E98 - Hamid Moghadam | 3% of the World’s Economy Flows Through His Company

As a public company CEO, I had done 112 earnings calls. And that's a record in the S&P 100. Is it? Mm-hmm. Buffett is the guy that's been longer CEO than me in the S&P 100. The thing that really got us and has really defined the company to this day is this concept of enduring excellence. What is a personal habit that you believe had the greatest impact in your success professionally? Being super responsive to people. I respond to people right away. And that really surprises people that a CEO is so accessible. It feels like I'm always there with them. Today's guest is one of the most influential business leaders shaping the global economy. Amid Mogadam, Amid is the co-founder and now executive chairman of Prologist, a long time CEO, of course. The world's largest logistics real estate company. For over four decades, he served as the CEO, the chief executive officer, leading the company through extraordinary growth that to put it lightly. Multiple market cycles and the transformation of global supply chain. Before CEO of Prologist was the founder and CEO of AMB, which, and I'll touch on later through merger, became what is known as Prologist. Prologist owns and operates and develops the industrial infrastructure that powers modern commerce, the warehouse's distribution centers, and logistics hubs behind nearly everything we buy, ship, and consume. Today, the company spans nearly 1.3 billion square feet across 20 countries with a footprint. So significant. This was wild. I had to look into this. With my research, seems like, is this real? Is the portfolio, the footprint, it roughly 3% of global GDP flows through Prologist, facilities, each year. Is that that's a real thing? Absolutely. That's incredible. I'm at the scale, right? And Prologist, what for the longest time, the largest market cap for us real estate nerds, the market cap read for decades and currently currently sits at number two with a market cap roughly around, depending on the day, 120 billion dollars. So under Hamiz leadership, Prologists have become a critical player at the intersections of logistics, technology, and energy supporting the rapid growth of AI data centers. And next generation infrastructure keeping the company ahead of what's next in a rapidly evolving global economy. But Hamiz story didn't begin in boardrooms or on Wall Street. He was born in Iran, immigrated to the United States as a teenager and built his life and career from the ground up in a new country, developing the discipline and long term mindset that would later define his leadership. One of the things, you know, we'll touch on, but really with the transition from CEO to executive chairman, how, how, you know, your day to day has, has shifted. But right now, focusing on strategy, mentorship, and long term vision, offering a rare opportunity, reflect on leadership, patience, and really building something that truly lasts. Before we dive in, don't forget to like, share, and subscribe to the Matthews mentality podcast. Amid welcome. We're sitting in your beautiful office here in Las Vegas, Nevada. How did you end up in Vegas? Well, it's close to California. But it's not California. And I've had it was a good idea to create some separation, physical separation, and not be going to the same office that I was going to for many, many years. And Dan Letter, who's our new CEO, is the real CEO and I'm no longer the CEO. So it's better to communicate that by not being there all the time. Sure. And the headquarters are in San Francisco, right? They continue to be in San Francisco. So I wrote down one of my first questions. It says January 27 has been about four weeks since you became executive chairman. So what is a day in the light? I always ask quite like, what does a day in the life look like? But I'm attack on something. What does a day in the life look like today? And how has that changed from four weeks ago? Well, I'm spending about a day or two a week on prologists. And really I'm there to do what Dan wants me to do. I take my cues from him. And, and, you know, I think that level of engagement will fluctuate up and down, you know, depending on the need. There may be weeks that go on and that I don't do anything on prologists. And there may be weeks that I'm 100% devoted to prologists. But we're feeling our way. It's too early to tell where it's going to settle down. But it's working out pretty well so far. So let's start by give us an overview of the prologist portfolio. And if you could like explain to not we have a very large non real estate professional demographic on this show. And so I think most non real estate professionals, they could tell you even not being in real estate. What is an office building do? People work there. What a part apartments people live there, retail, people shop there. But I think a lot of non real estate professionals, they would struggle to tell you what happens in industrial buildings like they make things maybe. Give us an overview of the portfolio. And if you could, you know, to the layman explain, you know, on average, what what happens inside these industrial buildings prologists owns? Yeah, good question. The vast majority of the buildings are used for distribution. So when things are made in one place and consumed in another place, they need to make obviously their way through the supply chain. And because perfection is not possible. I mean, if you think about it, if