT Redd (09:39):
Yeah, let's kick it off with apartments.
You know apartments are still,from an investor sentiment, one
of the hottest product type thatinvestors want right now.
Here, locally in Utah, we arealways low velocity and what I
mean by that is we never haveenough to sell.
There's always, for every oneapartment project we have,
(09:59):
there's 10, 15, 20 groups thatwant to get into the market.
And when you're in shakycapital markets times like we
are today, with volatility inthe 10-year Treasury and hence
volatility in interest rates andheading into an election year
and everyone talking about thesupply that we have coming,
multifamily is in flux right nowand really trying to understand
(10:22):
where pricing needs to be inorder for the market to move
again.
And right now, what we'reseeing is a large bid-ask gap
between where sellers want tosell and where buyers want to
buy, which is causing thatlow-velocity nature.
I think last year we only hadfive, maybe six transactions
(10:44):
over 100 units, which isextremely low velocity.
And right now, in order to makedecisions, put capital out, move
forward with acquisitions, whatbuyers want is data right Data
is knowledge and power and themost valuable thing that you can
have in this market.
And given we just haven't had alot of comps due to the shaky
(11:07):
capital markets time.
It's hard for those folks toreally have conviction and jump
in and make decisions.
I would just add to that thatmultifamily saw the most cap
rate compression over the pastdue to interest rates getting
down to 2% and really cap ratesfollowed that trajectory pretty
(11:29):
closely.
And ultimately, when youcompress cap rates to that
degree, those product types arenaturally going to be the ones
that need to adjust the most.
And that's what we're seeingright now is really cap rates
widening out on multifamily.
We're seeing right now isreally cap rates widening out on
multifamily, but still a ton ofequity that wants to get placed
(11:49):
in Utah just waiting for theright time to buy.
Rachel Oh (11:51):
Yeah, no, I on our end.
You know we're, as Kip hadmentioned, you know we've been
known most for our developmentside, right?
So PEG development is probably.
We have five verticals underthe PEG company's umbrella and
PEG development is what we'remost known for.
But because of kind of wherethings are with costs and
interest rates, we've had to,you know, consider other
(12:14):
investment vehicles, includingacquisitions, and our
acquisitions team is just, youknow, desperately trying to find
things to buy in the MountainWest because you know, again,
being here, and it's just tough,really tough, is what I've
heard.
It's just they're not findingwhat they're looking for and so
everyone's waiting on thesidelines and I certainly don't
want to crash such that thingsare just terrible in the economy
(12:34):
, but it's I don't know.
I don't know what it's going totake for us to find the types
of products that we're lookingfor, the debt encumbered unit,
and so I imagine you justunderscored that that we're just
it's the challenge here in themarket, the low velocity, as you
mentioned.
Okay, so earlier too, you hadsomeone had mentioned and I
can't remember who it was thatoffice drives multifamily.
So obviously there's a big needfor multifamily.
(12:59):
Investors are looking for it.
It's a tougher market to findthat.
But how about office?
How is office doing?
I think that's another questionso hot on everyone's minds.
Michael King (13:05):
Yeah, I think we're incredibly fortunate to be
in the state of Utah when we'relooking at office.
We have weathered the stormsignificantly better than some
of the other markets.
We're certainly not immune tothe challenges that office is
seeing.
That being said, you know, Ithink theancy in Utah, specific
(13:26):
as you get to the Silicon Slopesarea, has really emphasized the
importance of having people inthe office and it's immediately
tied to culture, tied toamenities, tied to game rooms,
tied to the pickleball courtsoutside these office buildings.
It's really, really important.
And I think during COVID, whichis when we saw kind of the glut
(13:47):
of office space, a lot of peopleacross the country kind of
analyzed hey, where do I reallywant to be, where do I really
want to live?
And ultimately, I think a lot offolks settled on the Western
states.
So, as a result, we saw a lot ofpeople and companies moving
their workforce here and whilethey're still working from home,
I think what the likelyscenario is is that a lot of
(14:10):
these employees that are workingfrom home, that moved to Utah,
are now going to trickle backinto their offices that are
located within the state, right,and that will take time, and I
think the nine to five work weekis likely forever changed and
it's going to be more flexibleand that you know you need to
get your kid from school at twoo'clock go.
Do it just plug back in.
But it's really, reallyimportant.
I think when we're looking atboth office and how it relates
to multifamily is they're allimmediately tied to each other,
(14:32):
right?
So we're finding that havingoffice space next to housing,
next to retail and having kindof that whole environment versus
just maybe standalone office orstandalone retail or standalone
multifamily is really, reallyimportant, and that's what we're
trying to create here in Utah.
Unfortunately, we're a youngenough market where we're able
to develop and create thesecommunities that encompass all
(14:53):
of these different asset classesand we're able to adjust and
adapt to kind of what we sawchange during COVID, and I think
that's really really importantto mention.
Kip Paul (15:02):
So I'll tag on to that , rachel Office buildings that
we used to sell on a consistentbasis at approximately $350 a
square foot on average.
Those are now trading at $150 asquare foot and in some
(15:26):
circumstances $100 or slightlyless per square foot, which, to
put that in perspective, we sellindustrial buildings for over
$200 a square foot.
So the value of officebuildings has just been
absolutely devastated.
I would use the analogy thatoffice is going through perhaps
what retail went through whenCOVID hit.
When COVID hit, everybodythought nobody was ever going
shopping again.
Everything will come fromAmazon.
Shopping centers are dead andgone, never to exist again.
(15:47):
Well, give it a little time.
The market eventually findsitself.
The market always figures itout and we've been saying for
the past few years thatinvesting in retail was a good
contrarian bet and that hasproven out.
Right now, vacancy and I'm kindof morphing from office here
over to retail the retail is nowless than 5% vacant and rents
(16:14):
are rising pretty dramatically.
So I think eventually you'llsee the same stabilization and
correction in the market withoffice space, but right now it
is just being devastated.
Rachel Oh (16:27):
Yeah, no, it's true, we've had other guests on
earlier in the year and I'll askyou folks this too as we wrap
up like you know, where wouldyou put your monies, like, where
are the investmentopportunities?
And I think the majority ofthem all mentioned retail as
being something.
So you're just echoing that andand yes, I have confidence that
everything is cyclical and Idon't think office is dead
(16:49):
completely.
I think it's changed, certainly.
But but I have confidence thatthere will be and I think we're
starting to see that like andjust for context, you know Peg,
I don't know Kip, you probablyknow Cameron quite well, but I
mean he was in here all duringthe pandemic.
I never missed and I also,cause I can't stand working at
home, that's just not my, my jam, but we came in.
So office culture is still very, very important here at PEG,
(17:13):
and I think other organizationsare that way too.
So I think we'll think, seethings come around, but I think,
to your point, it'll bedifferent.
So I did want to talk a littlebit more about multifamily,
because one thing that, as Imentioned, peg is still.
You know, we've done a lot ofconstruction, we've added a lot
of units to the downtown SaltLake City area specifically,
along with other groups.
There's been a lot of supplycoming into the market and there
(17:35):
will continue to be.
Just wanted to get your folks'thoughts on do you think there
and I have my ideas on that butdo you feel like the market is
at risk of oversupply, not justthe downtown Salt Lake area but
you know, all along the WasatchFront?
Any comments there on whatyou're seeing in multifamily?
JT Redd (17:53):
Yeah, you know, naturally we're seeing a big
supply boom, but we're not alonein that.
Other markets in the WestPhoenix, denver, I mean, you
name it everybody is dealingwith a massive supply wave right
now and we view this supplywave more as a speed bump or
growing pains than we doindicative of a future trend
(18:14):
here.
So we did a downtown studywhere we're having majority of
the supply along the WasatchFront concentrated, and this
year we're going to have ourheaviest delivery year on record
, of about 2,600 units in thedowntown and granary markets,
right or more urban markets.
That represents about 16% ofour existing inventory base,
(18:36):
which is significant, right.
That being said, the downtownrenter demographic has grown at
about 8% to 10% a year.
We've always absorbed everythingthat we've delivered up until
this point.
We had another high deliveryyear in the past in 2016, 2017
of about 16%, and market vacancystayed fairly consistent, right
(18:59):
.
