Artificial Wave Real Estate is a Thing: Insights with David Likins

[Music] The WavePool Mag Podcast is made possible due to support from WavePool operators, technology providers, and the growing list of companies doing business in the surf park space. For commercial opportunities, reach out to us at [email protected]. Thank you and stay stoked. [Music] I'd tell you, country clubs and seminars biggest waste is a crime real estate. Well, I've dead people. They don't be buried nowadays. The college, you're right, first grain, he'll tell you, we just bought property right behind the great walls on the good side. You worked at all American burger. Seven months ago. I knew it. Why don't you get a job for Koi? What for? You need money. All I need is some tasty waves, cool buzz, and I'm fine. When we mention real estate developer, there's a certain preconceived notion, and we tend to drift toward Rodney Dangerfield's character in Cadyshack. Along the same threat of 80's cinema stereotypes, we have Spakoli from Fast Times at Ridgemont High. David Lykins is proudly neither. Well spoken, centered, and deeply knowledgeable on all things WavePools, we spoke about real estate development and club operations all within the context of surfing. David develops and operates surf-centered real estate and club projects. He describes his work as figuring out where artificial wave facilities can function as part of a larger business. That includes evaluating land, working with capital partners, finding local development teams, planning operations, and making sure the surf component can be supported by the surrounding economics. He says the key issue is that surf parks have fixed capacity, which affects pricing, membership structure, and overall project design. His earlier work included executive roles in the ski industry, serving as chief operating officer at the surf ranch, and later helping reposition Waco's surf. In these roles, he focused on resort operations and customer use patterns. At Murray Weather, he is now applying that approach to projects featuring endless surf technology in Baja, the California desert, and other markets. [Music] You all set? Yeah, all set. Okay, right on. Welcome to the WavePool Mag Podcast. My name is Brian, and my very special guest today is David from Murray Weather. David, welcome. Thanks. Thanks for having me. I appreciate it. Yeah, yeah, it's great. I'm really stoked. We got to finally catch up, because I know your company has been so busy, and getting information as your projects come about is a little dicey sometimes. So I'm really stoked to have you on the show so you can share more with our audience. Yeah, glad to be here. We tend to be a little under the vest until it's ready to rock and roll, so not surprising. Yeah, okay. Yeah, and it's funny like that, because I find a lot of, excuse me, ventures are either very, very vocal, like, hey, we're doing this. But more and more, they're flying under the radar, just kind of going quiet until everything's ready to launch. Yeah, I think that's probably maturity of the industry. You know, if we had a dollar for every announced project over the last five or six, ten years would be we'd all be rich, but a lot of times those are those are ideas, and they're using PR to raise capital. And I suspect that folks have figured out that's probably so we not the way to do it. I think we've known that as we're real estate professionals, and so we've kind of seen this before and you know, you don't have really have a project until you've got entitlements and capital and all those pieces. Kind of laid out and thankfully in my opinion, the industry is getting smarter about recognizing we want to talk about potential projects because the kind of landscape of projects that have been left by the wayside, it always raises questions about what about this and what about that they sound like failed projects, even though they were never real projects. They didn't fail, they just never got the momentum. So I think it's good for the industry to be talking about projects when we're really ready to go build them as opposed to when we're ready to ideate on them. Yeah, but there was that whole pre-COVID 2020 era where it was just, you know, it was wide open, you could do anything. Yeah, I mean, you know, look, it, I've been in this industry since probably close to the beginning and you know, it always, it's taken more time to mature than I would have anticipated when I got into this space. I guess that was probably eight years ago. And so it's, it has taken a long time and that pre-COVID period, it was so exciting to see based large on what we were doing at Sir Franchin, particular perhaps, but you know, it was one of those scenarios where it seemed like a wide open playing field in a blank canvas and a lot of people went after it as, you know, as this is the next thing. And then the reality of the complexity of these projects became more relevant and that's when the when the kind of the model gets smarter you recognize it's not small amounts of capital. It's not bad real estate. It's, you know, you got to be in good places with good projects with good partners. So that that that has taken hold. That's probably why it's taken so long in particular North America for the market to mature. Yeah, well, let's talk about your your history. You were with Kelly Slater Wave Company, you were with Waco surf. Can you give our audience some background on your experience? Yeah, yeah, I was, I was a long time ski guy. And so I was in North American skiing. I ran some of the larger resorts in the Western United States in particular. There was most notably probably the president of mammoth resorts, CEO Big Bear, CEO of Kirkwood, and then when we sold mammoth. I was in what they called the office of the CEO at what became Altera. So I spent some some legitimate time, you know, in the large scale kind of consolidated ski resort industry. And while I was there, I got a call from a recruiter from the world surf league who had had been tasked with putting together the business side of manmade surf at surf ranch. So my my first trip to surf ranch was pre future classic when you know, we were just about to roll out, you know, the actual kind of viability of the technology as a destination. And or contest platform. And I joined shortly thereafter. I was enthralled by the opportunity. There was a lot of synergies and similarities to how in particular early ski was developed. But you know, immediately we saw the benefits of in particular of resort ski was worth operating background. It turns out I happened to live in San Diego at the time as the president of mammoth and was in a pretty good position to be able to go jump across the street and work in our offices in Salonapiche, which, you know, obviously the kind of hotbed of technology is down here in San Diego. I was fortunate to be here and I was fortunate to get an opportunity very, very early and we kind of got to work at putting the business side of surf ranch together clearly the technology existed. You know, brilliant people doing incredibly interesting things, but there was still this like, how do you how do you make money at it? I think at the time, I don't think we really understood what it really cost to develop the facility, you know, surf ranch was built in a number of versions over time. And you know, the real complexity of building that we had to rebuild their couple times from the moment that I got there. And we did a lot of work to kind of institutionalize or or kind of foolproof the technology itself to make it a viable destination business that you know excited to see how that's done since then. But and I think they were smart. I think they wanted ski people because they understood that there was, you know, a lot of similarities in terms of the skill sets required and the guest experience components and everything from, you know, the price elasticity down through, you know, what the guest experience had to be. But then how do you build maintenance teams to keep, you know, large scale, heavy industrial equipment operational, et cetera. So I was fortunate to go to to go to surf ranch as the COO and really, really enjoyed that that experience. I think it became clear that, you know, the