you could perfectly predict demand and supply, you wouldn't need any warehouse space because basically goods would go from being manufactured straight to where they being consumed. But of course, that can happen because you got these practical things like ships and boats and planes and all kinds of things in between. So you have inventory building up. You have the function of actually redistributing happening because imagine you have a you have a factory and the factory is producing these cups. And these cups are all coming into one place, but they're distributed to a bunch of different stores together with this bottle and that computer and all that. So they come in on containers that are full of these cups, but then they need to get split up and mixed up with a bunch of other stuff that go to retail or ecom or whatever. And that function happens in a warehouse and it's really a redistribution function that happens in the warehouse. That's probably the biggest use and that's changed a bit because of ecommerce and we can get into that. But there's some manufacturing that takes place in some of these buildings. For example, we have a bunch of buildings in the border cities in Mexico, just south of the US border. And those are those look like any other distribution building, but the vast majority of the activity taking place in those buildings is manufacturing. So it's a very flexible shell in which you can do a number of things all the way from manufacturing to distribution, but the vast majority is actually distribution. What did they call those macchiaduras? I'm trying to think they used to. That was before an a naphtha. Oh, see, I remember that from a business class at USC. I actually did learn something. You are dating yourself. Yeah. I was going to say I don't know if they're called that anymore. I guess they're not. I want to go back in time. Let's let's talk about how you got here. It starts with your born in Tehran. You can date yourself if you want what year, but you immigrated to the US when you were 16. So I was born in Tehran in 1956. I'm 69 years old. Was that three years after the coup? Yeah, but the coup wasn't really that big a deal as you hear about these days. I wasn't around to experience it directly, but actually the Shah and that regime had been in place for a number of years. It was a little blip during the coup and then he came back. It was an important historic event. It came in the issue 26 years later. You did. Now it's becoming an issue again. I was going to say maybe I'll talk offline about this. Hopefully one day we could have a nice dinner with Johan. That's how we met. Johan was like, if you have shopping centers sell it to him, bridge 33. But I was going to say, hey, one day we could have dinner in Tehran just not today. Well, that would be great. What age did you come to America? So I actually went to Europe to finish high school at the age of 13 and was boarding school. That was actually a pretty typical pattern. There were a lot of Iranian students in the West, Europe and the US. In fact, I think the numbers were there were 55,000 Iranian students in the US in 1978. It was the largest foreign student population here. By the way, there were about 60,000 Americans living in Iran at that time. The third TV station was AFRTS American Forces Radio TV station. That's right. So it was a very Western economy. It was growing at teens a year. It was it was on steroids. What was it? What was it like to grow up in Iran back then? I would say very little difference from growing up here. It was a very connected Western economy. It educated as my understanding. Educated at the very top tier society. Actually, the problem was that if you lived in northern Tehran, it was just like living anywhere in the US probably. Probably West L.A. was most similar to it, which is why a lot of people from northern Tehran ended up in L.A. But there were parts of the country that were not quite as educated. They were behind. That disparity actually drove a lot of the issues that came about. But the company was that country was industrializing very quickly. And it was not at all unusual for young people from Iran to go to college in the US or UK and then go back and get them involved in the growth of the economy, which was tremendous. I mean, the biggest opportunities in the world were there. Just think about a smaller China, but a higher growth rate than China in those days. Really? Yeah. Even in the head of China. So I started real estate in West L.A. and a very, very large Persian community, Iranian community. A lot of Persian Jewish community. But then as, you know, as my business is expanded beyond, you know, Southern California, there's just so many. And I don't know if it's something about real estate. I was actually going to ask you this question. What is about real estate that seems to draw people who were born in Iran? Because a mere Karengi see over the real deal, you know, he was born in Iran. Obviously, Jahan and so many that I met, they come here and they're so successful. And it's such, it's so fascinating. I know I'm generalizing, but they just, you know, whatever it is about that place or that culture, when you bring that to the states and really hear opportunity exists, they just do so well. Well, it's a very entrepreneurial culture. And if you look at it, there are two places in the Middle East where a lot of entrepreneurs come out of. One is Iran and the other is Lebanon. So there are a lot