And so if you isolate thatsupply statistic on an island
with zero context, you're goingto say, oh gosh, how are we
going to absorb that many units?
And ultimately that's a fairquestion.
But I think it's important tounderstand the historic context
of where we've been.
Salt Lake City, for the past 14years have been sub 5% vacancy
(19:22):
consistently every single year.
So we've been undersupplied forthe past 14, 15 years.
And so sure, given the shakycapital markets times right now,
the volatility in the greatercapital markets it's an
inopportune time to deliver allof this in the current
environment.
But again, we view it more as aspeed bump and believe that in
(19:44):
the next 18 months to 24 monthsall of this will get absorbed
and ultimately the market willrevert back to very tight
conditions.
I think second to that would bebecause of those costs that you
mentioned, rachel, and becauseit's very difficult to get the
yield that equity.
Wants on new construction rightnow the faucet's been
(20:07):
completely turned off.
Wants on new construction rightnow the faucet's been
completely turned off.
There are very few starts lastyear, very few starts this year,
and so once you get out to theend of 2026, end of 2027, we
feel that we're going to be backto very tight conditions with
almost no new product on themarket.
And if you're a developer thathas the right equity behind them
(20:28):
and has the confidence and theconviction to go right now and
hit that window, I think you aregoing to be a beneficiary over
the long term.
Rachel Oh (20:37):
Yeah, no, I love that you say that, because we're a
little bit in that.
At PEG, you know Cameron, ourfounder and CEO.
I think you guys know that he'sconvinced that it's.
You know this is a vintage yearand he's all about doing or
pursuing things when no one elseis.
So it's harder to maybeconvince investors of that.
But at the same time I, youknow, I agree with you.
(20:57):
I think that this could bedefinitely a vintage year and
we're seeing that in hospitalityas well.
And I just want to shift alittle bit too.
I know you folks coverhospitality.
Just curious your thoughts onhospitality because we're seeing
, at least from our perspective,there was almost a complete
halt on building hospitalityduring the pandemic, for obvious
(21:18):
reasons, and then since that Ithink, there's been a little bit
of a distaste for it or just,you know, hesitancy around that.
So there's we're seeing acomplete undersupply of new
hospitality and then a lot ofkeys you know units, hotel units
were taken off the market and alot of conversions from hotel
to multifamily.
So your thoughts on hospitalityin the market and kind of where
(21:39):
you see things.
Michael King (21:40):
Yeah, during COVID , to your point, our team did a
number of conversions from callit economy-grade hospitality to
multifamily, whereas studiomicro-unit conversions.
That did very well but that wasa product of performance
metrics just coming in a lotbecause people weren't really
traveling as much.
Right, fast forward to today.
(22:01):
Most hospitality owners aredoing very, very well.
Performance numbers are back up.
But, to your point, from adelivery standpoint, there's
been very few new deliveries inUtah over the past even
five-plus years.
Downtown you had Elliman Lake,meridian Highland, regency, you
had a Fairfield out inCottonwood deliver, but still
(22:22):
very, very light from a deliverystandpoint.
I think a big thing when you'relooking at hospitality
development is people are tryingto figure out how much we could
push ADRs right while stillhovering around call it that 70,
75% occupancy level.
And it's the same situationthat multifamily is going
through.
Where you know multifamily ispushing rents.
We're seeing $4 rents and a lotof product.
I think hospitality developersare trying to figure out hey,
(22:45):
how much movement is therewithin Utah to push rate up and
it's unproven at this time butto hit the yield to develop
hospitality.
It's the process we're havingto go through.
It feels like right now and wesay, multifamily, is incredibly
low velocity in Utah.
I think hospitality is evenmore so.
I mean, apple Hospitalityrecently took down three assets
(23:06):
in Utah which are the morenotable trades.
But aside from that it's verythinly traded and I think that's
just a testament to theperformance in Utah.
Most ownership groups that ownin Utah and I'm sure it's the
same for you guys they're doingvery well right and there's no
reason to sell but there'sreason to grow.
So if there is an asset thatcomes online, you're probably
going to have, you know, 15, 20groups looking at it trying to
(23:28):
bid on it, which is great if youown an existing product.
I think in our eyes we'retrying to look at OK, what is
the future for hospitalitydevelopment in Utah and how much
farther are we going to pushrate?
But ultimately it's a reallyreally good position to be in,
particularly now as we'vestabilized.
We clipped up 22.
Everyone is performing reallywell.
I think we are now going tostabilize down and see what
(23:49):
future performance numbers aregoing to look like across the
board for all hospitalityproduct.
Rachel Oh (23:54):
Yeah, no, that's super interesting.
You know, we've developed allalong the Wasatch Front kind of
in the earlier years.
We haven't done anythingrecently We've been shifting a
little bit more to Arizona andArizona's, you know, growing in
a huge clip right now as well.
But that being said, yeah, Ithink that you are.
I think it'll be interesting tosee how hospitality continues
(24:16):
to grow.
I mean, I thought for sure,with that Hyatt Regency delivery
of the 750 plus rooms, thatthere was no way right.
And then right behind that camethe La Meridian and the Element
and all that, as you hadmentioned, and they all seem to
be doing really well and our ACis doing phenomenal downtown.
Michael King (24:31):
Yeah, and to that point I think if you're looking
at just downtown Salt Lake City,those three hotels, in
conjunction with the other onesthat are in downtown, have
derived a lot of the walkabilityright, so office has been
quieter Downtown utilization isstill down.
A lot of the activity we'reseeing downtown right now has
been a product of the hotelsthat have gone up, which is
(24:53):
really exciting to see and Ithink this is a testament to if
you're building good producthospitality and sound markets,
it's going to drive walkabilityand it elevates the entire sub
market and we've certainly seenthat downtown.
Rachel Oh (25:05):
Yeah Well, and you know we were just with Ryan
Smith Smith Entertainment Groupwith all the NHL stuff that's
happening, and then of course,the Larry H Miller Group with
MLB and I just think, with allthe professional sports
activities and things coming toUtah as well, I think that's
going to continue to drive theneed for hospitality and for
(25:25):
everything else.
It's so exciting.
It's again.
Kip, you've been here thiswhole time.
It's got to be exciting for youto watch the state grow like it
is.
Kip Paul (25:34):
Oh, absolutely, when I was the age of Michael and JT,
we'd get some of theinstitutional groups that would
come to the market and say, tellus why we should invest here,
and we'd try to give them ourbest pitch and apparently we
weren't very good because notvery many of them came and fast
forward.
To today it's the exactopposite.
If we put anything on themarket of quality or substance
(25:57):
of size, at least 50% of thebidders are pure institutional,
if not 100%.
So it's completely reversed.
Rachel Oh (26:04):
Yeah, it's completely reversed.
Yeah, no, it's interesting yousay that, kip, because a big
part of our business is thedevelopment side, and one of the
things that we're able to dothat, you know, other groups may
not be able to is that we haverelationships with landowners
and or we just have a reputationand we are quote unquote locals
.
So I remember we were talkingto one landowner because we're
doing build for rent and I'lltalk about that in a second and
(26:33):
you know they had lots of groupsapproach them.
They liked us because we werelocal, because I think back in
the day they were snubbed bysome East Coast group that just
kind of treated them like hicksand they never forgot that and
so meaning they will only workwith locals because they
remember being treated so poorly.
And now everyone wants to betheir friend and wants to buy
their land and they're like,nope, nope, you treated us like
we were hicks.
And now you know so it's.
(26:54):
It's just so interesting howyou know, to your point, 10,
maybe, even well, obviously 20years ago, but maybe even 10
years ago, people just did nottake this region seriously and
now they're all clamoring tocome in and they're going to
have to come work with a localtype person in order to get in,
because people just distrust,right, those outsiders.
If you will, I think that'llchange, but for now there's
(27:14):
still a little bit of that.
So it's interesting that yousaid that, kip, because we had
that exact same experience.
So to our favor, actually.
So let's talk about that.
We've been talking a lot aboutmultifamily.
One of the things Peg also does, and I think you folks are
familiar with too, is we'redoing build for rent.
So we're building single familyrental communities along the
Wasatch Front and we're tryingto at least it's hard to pencil,
(27:35):
but we're trying to do that andI wanted to get your thoughts
on do you think that the WasatchFront is becoming more of a
forever renter market?