world surf league surf ranch business wasn't going to become its own kind of branded across the world type of it was going to be a technology licensing company. at that point I had an opportunity. to go work as one of the three founders of Beat Street, which I did with with David John for a stretch as we kind of thought through platforms for development. That led to an opportunity to join a group that was acquiring Waco, which I was able to do as an owner and keep operating officer and president for a few years, which was great, really taking an existing project that needed to be repositioned and had an opportunity to do that with the team that acquired Waco. Then I had a chance after that was kind of coming to a spot where my value had been kind of fully applied the Maryweather team who I knew because when I was in the position at at the WSL at Surfratch, we'd licensed the technology rights to develop in California and Mexico to Maryweather. Maryweather had of course the Coral Mountain Project at the time and they were preparing to set up operations. So I joined Maryweather as kind of their surf guy for the first stretch and we were not only establishing how we were going to operate the Coral Mountain Project, but then because we had these licensed rights for Mexico in particular, we were really pounding the pavement in Mexico looking for dirt that we could develop into a project which eventually became our our our Cabo Real Surf Club project that we're developing now down in the Los Cabos area. Okay and it's fascinating you mentioned Kelly Slater with company. I mean you you say you had to reinvent the machine or work on the machine several times, but a lot of people in the industry will say that's the kind of the gold standard model for successful surf part business that is making money. It always has clients, there's a huge demand. How did that come about? Like you had the space in Le Mans, obviously not near anything. You have this technology that generates one way that would be three minutes and you don't have a lot of throughput. How did you take these seemingly detractors and turn it into a positive business model? Well yeah, I mean this is where everybody has where we're all the different models start to break apart. You know everybody looks at Kelly Slater wave co-incences, well you don't have the volume throughput. So how do you have how do you have a viable business? And I always equate to I'll go right back to skiing because it's super easy and it's an area that I know pretty well. I look at it and I say helicopter skiing has no throughput either. You know on a good day you get you get 12 rides to the top of the mountain and guess what? Every helicopter, every good helicopter operating business in North America is so full that you can't make a reservation for 2027 right now if you had to. And the truth of it is is that if you put the right experience together, supply demand will always come into play and where the supply in their case await every four minutes. I think the actual number was, you know, a wave of every four minutes for 10 guys for a day is an as a spectacularly fun experience. And so is it a good commercial viable model for a day use facility where you pay an entry fee and come count your waves by a dollar per wave? No, probably not. But we were able to put together a day use facility that people's days were were exceptional. And their experience when the moment they arrived through lunch through the afternoon, you know, for the right number of people at the right price point, they received what was to them exceptional value and quality. And I think that's a piece where, you know, in Maryweather sees a lot of a lot of of business plans through our office for projects. And so many of them don't differentiate between the model that they're trying to accomplish. And they they build the models on a day use facility, thinking about it in terms of throughput and capacity. And oftentimes it's because that's the way they're going to recover these large quantities of capital. So you kind of like need 60 people in the water. And I think it surf ranch. I think the WSO had it had had their model correct, which was they wanted this very premium experience where it felt like you were truly getting a destination type of type of experience. But and you were doing it in La Mora. And it didn't matter. We had gates up and you know across the street, you know, if they're mayor may not have been, you know, crack houses across the street. But it didn't matter because we created such an interesting experience inside the gates that, you know, you come in and leave. And next thing you knew, you were back in northern California, southern California, you know, on the way to the airport. And you just had this great day. And it was one of those, and I'll be honest, we kind of fell into it a little bit. You know, I recall the first time we set the price for the day, we'd actually received a phone call from from a representative of a fairly well-known actress that, you know, wanted to come surf for the day. And I took the call and I said, you know, what? She said, well, what would it cost us to do? And I thought, I didn't know, I didn't have a good number. So I threw up $25,000 as what I thought was probably a reasonable expectation for we'd be very profitable, but it would still cost us a lot of money to let her come and surf for the day. And the answer was such a fast yes that I thought, oh, I kind of did that wrong. And she ended up not coming. It was a December and ended up not working out. But the next time somebody called and doubled the number. And there was a slightly slower yes. And that was all the science that went into what the actual price point was going to be was this slow process of what seems about right. But it's it's it's it's the way it works. It's the price the market is willing to bear. And we learned this in ski, you know, you go back, there was a stretch in ski in the 80s and 90s where every year ski resorts would add a dollar or two dollars to a lift ticket, you know, and they if they got aggressive, they they'd take it up to it's $3. And at the same time as this was happening in the ski business, movie prices were going up 10, 20, 30 percent, you know, professional sporting event prices, concert tickets, they were all going and they were they were rising at double digit inflationary rates and ski was going up a dollar a year. And as an industry, we kind of looked at each other and said, well, this doesn't make a lot of sense. Like let's let's see. And so we started to add prices. And of course, the the lift ticket prices were going and we started taking them up exponentially while preserving the experience at the season pass business. And so you can really have a season pass business back in 1990. And now you have this polarization of of fairly low cost season passes, but the day lift ticket prices, you know, 200 to 300 dollars when it used to be 75 to 80. And I think that's that was that was a really good learning experience of if you create a multi-generational family experience that people will, you know, value that you can really charge where you want to be. And that's kind of how we put that side of the business together. And that became what what is modern day ski pricing where we find ways to create value for the heavy users and we find ways to extract value for the company when people don't have the same level of commitment in the term of, and especially in the form of people that ski two or three days a year, you know, they're probably going to pay a lot more than somebody wants to ski eight or nine. And I think that kind of translates into some of the models that we're seeing in in surf today. And that's really fascinating being able to see that in, you know, a nascent surf park and being able to make it work and it continues to work to this day. On the other side of the coin for a throughput surf park is a place you also had experience with Waco surf. Can you tell me about your your role there and having your hands in evolving that surf park? Yeah, I think I think the group that you know that we created when we acquired the facility from the founder Stewart, I think that there was a great mix of, you know, experiential kind of