of Lebanese entrepreneurs that you see around the world. And you know, you see them in Latin America, you see them in Asia, you see them all over the world. They're traders. And if you look at the geography, Iran is like a bridge between Asia and Europe. So there's been always a population of traders and it's kind of in the blood. And real estate is the ultimate negotiating. The ultimate tangible asset. Exactly. So these days, I think you have a lot of people in real estate, but increasingly, you have a lot of people in technology as well. And I think, you know, it's interesting because other than Tehran, I think the other place from a historical perspective is like, man, you should have seen it in the 50s and 60s. It was Beirut, you know, in Lebanon and it was like a, it was, you know, like a Western country and it was, you know, very prosperous. And then I think if I'm not mistaken, it was maybe Hezbollah came in and that changed late 70s. It's when he changed. Yeah. Beirut was called the Paris of the Middle East. Yeah, that's what it was. And then obviously Tehran. So you, you, you, you first did boarding school in Europe. And then is that how are you ended up getting into one of the notes I had was you, you got admitted to MIT at 16. Actually, I started in MIT when I was 16. Yeah. And for a short time, my birthday is in August. So I can go to 16, about to turn 17. Yeah. And I was there for, for about four and a half years, I stayed and got a master's and was just about to get on a plane and go back to Iran and get involved in what was the family business. And I can explain more about that. And I remember vividly a conversation with my mom about about my return. And that was right around the time that the first shots were being fired in the streets. It was like 78 79. It was right at the beginning of 78, it was just the beginning of what became their revolution. And she basically said, look, figure out something to do with yourself for two years until we figure out if this place is going to settle down or what's going to happen. So on, based on that alone, I applied to business school and a couple of business schools and decided to go to Stanford. And really it was a temporary decision. I mean, it was just a way of spending two years waiting for things to change. And I was like, well, I'm not going to be in a place to spend it. Not a place to stand, but of course, you know, as soon as I got there, the place blew up and became a very different trajectory. Yeah. What was the family business? So my dad started in the construction. Oh, I thought you were going to say textiles. No, actually, every person guy in LA has a rug store. And I figured, you know, it might be a film in rugs, but it's interesting because there's another family with our last name that were the biggest textiles produced in the country and everybody kind of confused the two families. No, but my dad started in construction and development and then had a small business in addition to that in offshore drilling for oil and platforms. And then ultimately started a bank called the industrial development bank of Iran, which ended up being the largest business bank before the revolution. And part of why I was asking that I was interested coming into this conversation to kind of see what was the tie in that got you into commercial real estate. So that's an easy one. I mean, I used to go around with my dad to various construction sites on the weekends because that's when the traffic allowed you to get around and see a couple of things, you know, nobody was driving around. Tehran traffic was horrible in the 70s. Yeah. It continues to be that way. So, so I love spending time with my dad and I love the smell and concrete and construction sites. And I never considered a career other than real estate and ultimately ended up doing what I wanted to do. What if anything went through you kind of psychologically, you know, you have this family business back in Iran and again, before the revolution, you know, prosperous country. I don't know if you had given thought like, oh, I'm going to take this over and this is my destiny. And then you in some way get a call from your mom saying, you know, that may not be available for you. I don't know if it was as if it was as draconian saying you had to start over in a foreign country. But was there was there any kind of mourning process for saying gosh, like I thought I had this whole setup. And then now I have to start from scratch in America. Absolutely. I mean, I'll tell you another part of the story, which is important. My dad actually passed away in 1973. So six years before the revolution. So and right before actually he passed away the summer between my high school graduation and starting at MIT. So there was tremendous pressure actually to get back quickly. That's why I was such a dare. I was the only boy. Okay. And actually had two older sisters who were somewhat involved in the business, but not as much as I would have been in those days because of the way the place was structured. So so that was tremendous pressure to go back. I mean, and I felt a responsibility to go back and get involved. And you know, when the revolution happened, you know, your whole mental picture changes, you I was a wealthy family was an educated family. And here I was, you know, 6,000 miles away with no resources. I mean, they nationalized all those businesses and took them away. So literally I end up here. I think with $8,000 in a bank