It didn't used to be that way,I remember and I'm dating myself
but back in the day you couldsave up for a couple of years
and do a down payment and buy alittle home, and you know, after
(27:55):
college graduation, and it'sjust not the same anymore.
So curious if you think thatthe Wasatch Front is becoming
more like the nation in terms ofunaffordability and the need
for rentals in this region.
JT Redd (28:07):
Yeah, it's a great question, a great topic.
We are unfortunately losing ouraffordability story here in Utah
and I think it comes down toour land constraints, right,
we've got mountains to the east,mountains to the west, lakes to
the west, right, and so we havea finite amount of land and you
can only and you can only, youknow build so much and
(28:30):
ultimately, I think that thatthat build to rent space is
going to solve for some of that.
As millennials get older, right,they don't want to be in a
small apartment anymore, butthey still can't, unfortunately,
afford a house to buy.
They want to continue toprogress in life, they want to
step up, have more space, youknow, as as their family grows,
(28:52):
and I think that's where we'reseeing a lot of the demand for,
for build a rent product.
Additionally in Utah, it onlyrepresents about six, 7% of our
existing inventory base, right,so not very many or not very
much inventory of BTR and a lotof demand.
So, for, if you can find theacreage that you need to build
(29:14):
the density that you need,ultimately you're not going to
be competing with all the restof the supply in the market.
Rachel Oh (29:20):
Yeah, yeah, no, that's again, that's what we're
seeing, and you know I hate tosee it.
On one hand, from an investmentpoint of view, it's interesting
, but it's so crazy how theWasatch Front is falling suit
with the rest of the country.
But to your point, I think it'simportant to note that it's
more about land constraints.
So it's less about, I think,what the rest of the country is
(29:44):
seeing, but more just about theland constraint nature.
And then you can see that whenyou're trying to buy a home here
, I think people are surprisedat the cost of homes, given the
quote, unquote affordability.
You know story that up untilrecently we're probably been
telling Okay, so let's shift alittle bit.
I think I can't remember who itwas that mentioned this earlier
on.
But what about distress andforeclosures?
(30:05):
I think I know the answer tothis, but are you folks seeing
that now, like you know, there'slooming trillions of debt
coming due and people are all onthe sidelines kind of waiting
for distressed assets andwhatnot?
Tell me about what you folksare seeing.
You know, in this region Do youthink there will be the
distress type properties that alot of the country is seeing?
Kip Paul (30:26):
So, as JT mentioned earlier, our market is
weathering the downturn betterthan most.
We thought we would see moreforeclosures and challenges out
there than what we have.
To put that in perspective in2022, we did about 19 BOVs
broker opinions of value.
In 23, we did over 100.
(30:47):
And I think that really goes tothe point of investors.
Owners, developers are tryingto figure out the new world.
If you will.
Recent BOVs that we've done.
I think we've technically onlyhad one lender foreclosure or
imminent foreclosure.
There's probably two or threemore pending out there.
(31:08):
Our belief is that there's morebeneath the surface that will
be coming.
But you know, we get call aftercall from investors wanting to
come into the market saying sendus the list of all the
foreclosures.
Well, there's actually kind ofzero so, but they are starting
to occur.
But I think it's going to belight.
I don't think it's going tounfold the way other market
(31:29):
cycles have.
Rachel Oh (31:30):
And will it be one asset class or a couple, or like
what are you seeing?
What do you predict will makeup that list?
Kip Paul (31:37):
You know, top of that list is going to be office.
For sure there may be a littlebit of a.
There's one foreclosure on apartially built apartment
complex right now, so maybewe'll have one or two there.
But the counter argument as towhy there are not foreclosures
is there's still a lot ofcapital in the market and in the
world, and so if an owner getspressed hard enough, there's
(32:01):
always capital out there.
It's just going to be veryexpensive capital to solve the
problem.
Rachel Oh (32:05):
Yeah, yeah, no, we're definitely seeing that.
No, that's super helpful.
I really appreciate that.
So, okay, kip, since you werekind of commenting, you've been
through, then, a number ofmarket cycles not to underscore
that but I think that gives yousome perspective, more so than
JT and Michael can offer.
How does this current cyclecompare to prior cycles?
Kip Paul (32:30):
Rachel, did you just say I have platinum or silver
hair?
I think that's what I heard.
Rachel Oh (32:34):
I think you have beautiful platinum hair.
Kip Paul (32:38):
Fair enough.
As tough as this cycle is, thisis actually one of the easier
cycles we've been through.
If you're 40 years or youngerand you've been in the business,
all you've seen is rentsincrease.
There's no downside, nothingever goes wrong.
It's just been how much moneycan investors and developers
make?
And some of the more seasonedguys I remember through this up
(33:03):
cycle, roger Boyer wouldcontinually ask his team have
you guys ever considered thatrents could go down?
Yeah, and they would look athim like he was crazy, right?
So, relatively speaking, I'mnot saying this is without
challenges and without pain, butthis is certainly not the worst
down cycle we've ever beenthrough.
Oh, 708 was really brutal.
(33:23):
We watched major entities gobroke on a daily basis.
Sure, we watched major entitiesgo broke on a daily basis and,
going back to the late 80s, thelenders foreclosed on.
It seemed like the entiremarket.
They literally most of you guysare too young to know these
remember these days, but thebanks would literally publish
thick magazines of all of theirforeclosures and they were
(33:45):
begging for somebody to come buysomething.
So you've got to keep it inperspective.
We just had 14 years of nothingbut great times.
There's a little adjustmenthere.
You know, the younger peoplethink the sky is falling because
interest rates are seven ratherthan three.
I remember the days when theywere 18 to 24.
So, keep your wits about you,it'll all work out.
Rachel Oh (34:07):
Right, no, no, I appreciate that.
To that as well, and any one ofyou can comment do you feel
like Utah weather, is things alittle bit better than the rest
of the country?
Thoughts on that.
Michael King (34:19):
Yeah, I mean, I think it's just a product of the
number of people moving intothe state right, and that's
shown by kind of the growthwe've had across all product
type.
It's quality of life, it's costof living, it's proximity to
the airport, it's all theimportant things.
You can get a direct flight outof Salt Lake City to just about
anywhere.
All those things mixed together, I think, has resulted in the
(34:42):
growth of the state.
That, in combination withtogether, I think has resulted
in the growth of the state.
Um, that in combination with,again, I think it's if you're
looking at or speaking withsomebody from New York or
California or even Chicago, youknow, to Utah natives it all may
sound expensive now but to allthose people coming in they're
saying, hey, this is, this isstill half of what it was where
I'm coming from, um, and I thinkthat's that's a big part of it,
(35:04):
in combination with things like, you know, the announcement of
sports teams.
I think that's going tocontinue to aid the growth of
the state.
We're a maturing market and youknow, we're slowly becoming I
don't want to call it real, buta very big primary market, which
is exciting.
JT Redd (35:21):
Yeah, we like to say that investors can't control the
macro, they can't control theuncertainty, they can't control
what the Fed does, they can'tcontrol interest rates or the
volatility.
But what they can control arethe markets that they invest in,
and what we're hearing is thatinvestors are hyper-focused on
high-growth markets with solidcore fundamentals and Salt Lake
(35:43):
checks all those boxes, rachel,you mentioned.
Us News, and World Reportranked us the best state in the
country, two years ina row.
Now, we're one of the mostdiverse economies in the country
, so we're not handcuffed ordependent on one industry, which
helps insulate us.
We're one of the most fiscallyconservative states, one of the
(36:07):
few states with a AAA creditrating.
I mean, the list goes on and onand on the airport, the
infrastructure, all of that andso I think everybody's fighting
the macro level volatility.
Well, go to the markets thathave that high growth potential,
that long runway, and havethose strong core fundamentals.
Rachel Oh (36:27):
Yeah, no, I appreciate that.
I also again myself atransplant.
I grew up in Washington, but Idid go to school at Brigham
Young back in the day and thenspent a lot of time in Los
Angeles in my career.
But I also think there's auniqueness to the state in terms
of not just fiscal prudence,but I do think that the overall
(36:48):
populace tends to be.