a desire to create an experience in Waco, Texas, but we were really southern California people. So I think we understood it through a different lens than Waco had been operated at previously. And so, you know, if you looked at the original founding team and the organizational group that he put together, they were truly inherent local Waco, they were Waco surfers and air foot riders and it was really, you know, they were running a water park that had some attached surf. And I think the opportunity that we saw was through a southern California lens, given it was the only operating facility in North America at the time, other than surf ranch, which was as you just already suggested kind of outside of most people's ability to access. I think Waco was this opportunity to say we can we can bring a southern California lens to Waco, Texas and operate the facility. with, you know, through a surfer's view, with an eye towards destination guests that really recreates a surf trip in Texas. And, you know, we still operated the water park that was there, but we tried really hard to separate those two things. And part of that learning was, you know, what we learned at surf ranch as well, which is that people, it's kind of like when you look at a ski resort, you know, you don't really want your advanced skiers and your beginner skiers in the same area. It's, it just takes away from the overall experience. And I think part of Waco was separating this kind of like Texas water park model from a true destination surf. The waves were fantastic. And the waves every year at Waco, the waves got better and better as we learned more and more about how to program the waves, how the individual surf park, the actual surf box that you're in, the concrete, the water levels, you know, as you kind of fine tune those things and those, those waves got better and better. We were able to put together what became just this great exodus from around the world, frankly, mostly Northern America, but, you know, people came from all over to come and surf man-made waves. And I think we were in a very, very unique position as the market, you know, the host at that point in time. We were in this great spot to be able to take something that had been built, which, you know, look, if Stewart Parsons took a lot of risks and that was a very visionary thing to do and I give him a huge amount of credit, able to go do that in a place where, you know, it's very almost nonsense. I go to think that would be successful. And the concept that we were able to then capitalize on his investment and his efforts to then refine it to an experiential perspective, you know, take a guy like Mike Schwab and put him into the position with his wife Amy and, you know, find a real cultural vibe that really fit. And for the first couple of years, you know, it was it was an unbelievably successful effort to pull surfers in from all over East Coast, West Coast, Hawaii, you know, as there was no competition. And then over time, as it evolved, it was then, you know, how do you knowing where competition was coming and there was going to be surf parks and other parts of the world? How do you then build a, what I'll call a domestic strategy? How do you then go become a great place for Texans who've never surfed to be able to use it as a place to get better and better? And I think when we bought the facility, we weren't running any beginner sessions. It was all, you know, big waves. It was, you know, advanced settings. And, you know, I think by the time I stopped participating, it was, you know, three or four beginner sessions a day with mostly Texans that were out, you know, using the facility in the way that you want them to. You want to build that build your model. And, you know, Doug Coors had had kind of at that point in time and inland it failed. But inland had proven that there was a domestic market for beginner surfing in Texas. Yeah, Doug's, Doug's real, real good product was a beginner wave at inland. And I think that, you know, I had an opportunity to be part of the team that bought inland when I was still with the world surfing. And so there was, there was precedent there that it could be successful. And I think that the team in Wake goes done a really nice job evolving that business into much more of a full service product that is both good for destination, but also good for the local market. And a lot of the, I mean, a lot of the projects that you see out there in the, in the US market in particular right now, if they're going to be successful, they're going to have to understand how to nail that local never ever. Like that's a big part of the business is can you get non-surferers to use your surf lagoon as a place where they recreate that they'll come five or six or seven times a year. That's the real success that you're going to have is, you know, can you, because destination is going to be destination. And I think that as we develop more and more of these man-made surf facilities, I think we're going to find that people aren't going to get on a plane and fly over to other parks to get to another park. The technology is a little bit too asymmetric. There's too much too much, they're just too similar to want to be able to go fly somewhere else. It's just not that differentiated from a technology point of view. So you're going to need to be locally attractive and have that capability to develop a local market. And you know, some markets are, are much more conducive to success than others. But if you're going to be in a place that doesn't have a large natural population or a bunch of transplanted Californians is the case maybe as well, you're going to need to be really smart about how you develop your beginner sessions so that you can create your own market over time. I think Wake was done that very well. Wow. That's, it's fascinating. Thank you for all the insight with the two very different models. And you mentioned space is growing. There's so many parks opening up right now. For a long time, it's just Kellys and Waco in America. Now you have Virginia Beach and you have Palm Springs surf club and you have a couple more opening this year. Can you point to a model that you see whether domestically in the US or internationally that you're impressed with like, oh, they got it right. They kind of figured out their market, their audience and their satisfying both levels of surfers. Yeah. I think the the the place where I think it's spectacular is is South Paulo. I happened it. I took a trip down there a couple months ago and was able to kind of run through all four of the South Paulo facilities. And that was fan that was just fascinating to me. The club model that they built in particular and whether or not you're talking about Prada Grama and a wave garden or Boavista and the eight WM for technology or what's now I was up in Rio as well and saw the new endless surf facility being constructed there. But you know, they've they've really embraced the model of how do you create and use the the surf lagoon as an anchor amenity to a broader experiential real estate development. And I think to me and to us as Maryweather, that's really the market where we see the opportunity being created because when you anchor use it as an amenity to anchor overall real estate, you're creating an opportunity to lower the the basis cost and the development of the surf lagoon itself. You know, surf lagoons are inherently more expensive than anybody thinks. And I always say, take the price that somebody told you and double it and that's probably what you're going to end up spending by the time it's all said and done. So I love that model where you're saying, if you want to surf here, you need to be a member, right? Whether that's a member with real estate or a member of a club, you're just baseloting your economics both in terms of the original capital cost required as well as the operating expenses that are there. And I think the Brazilians have a unique model that they've got clubs that have two to three thousand members still anchored by a surf lagoon. So you think the capacity's not going to work, but they've got so many other experiences around it that, you know, they're not only building surf lagoons where that's the only thing you can go do. So think