account. And and a lot of tuition to play pay because I was just in the first year of business school. So it was a very big transformation. Now, you know, nobody's going to cry for me because already had my education and it was by and large paid for and that's better position. Then 90% of the people, but when your expectations are that you're going to go back and run this big business and be a big deal and all that, it takes a little bit of an adjustment. Yeah. You know, I always say the hardest thing someone's ever gone through is the hardest thing they've ever gone through. And to them, you know, they don't have the perspective of something, you know, from an outsider's perspective, you say, Oh, that's not that much. This is much worse if you have to go through it. But I'm sure that that had to take a psychological toll. Yeah. I was one of the drivers of unhappiness is mismanagement of expectations. You got it. And and it was particularly difficult in addition to that. So I would say early in my life, pretty early in my life in my teens, went through two pretty traumatic experiences. One my father passing, which was important, very important. And then the Iranian revolution. But there was a third thing that happened right after that, which is I was class of 1980 from business school. And you're too young to remember this. But in 1980, interest rates, the prime rate was 22%. I was going to say 22, 23. Yeah. Inflation was 14%. The 10 year bond was 14 and a half percent. And the real estate business was absolutely the tank. And I wanted to be in the real estate business. And my first interview was in November of 1979. Guess what happened in November of 1979. They grabbed the American hostages in November. And I have a name that doesn't sound exactly like, you know, Jones or Smoker, anything like that. So I was stuck in a situation where I was interviewing for all these jobs and getting rejection after rejection. And you had quite the resume. So I have a feeling it wasn't really me, but it was just the combination of a bad economy. And rightfully, people were just really upset about what was going on in Iran. And really, most people didn't know about the differences between those of us who were here and those of us who were, you know, promoting their revolution and all that kind of stuff. So it was a pretty depressing period. But somebody gave you a shot, right? What was your first job? So there was a gentleman by name John McMahon. He was the adjunct professor at Stanford Business School who taught the only real estate school, sorry, real estate class that was offered there. And he obviously knew me from class and knew I was a terrorist. So he actually offered me a job and I went to work at what was then called John McMahon Associates. And that's where I met my eventual partner Doug Abbey. And I worked there for a couple of years from 1981 to 1983. And we started what became AMB in the summer of 1983. So that was pretty quick. A couple of years. experience and did you always know you wanted to be what I'll call an entrepreneur a founder that you wanted to own your own business? Yes, but I had no idea. I know clue about what that meant. None of us did. No, no, ignorance is bliss, right? Exactly. So actually, when I was interviewing John, John for this job, I told him, John, I will work my tail off for you. But I'm an entrepreneur and at the end of the day, this is going to be a stepping stone to an entrepreneurial career. I didn't know how quickly it would happen or how it would happen. And I remember when we left, he actually reminded me of that conversation and we had a really great departure or separation and we remained friends. He just recently passed away and I still spent time with his son and it was a very important step in my career with that. So John McMahon, none of this would have happened. But you started your business was called A&B right away? No, it was actually we had a better name. It was called Abbey Mogadam and company because it was only Abbey and Mogadam. The B. Bob Burke, who's the third partner, was the managing partner of a large law firm in San Francisco, actually San Francisco, headquartered, but all over the country and the world called Morrison and Forster. And they were about to occupy a major downtown office building and to get an equity interest in it. So when we left and started our company, we didn't have any money. So we were basically providing consulting services to whoever would hire us. So Bob's firm hired us to advise them on how to structure an equity interest in this new office building that was being built in the San Francisco and how to monetize their old lease, which was way below market in their existing building. They're like a sub lease. Well, actually to assign the entire leasehold to the developer of the new building. Okay. So the developer, the new building ended up getting some pre leasing, major pre leasing in their new building. But took over the obligation of the old building and that allowed Morrison Forster to make the move and pay an effect for the condo part of the building, which was their own little block of office space. Anyway, pretty complicated, interesting transaction. But that's how Bob and I got to know each other because he was the client. I was person working 24/7 with him for a period of six or nine months. And Bob at the time wasn't in his early 40s. I was in my mid 20s and Doug Abbey was in his early 30s. So he had been a real estate lawyer before