You know, they called thebeehive state for a reason it's
industrious, I think, kip, evenin your bio it talks about your
hard work ethic and I imagine JTand Michael are just the same.
But I think there is just a aunique character to the state,
of its people and the peoplethat come here and the people
that choose to stay.
I've just never seen anythinglike it.
(37:09):
And we have our team is growinghere at PEG, and when I started
we were at 80 in the office.
We're now at 160 and weactually have 1100 employees
nationwide.
And the work ethic and I don'tknow, the commitment to
excellence and high integrity, Ithink is just something we hear
constantly from folks that cometo us from different states
(37:29):
that they hadn't seen before,and I think that's what makes
Utah super special as well.
So again, that's my little plug,but I think there's so many
things and so I'm just so.
I mean, I love my adopted homestate and for all that, okay.
So we're going to wrap up alittle bit, but I'm just going
to ask each of you one questionIf you had $100 million, where
(37:55):
would you invest it today?
And I'm going to ask each oneof you and I don't know who
wants to start, but if you eachhad $100 million, where would
you invest it today?
Kip Paul (38:03):
I would spread it among all of the different
market segments.
Each one of them is going tohave its up times.
Each one's going to have itsdown times.
They're all going to havedifferent risk profiles at
different moments in time.
For example, if you chose toinvest the money in office right
now, it's a bigger risk, butthe potential reward could be
very significant, depending onthe time it takes for the office
(38:26):
market to recover.
I don't think you can go wrongwith multifamily retail
industrial hospitality.
To Michael's point earlier,it's really about just get into
the market.
Utah is going to produce goodresults for everybody.
Rachel Oh (38:41):
Excellent.
Michael King (38:42):
Yeah, I agree with that.
I mean I think if you're buyinggood assets in good locations
at a low basis, you're going tobe positioned very, very well.
If you're, you know, into GibbsPoint on Office, it's at an
incredibly low basis.
We recognize there's going tobe pain for the next few years
but I think there's a few goodbuys out there that you know
will benefit from the recoveryof office.
(39:03):
And then on themulti-hospitality and retail
side, I think spreading itacross all of those diversifying
risk a little bit is incrediblysmart and buying below
replacement cost.
JT Redd (39:14):
Yeah, I agree with all of that.
I'll get a little bit morespecific, I think, trying to
with the supply story we talkedabout on multifamily trying to
find existing multifamily assetsin those heavier supply areas
where everyone's scared to buyin right now or scared to build
in, understanding thatreplacement costs in our market
(39:36):
in Utah to build you know,podium right now is $400,000 to
$450,000 a unit.
I would look at reallywell-located apartment assets
that are $100,000, $150,000 perunit discount to that new
product and that replacementcost that allows you to be a
low-cost provider in the marketwhile still getting great assets
(39:59):
and great geographies, allowsyou to weather that supply storm
, storm and you'll be abeneficiary of that basis once
we are back in those tightconditions again.
Rachel Oh (40:08):
Okay, excellent, I couldn't have said it any better
.
I love that.
I love diversification acrossasset classes, I love trying to
find the right cost basis andthen, I think, commitment to
this great state of Utah which,if those of you have not yet
visited, you've got to come andI will personally take you out
and about if you'd like us tojoin.
So thank you, gentlemen, forjoining us this week.
(40:29):
Your insights have beenincredibly insightful.
So honored to have you all join, and thank you to all our
listeners who have joined ustoday.
From the peaks of the MountainWest, I am Rachel oh, your host
for Peaks and Portfolios by PegCompanies.
Thank you all for joining,until next time.
Hello Peaks and Portfolios listeners.
Before we get into the nextepisode, we wanted to share a
quick update.
With summer vacay and travelschedules we will be moving to a
bi-weekly posting schedule forthe summertime only.
Starting in the fall we willresume our regular weekly
episodes.
So we hope you are enjoying thecontent and our phenomenal
speakers.
In the meantime, have afabulous summer, everyone, and
(00:22):
thank you for listening to Peaksand Portfolios presented by PEG
Companies.
Welcome to Peaks and Portfoliospresented by Peck Companies,
your go-to podcast for allthings commercial real estate
investment.
I'm Rachel oh, and togetherwe're diving into current events
(00:43):
, trends, issues andopportunities impacting the CRE
investment space, fromdissecting the latest market
moves to sharing insights ontoday's commercial real estate
landscape.
It's time to maximizeportfolios here in the peaks of
the Mountain West and beyond.
Okay, welcome everybody.
(01:03):
Thank you for joining us onthis week's episode of Peaks and
Portfolios by Peg Companies.
We're super excited abouttoday's guests.
I've never had a trio a trio ofgentlemen actually, so today
will be really interesting.
But, as many of our listenersmay be aware, this is called
Peaks and Portfolios and thepeaks kind of pays homage to the
(01:24):
mountain peaks here on theWasatch Front, which is part of
the Utah State mountain regionand what you may not know is you
know we focus on the MountainWest, but you may not know that
the crown jewel of thesemountain states is the state of
Utah, which has become my homestate.
I'm actually originally fromthe state of Washington state.
I'm actually originally fromthe state of Washington.
(01:45):
I think that originally, when Ifirst came here, most people
knew it for it.
Or when I would talk to peoplethat I was living in Salt Lake,
they talk about the skimountains you know, the best
snow on earth, home of the 2002Winter Olympics, obviously the
famous national parks.
But I wanted to brag just alittle bit about the state of
Utah for a moment.
That people may not be aware.
The state of Utah was namedagain recently the best overall
state in US News and WorldReport's best states rankings.
(02:08):
Again, this is the second yearin a row and that's based on
health care, education, thenatural environment, opportunity
, economy, crime, infrastructureand fiscal stability.
Also showcasing the MountainWest is Idaho at number five.
So I just want to give somecontext there.
But Utah is the number oneagain.
Best overall state, second yearin a row In the last census
(02:29):
counts, the last US census countfrom 2010 to 2020,.
A lot of people don't know this,but the state of Utah was
ranked the number one fastestgrowing state in the union.
Idaho was at number two.
And then the Milken Institutepublishes a best performing
cities report and the Provo OremMetropolitan Market for three
(02:50):
years in a row was the largestperforming city.
It just got dethroned by Austinthis past year, but in the top
five also includes Salt LakeCity in addition to Provo Orem.
And then on the smallperforming cities we've got St
George and the Logan area, butin that top number one spot is
Idaho Falls, idaho.
So again, all to just kind ofunderscore the strength and
(03:13):
growth nature of this MountainWest, and we thought it would be
really helpful for this episodeto really hone in on this state
of Utah and the growth of theWasatch Front.
And what better way to do thatthan to be having a conversation
with one of the mostprestigious investment sales
teams in the region, our goodfriends at Cushman Wakefield in
(03:36):
Salt Lake City, utah.
So today we have joining us isKip Paul, who is the vice
chairman of investment sales forCushman and Wakefield.
I also have along with himMichael King and JT Red Kip Paul
, who is the vice chairman ofinvestment sales for Cushman
Wakefield.
I also have along with himMichael King and JT Redd.
They are both directors ofinvestment sales at Kip Paul and
I believe they are part of asix-person team.
But I've got this trio of men.
(03:57):
I think they're going to breakinto a song for me in just a
moment.
No, I'm kidding, but anyway,welcome gentlemen.
Thank you so much for joiningus today.
Kip Paul (04:04):
We're very excited to be here, rachel, and we just
want to acknowledge that we verymuch appreciate that PEG, who
is one of the most prolific andwell-respected developers in the
market.
We really appreciate the effortyou and the whole PEG team put
together to put these podcaststogether.
Rachel Oh (04:21):
Oh, thank you, Kip.
That is such kind words,especially from someone like
yourself.
I want to maybe just let thefolks know a little bit about
your team as well, Kip.
My understanding is that yourteam, a team of six, is the
highest volume investment salesteam in the region for the last
15 to 20 years.
Is that correct?
(04:42):
That's correct.
Kip Paul (04:42):
We're very fortunate to have a lot of quality clients
.
Rachel Oh (04:46):
That's amazing.
I'm going to brag a little bitabout Kip as well.