of a golf club as an example where, you know, you might get 300 homes around a golf or private golf club. In the case of Brazil, they're taking a surf lagoon within their adding, you know, gyms and wellness and shocks in the case of beyond the club, they've got an indoor surf facility, an indoor escape facility, an indoor ski facility. It's fascinating. So I do, I love what they're doing and I think that they've, I think frankly, they're proving, they're proving the success of the model because they're building, you know, what are they on their fifth one now? And there's probably three or four more that are already in the in certain stages of development. So you can't not look at that and recognize that that there's success there. The other one that surprises me is, is what's going on at the, at the O2 surf town facility in Munich where, and just to be blunt, you know, it's not my definition, it's not, it's not, it's not the Maryweather model. You know, we're not, we're not about to go build a day use public facility where people are coming in and you've got beginners on the wave with the, with advanced surfing. It's, but the, the fact that they've sorted out how to commercialize a facility and what has to be construed as a B minus location, but they have, you know, sponsorship activations and they're getting the level of first time never-ever's probably from across parts of Europe. I mean, it's so, it's such an easy travel market. But it, to me, that really surprises me and I'm really, really glad to see them having success in a model that honestly, I don't truly understand personally, like it's not, it's of no interest to me personally or to, or to Maryweather as a whole, but to see them validating the other end of the spectrum, in my opinion, is pretty impressive. And you have to, you have to kind of look at that because, you know, when I say B minus location, just because I'm not. so far outside of the commercial core. But it's important. Location is super important. I think if you look around the globe, you recognize that surf parks that aren't in good destinations, it's a difficult model to make it work because when you have to travel 45 minutes to an hour to get to a day use facility, you're going to, by definition, you're asking the question of, kind of what I'll call ADR and rate. You know, it's like uses typical hotel model, where your hotel, you make money by your average daily rate and your percentage occupancy. And the thing about surf, which is unique is we're a fixed capacity business. We can't just go make more capacity. A ski resort just adds, takes a fork pack, lifts, makes it a six pack, and you've increased the capacity up hill capacity by 50%. There is no downhill capacity limitations at any ski resort, maybe outside of the LA ski resorts. But for the most part, as you can get them uphill, they'll end up coming downhill. Surf, you're fixed. You can't make more wave. So you really, you have to be able to kind of understand your ADR, what you can charge for an hour, and what your percentage utilization of the facility is going to be. And so when you get into some of these tough drive markets where it's not exactly easy to fill up a Tuesday at 10 AM, like those are the, and I think the Germans have really shown, despite unbelievably tough weather to surf in at times, they've shown that you can in fact do a pretty good job of hitting a level of utilization that keeps the lights on. And so I really do, I think that's a good example where just shows the kind of breadth of the opportunities and the way that you can run and operate at different types of models successfully is good to see for the industry. Yeah, I mean, Munich is a really unique case having such a core surf culture there, built around the Icebox River, and then people are used to surfing in five threes with, you know, booties and gloves and everything. No, it's, I mean, it is, it's a, and you know, look, you said it, you said it correctly, which is the presence of a local surf culture cannot be, it should never be misunderstood. You know, the idea of having some level of local surf, people that you know are going to be evangelical about the development and the success of your facility. Super critical to any one of these things being commercially viable. Okay. And then as we get into this, you mentioned the kind of turn style model with Waco and with Munich and then the difference of having an anchor and a residential property. I've noticed over the past several years starting with private grammar that there's been more development aiming toward residential anchors. Do you care to address that? Is that it's just easier as like one, one developer said it's like, okay, you take 10% of your overall budget and you put a way pool in the middle and that is increases the value of the surrounding property, you know, by two or three times at least. Oh yeah. Well, let me look up. The starting with the idea of what your, of what your, go to the fundamentals. So if you're going to have a day use facility, theme park model or a water park model, whatever you want to call it, you know, the idea of all those facilities is you can keep adding capacity. And so on a big day, you can have just thousands of people go, go through the turn style and you can make money in that capacity. We don't think Serf is like that. As we've discussed, you know, Serf is a finite capacity concept. Your, your, your Serf Lagoon can only have X number of people in the water at a time. And honestly, the more people you put in the water, the experience degrades fairly quickly, meaning you'd much rather have, and you can see it in every facility around the country that has an option of a split wave or a long wave, the demand for the long wave is significantly higher than the demand for the split wave. People want longer waves. It's the unique aspect of a Serf facility. And so if you start with the premise that you're somewhat supply constrained and you want to then go decide, how do you maximize the value of that supply constraint? Either you're going to have these wild fluctuations in pricing on a day use facility, i.e. I'll spend $500 an hour because I want the long wave at the key time versus, you know, I'll sell it for $35 an hour in an off season day with bag weather at the wrong time. So you have that option, which seems to me to be a very, very difficult way to make money over time because the finite capacity, or you get to the other side of that, which is I'm going to allow a certain number of people to take advantage of the capacity. I'm therefore going to use that Serf Lagoon investment as the anchor amenity to unlock value in real estate. And there are lots of examples where people have used anchor amenities to create that value most notably golf. And so you can, you and I can go around the world and find, you know, tens of thousands of residential developments anchored around a golf amenity. And that golf amenity has, you know, generally speaking, it costs you $20 million to build and you need, you know, 150 acres to go do it. So golf has proven, go find a place where you have some space. You can't build a golf course in a downtown location, but you find a legitimately contiguous piece of real estate to a major metropolitan market or to a destination market and you build a golf course and you sell 300 home sites around it. And those 300 home sites have access to the golf course on a private nature. You know, golf courses cost more to operate per year than a Serf Lagoon is going to cost to operate because they're far more labor intensive than you that a Serf facility is going to be. And so you start to then just turn around as a developer do the math and you go, well, I need six to 10 acres of dedicated space to build a legitimate Serf Lagoon, perhaps more depending on what the experience is going to be. But, you know, yes, it's capital intensive. But if I can create incremental real estate value in that real estate and the contiguous into 300 people to go around, I think 300 is a right number for a private Serf facility as well, meaning if you just run all the math out with any of the major, you know, technologies, I don't think you could do it that way with a slater, but with endless serve for, or, you know, or AWM