and he wasn't real estate lawyer. He just became managing partner at law firm. And he was ready to do something different than law. And we were lucky to catch him at the right spot. We liked us and we enjoyed working together and we sort of had a bunch of casual conversations. And he decided that we would join these two crazy people that had no really business to speak of. I mean, we had started a company with a $50,000 line of credit from Crocker Bank. Never used it, by the way, because we were a casual positive from day one. Very different than startups these days. We never took external capital in our business and sort of started this consulting business with a couple of assignments that grew into a bigger and bigger business and eventually morphed into a work out business. So people were then hiring us to help them work out portfolios that were distressed. And we built our reputation really in that business between 1983 and all of 1988, 89. And that's when we decided to sponsor our first fund on the ownership side on the ownership side. So that was that was the first major transformation, one of many, one of five or six, which was going from an advisor, one investment manager, and a fund sponsor. So that happened in 1988, 89. And so, and that was right coming out of the SNL or maybe right in the middle of the SNL crisis, right? It was actually right before the SNL crisis. That 89 or 87. Maybe they'd change the tax laws in 87 and tax laws changed in 86. What they did is they disallowed passive losses being deducted. Real estate buying large was financed. The equity came from tax syndications. I mean, large companies consolidated capital. JMB, actually JMB originally was a syndicator, BALCOR. I mean, companies you never hear about anymore, but a lot of great talent. It came out of those companies. But real estate was tax financed and in 86 that went away. And then they SNLs, which were the major source of debt financing, went away in 88, 89. So real estate really fell on hard times. We had been doing mostly office building workouts and all that during that period between 83 and 88, 89, mostly in the sun belt. Because Texas won crazy because of the oil boom. The aftermath of actually the Iranian revolution, the price of oil went from off 13 to like 70. And Texas was boom tech. And everybody over built office buildings in Texas. That's what Texas does. Yeah. So we ended up actually building our reputation on the basis of that. It's ironic by working out some of these things. And we got that reputation based on that. And we decided to do a fund but stay away from office building. So our first fund was called the AMB Western Properties Fund. It was focused on seven Western states. And it was focused on industrial and neighborhood shopping centers, which is by the way, little fact that most people don't know about. And it was two thirds industrial, one third neighborhood retail. So we set out to raise $100 million. And the first year we raised 10. We took a seat, you're to raise the first family. It was just like a disaster. Second year we kind of sales is tough. I tell people all the time. Sales is tough. It is really tough. And particularly if you're trying to do a new fund and no job record, all that. So and the sales cycles along, but you go to the expansion funds. Yeah. They want to make sure, you know, they talk to a bunch of people who come around once. They talk to fewer people that come around twice. And by the time you come around the third time, maybe you're real and they start paying attention to you. Anyway, we raised 10 million. 10 million. Second year we raised 65. We declared victory at 75. We closed down the fund and started investing 50% leverage. So it was about $150 million, which in today's dollars is probably half a billion. I was gonna say it's a pretty good size for a first one. Yeah, three foreign million. It wasn't bad. It was respectful. So we started investing these things and low and behold, the place blew up because of the SNL crisis and all of a sudden, here's this little company nobody's ever heard of in San Francisco, putting up 10% returns with one or two percent growth when everything is like declining 20% in terms of values. Why do you think your asset cement two thirds industrial and three retail? Why do you think yours were able to perform where you just buying better than everyone? Because of your execution of like a value add strategy. People were enamored with trophy office buildings and regional shopping centers. Regional shopping centers were five and a half six cap rates in this. Okay, now mind you, this is an interest rate environment. It moderated by them. But it was still seven, eight, nine, nine. Nine and 10. Nine and 10. Okay. You were we were buying industrial at about nine and a half 10 cap rates with some some growth built into it. So and so we were generating low to mid teen returns, nothing spectacular, but everybody else was losing their shirts. Yeah, when compared to the rest of the market, you know, it's and it makes you guys look really good. Exactly. It made us look a lot smarter than we were. I mean, it was just smart enough. Why industrial? Because it was nobody else was really focused on the NASA class and it was an important asset class. And it was the unit investment sizes were small enough that you could actually buy a few of them in a hundred and fifty million dollar fund. Yeah. Obviously, you couldn't go by a hundred million dollar office building