Kip has provided transactionsmy understanding is in excess of
$9 billion over the lastseveral years and he is
considered to be the mostprolific broker in the state of
Utah.
So again, we're so honored tohave you.
And then I know he's been sohumble he kept underscoring to
(05:07):
me in the prep call that heleads a six-person team.
So I appreciate that he creditsa six-person team for this
success and along with that itsounds like Michael and JT are
huge parts of that.
So they are both directors andthey help Kip.
And we're going to kind of pickyour brains today to better
understand this vibrant, growingmarket.
(05:27):
So I wanted to kind of startout and maybe you guys could
tell us a little bit more aboutthe team.
It does seem like you are notonly an investment sales team
but you handle all product typesand just curious if you could
tell us a little bit about whatyour team covers and maybe the
different market segments.
Michael King (05:45):
Yeah, so we cover all product type, and what we
mean by that is we do investmentsales across apartments, office
, industrial, retail,hospitality and development land
, and I think that us coveringall product types allows us to
see the market from a higherelevation.
There's synergies between allthe product types office drives,
(06:07):
apartments and vice versa andso you know, ultimately, us
seeing you know where all theseassets are trading, what the
yields are, that investors arelooking for across all product
type, really give us a goodhigher level understanding of
the overall market and howeverything's working together.
Rachel Oh (06:23):
Awesome.
So I believe, jt and Michael,you both mentioned to me that
you're not even from around here.
So tell me a little bit aboutand you guys both had said that
you came here for specificreasons.
So it sounds like you came hereyou were attracted to Utah for
a few different reasons.
Can you share with me a littlebit about that?
JT Redd (06:42):
Yeah.
So I grew up in Connecticut andthen moved to Utah to go to
school at the University of Utahwith every intention,
originally, to go back thereupon graduation.
And then, once I graduated, Ikind of realized, hey, the
lifestyle here is pretty good,the economy is really strong and
it's significantly cheaper tolive here in Utah versus in the
(07:04):
tri-state area.
So I ended up staying and youknow, I think that the growth
trajectory of Utah and Salt LakeCity helped support that quite
quite a bit.
Kip Paul (07:13):
I'll just tag onto that that not only did JT stay
here in Salt Lake City, hisentire family eventually
followed him out here and nowlive in Utah.
Rachel Oh (07:23):
Oh, wow.
So we're talking like cousinsand or not cousins, parents and
brothers, and sisters, siblings,parents, friends.
JT Redd (07:31):
Yeah, a little bit of everybody followed me out here,
which is a good thing.
Rachel Oh (07:34):
Yeah, no, that's awesome.
I mean Connecticut is lovelyand you're right there in the
tri-state.
I mean such a vibrant area.
But for you to make that moveand to have family with you, I
think that shows a lot about theregion.
Michael King (07:45):
Absolutely.
I mean, I think it's atestament to what's happening
generally in Utah, where we'reseeing a lot of people come in
from the coastal regions for anumber of reasons, but I think
quality of life being very highon that list.
Rachel Oh (07:57):
And that was what year.
Michael King (07:58):
I moved out here in 2014.
Rachel Oh (08:00):
Okay.
So then you were before eventhe pandemic, when we saw a real
huge uptick in populationgrowth.
Michael King (08:06):
Oh yeah, Beat the wave a little bit.
Rachel Oh (08:09):
Excellent I love that Well.
So this story, I think, is quitecommon.
Again, like I had mentionedearlier, the state of Utah in
the last census count from 2010to 2020 was the fastest growing
state and we're continuing tosee that it retains its top
position growing state and we'recontinuing to see that it
retains its top position.
So, going back to then, whatyou guys had mentioned, you guys
cover all the different marketsegments, including multifamily
(08:30):
retail, industrial, office,hospitality.
I'd love to hear a little bitabout how that has changed over
the years.
I mean, kip, obviously you'veseen the most significant growth
or changes in your tenure here,but with JT and Michael, I'd
love to kind of hear yourthoughts on what you've seen.
We can talk about the pandemicin a minute, because obviously
(08:51):
that has changed office, but I'dlove to hear what you guys have
seen in the time that you've.
You know you've been coveringthe state.
Kip Paul (08:57):
Sure.
So just to kind of frame thediscussion here, one of my
favorite quotes is from CharlesDarwin that essentially imparts
it's not the strongest thatsurvive, it's not the smartest
that survive.
Rather, those that survive arethose that adapt the best to
change.
And so just in your priorsentence you used the word
change.
Clearly, our market has changedsignificantly from what it has
(09:28):
been the past 12 years, and Ithink the investors, developers
that embrace the change quicklyand get a new game plan are
going to be the winners.
So with that as kind of I'llcall it to frame the discussion
here, michael, do you want tostart us off with some
discussion about multifamily?
JT Redd (09:39):
Yeah, let's kick it off with apartments.
You know apartments are still,from an investor sentiment, one
of the hottest product type thatinvestors want right now.
Here, locally in Utah, we arealways low velocity and what I
mean by that is we never haveenough to sell.
There's always, for every oneapartment project we have,
(09:59):
there's 10, 15, 20 groups thatwant to get into the market.
And when you're in shakycapital markets times like we
are today, with volatility inthe 10-year Treasury and hence
volatility in interest rates andheading into an election year
and everyone talking about thesupply that we have coming,
multifamily is in flux right nowand really trying to understand
(10:22):
where pricing needs to be inorder for the market to move
again.
And right now, what we'reseeing is a large bid-ask gap
between where sellers want tosell and where buyers want to
buy, which is causing thatlow-velocity nature.
I think last year we only hadfive, maybe six transactions
(10:44):
over 100 units, which isextremely low velocity.
And right now, in order to makedecisions, put capital out, move
forward with acquisitions, whatbuyers want is data right Data
is knowledge and power and themost valuable thing that you can
have in this market.
And given we just haven't had alot of comps due to the shaky
(11:07):
capital markets time.
It's hard for those folks toreally have conviction and jump
in and make decisions.
I would just add to that thatmultifamily saw the most cap
rate compression over the pastdue to interest rates getting
down to 2% and really cap ratesfollowed that trajectory pretty
(11:29):
closely.
And ultimately, when youcompress cap rates to that
degree, those product types arenaturally going to be the ones
that need to adjust the most.
And that's what we're seeingright now is really cap rates
widening out on multifamily.
We're seeing right now isreally cap rates widening out on
multifamily, but still a ton ofequity that wants to get placed
(11:49):
in Utah just waiting for theright time to buy.
Rachel Oh (11:51):
Yeah, no, I on our end.
You know we're, as Kip hadmentioned, you know we've been
known most for our developmentside, right?
So PEG development is probably.
We have five verticals underthe PEG company's umbrella and
PEG development is what we'remost known for.
But because of kind of wherethings are with costs and
interest rates, we've had to,you know, consider other
(12:14):
investment vehicles, includingacquisitions, and our
acquisitions team is just, youknow, desperately trying to find
things to buy in the MountainWest because you know, again,
being here, and it's just tough,really tough, is what I've
heard.
It's just they're not findingwhat they're looking for and so
everyone's waiting on thesidelines and I certainly don't
want to crash such that thingsare just terrible in the economy
(12:34):
, but it's I don't know.
I don't know what it's going totake for us to find the types
of products that we're lookingfor, the debt encumbered unit,
and so I imagine you justunderscored that that we're just
it's the challenge here in themarket, the low velocity, as you
mentioned.
Okay, so earlier too, you hadsomeone had mentioned and I
can't remember who it was thatoffice drives multifamily.
So obviously there's a big needfor multifamily.
(12:59):
Investors are looking for it.
It's a tougher market to findthat.
But how about office?
How is office doing?
I think that's another questionso hot on everyone's minds.
Michael King (13:05):
Yeah, I think we're incredibly fortunate to be
in the state of Utah when we'relooking at office.
We have weathered the stormsignificantly better than some
of the other markets.
We're certainly not immune tothe challenges that office is
seeing.
That being said, you know, Ithink theancy in Utah, specific
(13:26):
as you get to the Silicon Slopesarea, has really emphasized the
importance of having people inthe office and it's immediately
tied to culture, tied toamenities, tied to game rooms,
tied to the pickleball courtsoutside these office buildings.
It's really, really important.