or Wabegarden, you could fairly easily accommodate 300 home sites. And people are going to feel like they got to eat as much Serf as they could. And you make that investment and you start to unlock that real estate value. And so our experience in Mexico is an example where we've taken a unbelievably beautiful piece of property, ocean views, spectacular, you know, on every, on every kind of aspect, but it's on the wrong side of the highway. And if you kind of drive between Los Cabos and Lucas and San Jose del Cabo and all the large developments, the Chilano Bayes, the Twin Dolphins, the Alderados, they're all located on the beach side of the highway. Our projects located on the hillside of the highway. And historically, those real estate values have been significantly lowered in the beachfront properties. What we're able to do by putting in this large-scale Serf Lagoon with these great ocean views surrounding it. Now we've taken the beach up the hill and we're recreating beachfront values at the Serf Lagoon, which obviously unlock a significant opportunity to think through how do you monetize real estate holdings where you have all the right ingredients, destination market with airlift. You know, people want to be in Los Cabos and look, there's real estate Los Cabos. There's beachfront lot selling for $40 million because that market's there. It's a safe place to invest, it's a safe place to and to visit. There's a huge amount of airlift from the Western United States in particular, but also Europe and other places. There's a domestic market from Mexico City. And then you bring in what we're doing and you say, well, now I've got this Serf Lagoon. By the way, I still have a world-class golf course and I have a world-class beach club that I can access underneath the highway. So it's a five-minute golf cart ride down to what is a spectacular beachfront experience for our members. And all of a sudden, you're now extracting two, three, four, five X, the real estate values, that that land was worth prior to that investment. And I think that's the real, if you can find those markets, I believe that you'll see more and more real estate that will be anchored by this experience that you get from a man-made wave pool. Maybe the same is true of hotel. We've opted to not put hotels into our facilities in particular because we feel like there's a value to the private club model that gets eroded when you have hotel guest access to your private club facility. But there are going to be models where the same is true of a hotel. You just can't build the hotel that big, meaning you have a 300-key hotel and you think those people are all going to surf. You don't have enough capacity in the day to meet the needs of that many keys, but boutique hotels, you know, 100-key type of hotels. I think it's likely you'll see similar economic benefits to hospitality that's anchored by surf in the same way that real estate anchored by surf is going to become in all the big markets. I think you'll see that style of development. Do you see the space evolving past turnstile, cert parks? Do you see it coming into a place where it's 10 years or now? It's just residential. Yeah, I think, you know, we have a project in Los Angeles that, you know, is a very non-traditional approach where, you know, a master developer is redeveloping tens of thousands of acres in Los Angeles. Maybe it's 6,000 homes in the community. And he's decided that a surf lagoon, which is really a turnstile model of surf lagoon, but he's basing it around the 6,000 homes he's going to build. And so imagine if you're, if you're, you know, a traditional DR Horton or Poolde or somebody who builds, you know, tens to hundreds of thousands of homes per year, and you can go take land that has a surf lagoon around it and take an area of North Los Angeles County that may be less attractive, but it's a startup home. Maybe it's a first time home buyer model or it's a slight upgrade home market. And all of a sudden, there's surf there. You know, that becomes way more interesting as a, as a primary home community. So I do believe we'll see primary home communities that are focused around surf. I think we'll see apartment communities that are focused around surf. A little bit of the Atlantic Park model, you know, a lot of that value was in the apartments that they were developing adjacent to the surf lagoon itself. So I think, I think that's absolutely a model that we will see in markets in particular around Sunbelt markets, like Southern California, that that'll be pretty viable. The other model that we see is what we'll consider to be a semi-private model. So we think that there is a handful of communities where there is an opportunity to create a club structure where you can be a member of a club. That club's going to give you using the club model to access surf. So it's not just surf because there's not, again, there's not enough capacity to really just have a surf club. You wouldn't do a ski resort that only had, that only had, you know, season pass users. And it's the same, same concept. But there will be a place where I could be a club member. I could have access to other health and wellness benefits. Maybe it's a gym spa, group exercise, you know, co-working. There's a, there's an anchor kind of using the club as the organizer. And then having it be this kind of, and this is kind of like beyond the club and some of the places you're seeing down in Brazil where they've, they've overbuilt the club numbers. They're constraining the access to the surf, but they're giving you surf plus all these other benefits. And we think that that's a model that has legs in North America. We have a project in South Florida that we're pursuing this and, you know, hopefully it announced that fairly soon. But to us, it's a great example where you're taking a hybrid of private club and you're going to, you're going to allocate a certain percentage of the surf capacity to the private club use. But then you're going to open up the rest of that surf capacity from a public use perspective. And now what you're doing is you're, you're, you're now holding the supply in your hand. So you're selling that excess supply, excuse me, to the public at a, at a significantly higher price because you now have total control of the supply demand curve in terms of the number of hours of surf that's available. And we think that in, in large metropolitan markets where you can find appropriate types of venue. And I think this is where Brazil is so interesting. You know, the two new facilities, they're smack in the middle of the population. There's employment, there's residential, there's all the pieces around it. So, you know, you're not going to travel 45 minutes to go to your health club. But imagine a place where you were five to 10 minutes away, just like a lifetime fitness model. Your gym was there, your co-work space was there. You had a great restaurant. You had, you know, your social community, you have all your wellness. You're going to be there five or six days a week. But you maybe only surf two days a week because you only have access to that much surf capacity. Then you're now talking about a very, very different approach. I think this is where, again, I think the Brazilians are way ahead of us in thinking about how this kind of works as a, as a part of a broader club community. And of course, you know, Maryweather, you know, we have our, our histories and golf clubs and athletic clubs. And, you know, we're, we're really, really big around this notion of club experience and building community around a centralized kind of shared desire, shared set of principles. And you could add surf into that mix. It becomes super, super interesting. You know, in the same way, you know, we're fans of private skiing as an option as well. We think that's the next piece of the of the ski world is how do you do the same thing, but do it at the downhill ski capacity. And we think just as as club operators and owners, we feel like there are a bunch of ways that the club model participates into something that that really becomes super popular. Because you you'd do this, you know, if you have the resources and you could apply those resources because you were a big surfer, you'd figure out how much you think you want to surf for your when you want to surf. And if if you could guarantee yourself access to to waves at a certain to meet your needs, you know, what would you pay for that? And we think that there's a pretty steep, a pretty steep market out there for people willing to pay to access surf under their own terms when they want it. And, you know, that price point, we believe is is viable to set up these clubs, you know, across various markets within within North America. Excellent. And let's, will you keep mentioning Maryweather and your various developments. It's a bit opaque as far as what projects you have other than Cabo, Bit and Coral Mountain. Would you could you could you explain for our audience who's in the company and what you have opening in the next couple of years and then your long-term slides? Yeah, absolutely. So, so Maryweather, you know, it's funny. Most many people understand who Discovery Land Company is, you know, obviously their projects around the world are wildly successful and the gold standard of, you know, of kind of high net worth club, you know, club development anchored by recreational amenities in their case golf in particular. So, Maryweather, which is actually Maryweather Lewis of Lewis and Clark, it started out as a subsidiary of Discovery Land Company. So, two of my partners who were one of which was a Discovery Land person for about 15 years or so, they they took that model and they they directed it towards redevelopment opportunities at a slightly lower focus point. So, if Discovery is looking at ultra high net worth individuals, we were probably focused on high net worth individuals, repositioning assets that perhaps have been distressed, looking at greenfield opportunities that were focused on a slightly different market. Over 15 years, you know, we've now spun out of Discovery completely many, many years ago and are focused on our own projects. We we own and operate clubs anchored around lifestyle amenities, including ski, golf, fitness, racket, and now surf. And I think when I think and opportunity, you know, Michael Schwab joined as a as a partner. Michael had had an existing relationship with the Kelly Slater Wave Company. I think he brought the passion for wave development in particular and that really started with the opportunity at Quarrel Mountain, which, you know, I think except for the fact we we lost the entitlement fight, which was unfortunate. That project, you know, was set up to be wildly successful as the first, you know, surf ranch turned into private real estate development. And I think, you know, we had the we had the the backers, we had the capital, we had the buyers, we had the the strategy. We just didn't get the entitlement through the the city council there in Lakinta, but that that led us to an understanding of the value of adding surf to traditional real estate development. And I think it allowed us to think about, you know, just how deep the demand for that product was knowing what we know about private golf and about racket and wellness and real estate development. We we very quickly looked at the market to say, well, okay, where else could you do that where you feel like you could be successful in extracting and monetizing real estate value that could absorb the significant capital contributions required to develop a surflago. And you know, the idea we took a very similar idea and recognized that Southern California being a market that has tremendous depth to it in terms of both second home community owners, but also just the vibe and the passion for surf, serve and golf from that perspective. So we started in Southern California looking out and in Los Cabos became the most obvious opportunity just given where real estate values were. So we spent five years down in Mexico looking for the ideal situation, which we found in the form of the Cabo Real Surf Club. We have an unbelievably great partner, a Mexican landowner with with deep resources both in terms of capital resources, but more importantly, the political resources to be able to pull off something as complicated as a way pool in that jurisdiction. We are which is obviously it's a it's a fundamental part of all of our approaches is you have to have really, really strong local partners because the complexity of entitlement and the pieces that go into that we learn that the hard way in Lakinta where we we probably miss red the market when we got into it. And so you know looking at it now we say okay, you know, Mary whether wants to be a real estate development and owner operator of private clubs anchor around these amenities with you know somewhere between 300 and 1000 residential development units around them, where are those markets where we can be successful and the characteristics are strong local partner, you know, a. A very, very committed local municipality who understands the complexity and capital partners that are willing to follow us into markets where they see the underlying value of the real estate as well as the potential profitability of the operating asset itself. And you know we're not in it for the profitability of the surplus, we're in it for the profitability of the overall real estate, but you have to be able to therefore operate those those amenities for something equivalent to break even you have you cannot have a you can't have a golf club that loses money because people who own the property. Eventually you have to pay for those losses you have to be able to operate the surf facilities and the golf facilities at something where the do structure is viable from a homeowners point of view which is always worth thinking about because you know all these things cost significant dollars to operate depending on where you are you know electricity costs regulatory costs insurance costs etc. So we kind of look at the at the universe and say there are certain markets where we feel this strategy has as tremendous legs obviously you know southern max southern Baja in particular we think is a market because of the high presence of the west coast kind of flight occupancy as well as people that are already in that market. So in Southern California is a market that is a no-brainer from from the perspective our project in the desert which you know as you probably have followed we when we lost the serpent title meant we were able to to go ahead and continue to pursue golf entitlement which was pre-existent. So we've now have an approved an approved plan for 18 holes of world class golf at Coral Mountain and we were prepared to convert that just into a golf community and you know again that's a market that we know well an opportunity was presented to acquire the thermal beach club parcel which was entitled interestingly enough it was entitled six miles down the road. So we have a different jurisdiction and you know from our perspective that created a very very unique opportunity to to combine two things together one was golf with a residential development in a beautiful location. So we just to think about surf as an adjunct amenity where yeah six miles away but fairly far farther away than six miles when it comes to the kind of demographics and the psychographics of the region. So we have the approach that was if we can add surf as ostensibly our version of a beach club to a high in residential golf community that you create the same set of benefits that exists that we have for example at our project in Mexico where yes you're not on the beach but you can get in a five minute you know golf cart ride and get yourself to a great beach club in the desert obviously there's no there's no ocean front though we're creating that ocean front by virtue of developing. The surf lagoon that is a now it just a second amenity to our golf community and so from our point of view those those opportunities and we look at those opportunities across frankly all of North America we think that there is a Caribbean model that is very very applicable and we're pursuing a project in the Caribbean now interestingly enough some of our buyers in Mexico or the ones who brought us into the Caribbean. We have some New York based clients in our in our project in Mexico who look at us and say look you know Mexico's a long way away from New York but we fly to