And I think during COVID, whichis when we saw kind of the glut
(13:47):
of office space, a lot of peopleacross the country kind of
analyzed hey, where do I reallywant to be, where do I really
want to live?
And ultimately, I think a lot offolks settled on the Western
states.
So, as a result, we saw a lot ofpeople and companies moving
their workforce here and whilethey're still working from home,
I think what the likelyscenario is is that a lot of
(14:10):
these employees that are workingfrom home, that moved to Utah,
are now going to trickle backinto their offices that are
located within the state, right,and that will take time, and I
think the nine to five work weekis likely forever changed and
it's going to be more flexibleand that you know you need to
get your kid from school at twoo'clock go.
Do it just plug back in.
But it's really, reallyimportant.
I think when we're looking atboth office and how it relates
to multifamily is they're allimmediately tied to each other,
(14:32):
right?
So we're finding that havingoffice space next to housing,
next to retail and having kindof that whole environment versus
just maybe standalone office orstandalone retail or standalone
multifamily is really, reallyimportant, and that's what we're
trying to create here in Utah.
Unfortunately, we're a youngenough market where we're able
to develop and create thesecommunities that encompass all
(14:53):
of these different asset classesand we're able to adjust and
adapt to kind of what we sawchange during COVID, and I think
that's really really importantto mention.
Kip Paul (15:02):
So I'll tag on to that , rachel Office buildings that
we used to sell on a consistentbasis at approximately $350 a
square foot on average.
Those are now trading at $150 asquare foot and in some
(15:26):
circumstances $100 or slightlyless per square foot, which, to
put that in perspective, we sellindustrial buildings for over
$200 a square foot.
So the value of officebuildings has just been
absolutely devastated.
I would use the analogy thatoffice is going through perhaps
what retail went through whenCOVID hit.
When COVID hit, everybodythought nobody was ever going
shopping again.
Everything will come fromAmazon.
Shopping centers are dead andgone, never to exist again.
(15:47):
Well, give it a little time.
The market eventually findsitself.
The market always figures itout and we've been saying for
the past few years thatinvesting in retail was a good
contrarian bet and that hasproven out.
Right now, vacancy and I'm kindof morphing from office here
over to retail the retail is nowless than 5% vacant and rents
(16:14):
are rising pretty dramatically.
So I think eventually you'llsee the same stabilization and
correction in the market withoffice space, but right now it
is just being devastated.
Rachel Oh (16:27):
Yeah, no, it's true, we've had other guests on
earlier in the year and I'll askyou folks this too as we wrap
up like you know, where wouldyou put your monies, like, where
are the investmentopportunities?
And I think the majority ofthem all mentioned retail as
being something.
So you're just echoing that andand yes, I have confidence that
everything is cyclical and Idon't think office is dead
(16:49):
completely.
I think it's changed, certainly.
But but I have confidence thatthere will be and I think we're
starting to see that like andjust for context, you know Peg,
I don't know Kip, you probablyknow Cameron quite well, but I
mean he was in here all duringthe pandemic.
I never missed and I also,cause I can't stand working at
home, that's just not my, my jam, but we came in.
So office culture is still very, very important here at PEG,
(17:13):
and I think other organizationsare that way too.
So I think we'll think, seethings come around, but I think,
to your point, it'll bedifferent.
So I did want to talk a littlebit more about multifamily,
because one thing that, as Imentioned, peg is still.
You know, we've done a lot ofconstruction, we've added a lot
of units to the downtown SaltLake City area specifically,
along with other groups.
There's been a lot of supplycoming into the market and there
(17:35):
will continue to be.
Just wanted to get your folks'thoughts on do you think there
and I have my ideas on that butdo you feel like the market is
at risk of oversupply, not justthe downtown Salt Lake area but
you know, all along the WasatchFront?
Any comments there on whatyou're seeing in multifamily?
JT Redd (17:53):
Yeah, you know, naturally we're seeing a big
supply boom, but we're not alonein that.
Other markets in the WestPhoenix, denver, I mean, you
name it everybody is dealingwith a massive supply wave right
now and we view this supplywave more as a speed bump or
growing pains than we doindicative of a future trend
(18:14):
here.
So we did a downtown studywhere we're having majority of
the supply along the WasatchFront concentrated, and this
year we're going to have ourheaviest delivery year on record
, of about 2,600 units in thedowntown and granary markets,
right or more urban markets.
That represents about 16% ofour existing inventory base,
(18:36):
which is significant, right.
That being said, the downtownrenter demographic has grown at
about 8% to 10% a year.
We've always absorbed everythingthat we've delivered up until
this point.
We had another high deliveryyear in the past in 2016, 2017
of about 16%, and market vacancystayed fairly consistent, right
(18:59):
.
And so if you isolate thatsupply statistic on an island
with zero context, you're goingto say, oh gosh, how are we
going to absorb that many units?
And ultimately that's a fairquestion.
But I think it's important tounderstand the historic context
of where we've been.
Salt Lake City, for the past 14years have been sub 5% vacancy
(19:22):
consistently every single year.
So we've been undersupplied forthe past 14, 15 years.
And so sure, given the shakycapital markets times right now,
the volatility in the greatercapital markets it's an
inopportune time to deliver allof this in the current
environment.
But again, we view it more as aspeed bump and believe that in
(19:44):
the next 18 months to 24 monthsall of this will get absorbed
and ultimately the market willrevert back to very tight
conditions.
I think second to that would bebecause of those costs that you
mentioned, rachel, and becauseit's very difficult to get the
yield that equity.
Wants on new construction rightnow the faucet's been
(20:07):
completely turned off.
Wants on new construction rightnow the faucet's been
completely turned off.
There are very few starts lastyear, very few starts this year,
and so once you get out to theend of 2026, end of 2027, we
feel that we're going to be backto very tight conditions with
almost no new product on themarket.
And if you're a developer thathas the right equity behind them
(20:28):
and has the confidence and theconviction to go right now and
hit that window, I think you aregoing to be a beneficiary over
the long term.
Rachel Oh (20:37):
Yeah, no, I love that you say that, because we're a
little bit in that.
At PEG, you know Cameron, ourfounder and CEO.
I think you guys know that he'sconvinced that it's.
You know this is a vintage yearand he's all about doing or
pursuing things when no one elseis.
So it's harder to maybeconvince investors of that.
But at the same time I, youknow, I agree with you.
(20:57):
I think that this could bedefinitely a vintage year and
we're seeing that in hospitalityas well.
And I just want to shift alittle bit too.
I know you folks coverhospitality.
Just curious your thoughts onhospitality because we're seeing
, at least from our perspective,there was almost a complete
halt on building hospitalityduring the pandemic, for obvious
(21:18):
reasons, and then since that Ithink, there's been a little bit
of a distaste for it or just,you know, hesitancy around that.
So there's we're seeing acomplete undersupply of new
hospitality and then a lot ofkeys you know units, hotel units
were taken off the market and alot of conversions from hotel
to multifamily.
So your thoughts on hospitalityin the market and kind of where
(21:39):
you see things.
Michael King (21:40):
Yeah, during COVID , to your point, our team did a
number of conversions from callit economy-grade hospitality to
multifamily, whereas studiomicro-unit conversions.
That did very well but that wasa product of performance
metrics just coming in a lotbecause people weren't really
traveling as much.
Right, fast forward to today.
(22:01):
Most hospitality owners aredoing very, very well.
Performance numbers are back up.
But, to your point, from adelivery standpoint, there's
been very few new deliveries inUtah over the past even
five-plus years.
Downtown you had Elliman Lake,meridian Highland, regency, you
had a Fairfield out inCottonwood deliver, but still
(22:22):
very, very light from a deliverystandpoint.
I think a big thing when you'relooking at hospitality
development is people are tryingto figure out how much we could
push ADRs right while stillhovering around call it that 70,
75% occupancy level.
And it's the same situationthat multifamily is going
through.
Where you know multifamily ispushing rents.
We're seeing $4 rents and a lotof product.
I think hospitality developersare trying to figure out hey,
(22:45):
how much movement is therewithin Utah to push rate up and
it's unproven at this time butto hit the yield to develop
hospitality.
It's the process we're havingto go through.
It feels like right now and wesay, multifamily, is incredibly
low velocity in Utah.