the Caribbean for the weekend and you know it's it's that style so there's an eastern seaboard version where the airlift is such that people get down there it's a two hour flight they they'll spend two or three days and so we think that there's a project there and we're you know we're going to get a little bit more of a ride. And we're you know we're probably several months from announcing where that project for us would be but it's a very very similar real estate anchored club where you'll be able to own own real estate and why the not it's it's primary or secondary homes or it's fractional you know we're a little bit indifferent we think there's certain markets where fractional real estate is perhaps more valuable than then ownership real estate meaning you're treating it a little bit more like a like a hope like an extended hotel. The extended hotel stay then you are a place where you know you're keeping your underwear in the drawers at night when you leave and so so the Caribbean Southern California there's a Northern California project that that's there in we're looking at one with a partner again unbelievably important to have have local knowledge where entitlement can become something that you know surface is a little too easy to focus stick at if you're if you're the opposition. You know it is somewhat land intensive it is somewhat industrial it does use water it does use power you know it's not the most not the easiest thing to look at from an opposition and say well that's not a big deal because it's not as pretty as a golf course to most people as you as you kind of follow and go follow what's happening in orange county here you see the same. The opposition can get traction against the surf lagoon unfortunately they can get that opposition you know fairly easy times it appears is just a bit of a of the unknown you know if I go back and looked at the opposition of the slater facility in Coral Mountain it was like unfounded comments but because there wasn't enough experience nobody really knew you know what what to say was was fact versus fiction. And so now I think it's still you got to be careful about where you select what locations you want to go pursue and have that real strong local kind of capability to push through you know L.A. is a market that that is going to be developed into multiple projects at some point in time you know there's probably something in in Vegas that has viability. At some point you know we've looked at a handful of projects there you know there's there's a lot of there's a lot of built in you know issues in Las Vegas around hotel et cetera it's not not the world's most significant second home market by any stretch so the real estate values are somewhat hard to to describe. And then there's probably something in Arizona at some point although we haven't seen the exact right location yet you maybe you know I don't think we would pursue it but there's other projects going on in Texas Texas is a great club market you know we love the idea of of the club space and maybe somebody sorts out how to do something like that in Dallas as an example you know I think the Austin surf club is a surpursuper interesting thing to look at you know obviously there's a there's a lot of things that are going to be done. There's a there's a whole lot of complexity to Austin from a point of view of surf capacity versus how much residential I think that there's there's probably there's probably a some sort of math that somebody's doing around you know surf capacity and how how many homes that surf capacity supports in the greater the greater scheme of that model but you know I think from our point of view we'd be super happy to have you know five or six. Of these projects I think there's a certain scale that comes with owning and operating multiple projects I think you the unique part of our model is that we we will operate all the facilities that we develop. And I think that's a critical aspect is having that operational capacity really helps reduce the risk from an institutional Capital perspective where somebody putting money into this project knows who's going to operate that facility and not for nothing They're they're not easy to operate they're not complicated either but you know, there's only a handful of us who've actually operated them and There is a learning curve for sure and you can look around the industry and you can see the learning curve by every definition I think that the the real the real kind of learning is It costs you you know from an overhead perspective It's going to cost you the same to operate five of them as it is to operate one of them and so again going back to the idea that says You've got to be able to operate these things at a cost point that allows you to not have to have Significant in our case dues revenue in the form of private clubs The the idea of being able to to kind of put 5 6 7 up under one roof become super critical to Efficiency's and we learned this in the ski business. This is why they all got created and while terror exists and why most resorts are owned By somebody who's operating multiple resorts is because all that overhead You know kind of choose you up on an individual resort basis. See if you want to be really good You have to have some level of scale and so having an operator with scale is part of our model as well You know, we we've contemplated looking at operating resorts outside of our own ownership and development You know right now our kind of sole focus is really developing our own all of our own projects and you know, there's there's a time where There will be kind of broader consolidation. You know, I don't I don't know that they'll ever be a a veil of the surface But I do believe that that that there's going to be a series of projects that will struggle Just because you know the notion of some of the stuff we talked about but the notion of how do you generate the right levels of revenue to be able to Accomplish what you want It's just hard me, you know, you have to be able to kind of get that that ADR and occupancy to a level where you're super super consistent And there's only certain markets that will support that so the other way to do it is to operate them at a lower cost which is Probably driven by commonalities and synergies associated with with multi-point operators. Okay, thank you so much for that big umbrella I have you Everything going on with Maryweather and with the space I'd like to before we close out drill it down to your project in Cabo which is supposed to open later this year and Tell us about that take our listeners on site tell us how big it is the technology What the homes are like Yeah, so you know our partner which is I believe the largest landowner in southern Baja Kind of at one point time perhaps even own you know most of the land between San Jose and Cabo San Lucas Owns both ports on each side. So you know really really strong partner there Original investment in this located in this area of Mexico was the development of the of the Cabo real Golf Club for the you know, and I think it was the crown jewel and the families in the families overall investment portfolio It's why they put their first golf club investment and then they kind of you know moved on and did it developed a bunch of other components developed some of the beach Fran area kind of in front of our property and we came to them Maybe five or six years ago after kind of pounding the pavement in Mexico and we identified What we felt was the the best location for a surf lagoon in the entire corridor It was an area that you kind of had a little bit of flat amongst the hills which was a hard element to find if you look at Topography of southern Mexico. You've got these large hills that just come straight down into the ocean and you know too steep to kind of Way basin into but we'd found this area that had this bench plateau That had spectacular ocean views it overlooks El Dorado, which is probably probably the most successful Second home development in Los Cabos. You have views out to Chilano Bay, which is probably the second most successful project And so we had this unbelievable natural terrain and we had this opportunity to bench in You know what in our case ended up becoming a 48 chamber endless