I think hospitality is evenmore so.
I mean, apple Hospitalityrecently took down three assets
(23:06):
in Utah which are the morenotable trades.
But aside from that it's verythinly traded and I think that's
just a testament to theperformance in Utah.
Most ownership groups that ownin Utah and I'm sure it's the
same for you guys they're doingvery well right and there's no
reason to sell but there'sreason to grow.
So if there is an asset thatcomes online, you're probably
going to have, you know, 15, 20groups looking at it trying to
(23:28):
bid on it, which is great if youown an existing product.
I think in our eyes we'retrying to look at OK, what is
the future for hospitalitydevelopment in Utah and how much
farther are we going to pushrate?
But ultimately it's a reallyreally good position to be in,
particularly now as we'vestabilized.
We clipped up 22.
Everyone is performing reallywell.
I think we are now going tostabilize down and see what
(23:49):
future performance numbers aregoing to look like across the
board for all hospitalityproduct.
Rachel Oh (23:54):
Yeah, no, that's super interesting.
You know, we've developed allalong the Wasatch Front kind of
in the earlier years.
We haven't done anythingrecently We've been shifting a
little bit more to Arizona andArizona's, you know, growing in
a huge clip right now as well.
But that being said, yeah, Ithink that you are.
I think it'll be interesting tosee how hospitality continues
(24:16):
to grow.
I mean, I thought for sure,with that Hyatt Regency delivery
of the 750 plus rooms, thatthere was no way right.
And then right behind that camethe La Meridian and the Element
and all that, as you hadmentioned, and they all seem to
be doing really well and our ACis doing phenomenal downtown.
Michael King (24:31):
Yeah, and to that point I think if you're looking
at just downtown Salt Lake City,those three hotels, in
conjunction with the other onesthat are in downtown, have
derived a lot of the walkabilityright, so office has been
quieter Downtown utilization isstill down.
A lot of the activity we'reseeing downtown right now has
been a product of the hotelsthat have gone up, which is
(24:53):
really exciting to see and Ithink this is a testament to if
you're building good producthospitality and sound markets,
it's going to drive walkabilityand it elevates the entire sub
market and we've certainly seenthat downtown.
Rachel Oh (25:05):
Yeah Well, and you know we were just with Ryan
Smith Smith Entertainment Groupwith all the NHL stuff that's
happening, and then of course,the Larry H Miller Group with
MLB and I just think, with allthe professional sports
activities and things coming toUtah as well, I think that's
going to continue to drive theneed for hospitality and for
(25:25):
everything else.
It's so exciting.
It's again.
Kip, you've been here thiswhole time.
It's got to be exciting for youto watch the state grow like it
is.
Kip Paul (25:34):
Oh, absolutely, when I was the age of Michael and JT,
we'd get some of theinstitutional groups that would
come to the market and say, tellus why we should invest here,
and we'd try to give them ourbest pitch and apparently we
weren't very good because notvery many of them came and fast
forward.
To today it's the exactopposite.
If we put anything on themarket of quality or substance
(25:57):
of size, at least 50% of thebidders are pure institutional,
if not 100%.
So it's completely reversed.
Rachel Oh (26:04):
Yeah, it's completely reversed.
Yeah, no, it's interesting yousay that, kip, because a big
part of our business is thedevelopment side, and one of the
things that we're able to dothat, you know, other groups may
not be able to is that we haverelationships with landowners
and or we just have a reputationand we are quote unquote locals
.
So I remember we were talkingto one landowner because we're
doing build for rent and I'lltalk about that in a second and
(26:33):
you know they had lots of groupsapproach them.
They liked us because we werelocal, because I think back in
the day they were snubbed bysome East Coast group that just
kind of treated them like hicksand they never forgot that and
so meaning they will only workwith locals because they
remember being treated so poorly.
And now everyone wants to betheir friend and wants to buy
their land and they're like,nope, nope, you treated us like
we were hicks.
And now you know so it's.
(26:54):
It's just so interesting howyou know, to your point, 10,
maybe, even well, obviously 20years ago, but maybe even 10
years ago, people just did nottake this region seriously and
now they're all clamoring tocome in and they're going to
have to come work with a localtype person in order to get in,
because people just distrust,right, those outsiders.
If you will, I think that'llchange, but for now there's
(27:14):
still a little bit of that.
So it's interesting that yousaid that, kip, because we had
that exact same experience.
So to our favor, actually.
So let's talk about that.
We've been talking a lot aboutmultifamily.
One of the things Peg also does, and I think you folks are
familiar with too, is we'redoing build for rent.
So we're building single familyrental communities along the
Wasatch Front and we're tryingto at least it's hard to pencil,
(27:35):
but we're trying to do that andI wanted to get your thoughts
on do you think that the WasatchFront is becoming more of a
forever renter market?
It didn't used to be that way,I remember and I'm dating myself
but back in the day you couldsave up for a couple of years
and do a down payment and buy alittle home, and you know, after
(27:55):
college graduation, and it'sjust not the same anymore.
So curious if you think thatthe Wasatch Front is becoming
more like the nation in terms ofunaffordability and the need
for rentals in this region.
JT Redd (28:07):
Yeah, it's a great question, a great topic.
We are unfortunately losing ouraffordability story here in Utah
and I think it comes down toour land constraints, right,
we've got mountains to the east,mountains to the west, lakes to
the west, right, and so we havea finite amount of land and you
can only and you can only, youknow build so much and
(28:30):
ultimately, I think that thatthat build to rent space is
going to solve for some of that.
As millennials get older, right,they don't want to be in a
small apartment anymore, butthey still can't, unfortunately,
afford a house to buy.
They want to continue toprogress in life, they want to
step up, have more space, youknow, as as their family grows,
(28:52):
and I think that's where we'reseeing a lot of the demand for,
for build a rent product.
Additionally in Utah, it onlyrepresents about six, 7% of our
existing inventory base, right,so not very many or not very
much inventory of BTR and a lotof demand.
So, for, if you can find theacreage that you need to build
(29:14):
the density that you need,ultimately you're not going to
be competing with all the restof the supply in the market.
Rachel Oh (29:20):
Yeah, yeah, no, that's again, that's what we're
seeing, and you know I hate tosee it.
On one hand, from an investmentpoint of view, it's interesting
, but it's so crazy how theWasatch Front is falling suit
with the rest of the country.
But to your point, I think it'simportant to note that it's
more about land constraints.
So it's less about, I think,what the rest of the country is
(29:44):
seeing, but more just about theland constraint nature.
And then you can see that whenyou're trying to buy a home here
, I think people are surprisedat the cost of homes, given the
quote, unquote affordability.
You know story that up untilrecently we're probably been
telling Okay, so let's shift alittle bit.
I think I can't remember who itwas that mentioned this earlier
on.
But what about distress andforeclosures?
(30:05):
I think I know the answer tothis, but are you folks seeing
that now, like you know, there'slooming trillions of debt
coming due and people are all onthe sidelines kind of waiting
for distressed assets andwhatnot?
Tell me about what you folksare seeing.
You know, in this region Do youthink there will be the
distress type properties that alot of the country is seeing?
Kip Paul (30:26):
So, as JT mentioned earlier, our market is
weathering the downturn betterthan most.
We thought we would see moreforeclosures and challenges out
there than what we have.
To put that in perspective in2022, we did about 19 BOVs
broker opinions of value.
In 23, we did over 100.
(30:47):
And I think that really goes tothe point of investors.
Owners, developers are tryingto figure out the new world.
If you will.
Recent BOVs that we've done.
I think we've technically onlyhad one lender foreclosure or
imminent foreclosure.
There's probably two or threemore pending out there.
(31:08):
Our belief is that there's morebeneath the surface that will
be coming.
But you know, we get call aftercall from investors wanting to
come into the market saying sendus the list of all the
foreclosures.
Well, there's actually kind ofzero so, but they are starting
to occur.
But I think it's going to belight.
I don't think it's going tounfold the way other market
(31:29):
cycles have.
Rachel Oh (31:30):
And will it be one asset class or a couple, or like
what are you seeing?
What do you predict will makeup that list?
Kip Paul (31:37):
You know, top of that list is going to be office.
For sure there may be a littlebit of a.