surf Surf lagoon. I think it's going to be the first 48 chamber model that they've developed I think we're probably I'm expecting will be will beat the Brazilians to To surfing this this year, although I think that's probably a foot race that We're both going to be close and they've been great partners to talk to and help I think we're learning from each other along the way The right now the way basin It it looks like a way basin all the chambers are in the mechanical rooms poured the field All the channels poured the field is being poured as we speak Water treatment facility looks like a water treatment facility So we're expecting the the all of our concrete infrastructure To be kind of in place by May The endless surf team will come down in in May and start installing by suspect will have installation done to the three months thereafter And we'll start putting water in the basin with the expectation of Of running our wave testing through the kind of late summer with an anticipation of being open to members In the fall, you know, we've we've sold A little over a hundred million dollars in real estate so far We have a hundred and seventy seven lots in our first phase of we call that the surf phase of our development There'll be some secondary phase of golf club development. We have a and existing 18 whole championship golf course that we're going to privatize As of November of this year We're actually going through a massive renovation of that golf club Working with our architects right now. We'll start that renovation In probably March of 2027 so a full new golf course by the time we're done As I mentioned, there's an unbelievable beach club that we can access Through the golf course itself. So that comes underneath the freeway It is our early buyers are exactly what you want in a surf facility It's a very very interesting set of Like-minded heavy sub in California, but they come from all over North America As well as parts of Mexico all have that Similar theme of you know the excitement over The idea of being able to surf when they want with their family The fact that we have no hotel means that you know the objective is this very very Loose guest policy We want you to bring your friends with you. You know our our experience from Waco Was was interesting because nobody well very if you people come and surf by themselves Most people come in a group and we think that the way we've been been kind of positioning our real estate is You know, you're gonna own a in you know all of our members own residential real estate within our development So you can't there's no outside membership everybody's gonna be a landowner and ultimately a homeowner And you know, we've designed three four five bedroom homes and the concept is That you're going to be down with your crew and you know, you're gonna be able to go surf Whether or not your crew is your family and your wife and kids are gonna are gonna learn how to be ripper surfers Or it's you and your buddies, you know from that you surf with Wherever you end up, you know living and from our point of view that that super super fun everybody is kind of an extended family Of the club that seems to be resonating extremely well with our early buyers and we've been super happy to see that It's a it's not a it's a club where We think that there is going to be significant like-minded community And if you if you know the Baja it's you know right now You know, it's a fickle surf market. It's wildly wildly surf centric market But the waves are very fickle and so this notion of bringing reliable surf to A place that already feels like destination surf, but Doesn't have the kind of wave consistency to support that I think that's been one of our big benefits is There's people down in Baja already you would love to surf more and we've had a lot of people come over from other projects And purchase real estate from us because they want access to that server really is a great Example where if you build it, you know, they will come and I think we've been very very fortunate The property itself is is just it's unbelievable and then what we've done Because Maryweather, you know, it's it's not all about The we're not we're not the kind of the big Let's just go golf and drink tequila. So there's lots of hiking Already started all of our multimodal trade-als. We'll build a full mountain bike park You know, we we really feel that it's a it's an opportunity to get outside the gates of the traditional Approach to to southern Baja where yeah, we want you to be able to go surf on the escape We want to take motorcycle expeditions out into the hills. We we own this part of the overall development It's 3,000 acres of property. So we have extensive Look opportunities to recreate on our land outside of the traditional gates and so I think you'll see a lot of that very, very unique, active outdoor lifestyle focused families. And I think there'll be just as comfortable getting in a van and going up the escape to pitch a 10 on the beach and surf in the morning as they're going to be able to come and feel like, you know, there within the gates of the development and have the benefits of the luxury second home development in the Los Cabos region. It's very, very exciting. It's a, you know, it's very unique. I, I, I actually believe we might be having looked all over the Baja for locations where you have not only flat land but power infrastructure, water infrastructure, all the things you need. I'm not positive that there'll be another project like it in Baja, like, you know, people to market, people talk about, but having lived there and spent a lot of time looking feels like we have the never one location and it feels like maybe we have, well, at a minimum, we have a significant first mover advantage just given the fact that we have such unbelievable traction and such a great partner to be able to pull it off. - Yeah, and it's, it's really exciting with the 48 chamber endless surf system there. And I guess once we look at Shane Magnussen's Instagram feed and there's a cactus in the background, we'll know he's there testing it. - Yeah, no, I mean, to be honest, I've been impressed with the stuff coming out of Saudi Arabia, the 36 chamber that they have done. They did a very nice job at making that wave significantly more interesting from the early clips from UNI, UNI were at a chance to see it a Munich a long time ago. And just to see how much improvement Shane's been able to add to, you know, to what they've done, the stuff coming out of the most recent Red Sea videos were exceptional. You know, I was down in Brazil and saw some of the new AWS stuff, which was spectacular. You know, I'm a big believer that all those technologies are great and that, you know, there's benefits to everybody and there's commercial deals to be done with certain people in certain places. But all that tech is every time, every new wave that gets developed, the waves get better. And that's the important part of this is that, you know, these don't work without great waves. Like there's no such thing, you can go ask a Doug Kurs or the original Scotland version. It's the waves and the ability for the waves to get better, which is so critical to the success of the industry. And so I'm super excited to see it happening within an RK Sandless surf. And I am wildly excited to see what happens when they get 48 chambers to play with because the word coming out of the word coming out of the Red Sea from their development guys is, you know, they're starting to kind of, it's kind of IE8 on what other things they could do at 48 chambers. And it sounds pretty wild. And by the way, the foil video that got posted the other day, I could next level conversation about what's next, right? I bet you got to do a really, really good foiler to pull it off, but the concept that you legitimately have endless surfing on a foil in a way pool was mind blowing to me. So, yeah, just another example of, here's what's next. - Yeah, well, David, thank you so much for taking time out and giving us the background in history on Maryweather, on your projects, your insight into the surf park industry. And thank you, yeah, it's learned a lot. - Yeah, you bet, Brian, always good to catch up and happy to put it. - Okay, right on.