There's one foreclosure on apartially built apartment
complex right now, so maybewe'll have one or two there.
But the counter argument as towhy there are not foreclosures
is there's still a lot ofcapital in the market and in the
world, and so if an owner getspressed hard enough, there's
(32:01):
always capital out there.
It's just going to be veryexpensive capital to solve the
problem.
Rachel Oh (32:05):
Yeah, yeah, no, we're definitely seeing that.
No, that's super helpful.
I really appreciate that.
So, okay, kip, since you werekind of commenting, you've been
through, then, a number ofmarket cycles not to underscore
that but I think that gives yousome perspective, more so than
JT and Michael can offer.
How does this current cyclecompare to prior cycles?
Kip Paul (32:30):
Rachel, did you just say I have platinum or silver
hair?
I think that's what I heard.
Rachel Oh (32:34):
I think you have beautiful platinum hair.
Kip Paul (32:38):
Fair enough.
As tough as this cycle is, thisis actually one of the easier
cycles we've been through.
If you're 40 years or youngerand you've been in the business,
all you've seen is rentsincrease.
There's no downside, nothingever goes wrong.
It's just been how much moneycan investors and developers
make?
And some of the more seasonedguys I remember through this up
(33:03):
cycle, roger Boyer wouldcontinually ask his team have
you guys ever considered thatrents could go down?
Yeah, and they would look athim like he was crazy, right?
So, relatively speaking, I'mnot saying this is without
challenges and without pain, butthis is certainly not the worst
down cycle we've ever beenthrough.
Oh, 708 was really brutal.
(33:23):
We watched major entities gobroke on a daily basis.
Sure, we watched major entitiesgo broke on a daily basis and,
going back to the late 80s, thelenders foreclosed on.
It seemed like the entiremarket.
They literally most of you guysare too young to know these
remember these days, but thebanks would literally publish
thick magazines of all of theirforeclosures and they were
(33:45):
begging for somebody to come buysomething.
So you've got to keep it inperspective.
We just had 14 years of nothingbut great times.
There's a little adjustmenthere.
You know, the younger peoplethink the sky is falling because
interest rates are seven ratherthan three.
I remember the days when theywere 18 to 24.
So, keep your wits about you,it'll all work out.
Rachel Oh (34:07):
Right, no, no, I appreciate that.
To that as well, and any one ofyou can comment do you feel
like Utah weather, is things alittle bit better than the rest
of the country?
Thoughts on that.
Michael King (34:19):
Yeah, I mean, I think it's just a product of the
number of people moving intothe state right, and that's
shown by kind of the growthwe've had across all product
type.
It's quality of life, it's costof living, it's proximity to
the airport, it's all theimportant things.
You can get a direct flight outof Salt Lake City to just about
anywhere.
All those things mixed together, I think, has resulted in the
(34:42):
growth of the state.
That, in combination withtogether, I think has resulted
in the growth of the state.
Um, that in combination with,again, I think it's if you're
looking at or speaking withsomebody from New York or
California or even Chicago, youknow, to Utah natives it all may
sound expensive now but to allthose people coming in they're
saying, hey, this is, this isstill half of what it was where
I'm coming from, um, and I thinkthat's that's a big part of it,
(35:04):
in combination with things like, you know, the announcement of
sports teams.
I think that's going tocontinue to aid the growth of
the state.
We're a maturing market and youknow, we're slowly becoming I
don't want to call it real, buta very big primary market, which
is exciting.
JT Redd (35:21):
Yeah, we like to say that investors can't control the
macro, they can't control theuncertainty, they can't control
what the Fed does, they can'tcontrol interest rates or the
volatility.
But what they can control arethe markets that they invest in,
and what we're hearing is thatinvestors are hyper-focused on
high-growth markets with solidcore fundamentals and Salt Lake
(35:43):
checks all those boxes, rachel,you mentioned.
Us News, and World Reportranked us the best state in the
country, two years ina row.
Now, we're one of the mostdiverse economies in the country
, so we're not handcuffed ordependent on one industry, which
helps insulate us.
We're one of the most fiscallyconservative states, one of the
(36:07):
few states with a AAA creditrating.
I mean, the list goes on and onand on the airport, the
infrastructure, all of that andso I think everybody's fighting
the macro level volatility.
Well, go to the markets thathave that high growth potential,
that long runway, and havethose strong core fundamentals.
Rachel Oh (36:27):
Yeah, no, I appreciate that.
I also again myself atransplant.
I grew up in Washington, but Idid go to school at Brigham
Young back in the day and thenspent a lot of time in Los
Angeles in my career.
But I also think there's auniqueness to the state in terms
of not just fiscal prudence,but I do think that the overall
(36:48):
populace tends to be.
You know, they called thebeehive state for a reason it's
industrious, I think, kip, evenin your bio it talks about your
hard work ethic and I imagine JTand Michael are just the same.
But I think there is just a aunique character to the state,
of its people and the peoplethat come here and the people
that choose to stay.
I've just never seen anythinglike it.
(37:09):
And we have our team is growinghere at PEG, and when I started
we were at 80 in the office.
We're now at 160 and weactually have 1100 employees
nationwide.
And the work ethic and I don'tknow, the commitment to
excellence and high integrity, Ithink is just something we hear
constantly from folks that cometo us from different states
(37:29):
that they hadn't seen before,and I think that's what makes
Utah super special as well.
So again, that's my little plug,but I think there's so many
things and so I'm just so.
I mean, I love my adopted homestate and for all that, okay.
So we're going to wrap up alittle bit, but I'm just going
to ask each of you one questionIf you had $100 million, where
(37:55):
would you invest it today?
And I'm going to ask each oneof you and I don't know who
wants to start, but if you eachhad $100 million, where would
you invest it today?
Kip Paul (38:03):
I would spread it among all of the different
market segments.
Each one of them is going tohave its up times.
Each one's going to have itsdown times.
They're all going to havedifferent risk profiles at
different moments in time.
For example, if you chose toinvest the money in office right
now, it's a bigger risk, butthe potential reward could be
very significant, depending onthe time it takes for the office
(38:26):
market to recover.
I don't think you can go wrongwith multifamily retail
industrial hospitality.
To Michael's point earlier,it's really about just get into
the market.
Utah is going to produce goodresults for everybody.
Rachel Oh (38:41):
Excellent.
Michael King (38:42):
Yeah, I agree with that.
I mean I think if you're buyinggood assets in good locations
at a low basis, you're going tobe positioned very, very well.
If you're, you know, into GibbsPoint on Office, it's at an
incredibly low basis.
We recognize there's going tobe pain for the next few years
but I think there's a few goodbuys out there that you know
will benefit from the recoveryof office.
(39:03):
And then on themulti-hospitality and retail
side, I think spreading itacross all of those diversifying
risk a little bit is incrediblysmart and buying below
replacement cost.
JT Redd (39:14):
Yeah, I agree with all of that.
I'll get a little bit morespecific, I think, trying to
with the supply story we talkedabout on multifamily trying to
find existing multifamily assetsin those heavier supply areas
where everyone's scared to buyin right now or scared to build
in, understanding thatreplacement costs in our market
(39:36):
in Utah to build you know,podium right now is $400,000 to
$450,000 a unit.
I would look at reallywell-located apartment assets
that are $100,000, $150,000 perunit discount to that new
product and that replacementcost that allows you to be a
low-cost provider in the marketwhile still getting great assets
(39:59):
and great geographies, allowsyou to weather that supply storm
, storm and you'll be abeneficiary of that basis once
we are back in those tightconditions again.
Rachel Oh (40:08):
Okay, excellent, I couldn't have said it any better
.
I love that.
I love diversification acrossasset classes, I love trying to
find the right cost basis andthen, I think, commitment to
this great state of Utah which,if those of you have not yet
visited, you've got to come andI will personally take you out
and about if you'd like us tojoin.
So thank you, gentlemen, forjoining us this week.
(40:29):
Your insights have beenincredibly insightful.
So honored to have you all join, and thank you to all our
listeners who have joined ustoday.
From the peaks of the MountainWest, I am Rachel oh, your host
for Peaks and Portfolios by PegCompanies.
Thank you all for joining,until next time.
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy And Charlamagne Tha God!
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.