in a hundred and fifty million dollar. But it'll fun. So anyway, these things performed really well. And in 91, 92 after we got done investing this, we went out to raise 200 million for our second fund, which was called the AMB current current income fund. It was actually the first private Greek that was structured. It was a fund structure. It does a private read. And I think we raised 400. And I think it was 600 or seven months. So the market was ready for it. And our track record was ready for that. So we came out of that cycle with a good work. It's hair on fire. And we started buying more and more industrial buildings in LA. And I mean, we were looking around. We were buying industrial in LA at 70 bucks a foot and really struggling. We were really paying 70 bucks a foot for this stuff. And are we ever going to make any money out of this and you know the rest of the story. So anyway, so we continued that strategy. And in the meantime, as we were investing this fund, the second fund, we were winning a bunch of separate account business. So we won some CalPERS business, some CalSTRS business, some Southern company pension fund, separate account businesses, Ameritech, lots of pension funds formed separate accounts with us on parallel to the funds. And so we over the years. account, you mean from an advisory like consulting or a separate investment vehicle? I mean, they gave us discretionary funds to invest, but it was a single investor fund as opposed to a multi investor fund. So between those single investor funds and our commingled funds and then we form more commingled funds, I'll take you to sort of the mid 90s, 96, 97, we built up a business that had almost $5 billion of assets on their management. We were on fire, we were winning pretty much every mandate that we went after. And just to help you place this in your mind, the big competitors in those days were reef, your remember reef, which was later acquired by Doach of Active. RREF was called Rosenberg Real Estate Equity Fund. And TCW Trust Company on the way. These are companies that don't exist certainly in their network. They were big. They were big. And the height men and firms like that. So those were the big players. We were coming along and we were becoming a pretty significant player. And we looked around us and realized that there was this new vehicle format coming about all their reach. Now, reach had been in existence since the 60s, but they were basically backwater departments of commercial banks. It was just another way of investing equity in real estate. And banks were the sponsors because they it was a way of an effect capitalizing their developers and providing equity in addition to that. But it was a backwater industry. I don't know what the total AUM of the industry was, but it was in the hundreds of millions maybe in a good day. But but breeze were beginning to get traction because that was the capital structure that was helping companies come out of the SNL crisis and recapitized their portfolios. And the expression was go go broke or go public. So a lot of real estate companies like Simon, I think when public in 1993 in the beginning of this wave, we were a little bit later than that. We were in the 96 we started planning for this. But we said, well, why don't we do this a different way than other people? Why don't we go to our LPs and we'll value their portfolio and we'll value our GP. And we had a couple of people that wanted to buy the GP. So it was pretty clear. In those financial services companies were buying GPs of real estate fund management company. So it was pretty easy to establish value. So we valued our business through these offers. Then we had values of what the funds were and what the what the separate accounts single investor funds were worth. Then we took all of these and put them together and as one giant private company for about an nanosecond, literally an nanosecond. And that company went public in November of 97. 97. So and nobody had done a transaction like that before. Now after we did it, actually equity office was formed that way, which became the largest office company. This is couple of weeks before bus and properties went public. So and Cabot, you may remember Cabot became then and see a BOT Cabot. Yes. Yeah. So so a bunch of companies followed the playbook and it's interesting. Actually, a lot of private equity firms now essentially use the same point book. So a lot of founders, you know, they start a company and there's this there's this vision. There's a stream that hey, one day I'll have this liquidity event, public private. First, certainly, you know, from what I could tell your first big one, going public, you said November 97. What was that feeling like? Was it was it as satisfying or fulfilling as maybe it built in your head? Okay. Was it tough slog? I mean, by that time we'd already been in business 14 years. We had bootstrapped this thing up from a two man operation, which, you know, for the audience generally and I bootstrapped my own company. And so if you're not going to raise outside Cabot, it's like, where's the capital for growth? It's from cash flow. And so you're always reinvesting back in the business. And so and one little thing going wrong can kill you because the margin for error is not there at all. So yeah, it was it was somewhat of a relief because it changed the equation from the first equation is can we survive? By the time we got into the fund management business, we kind of knew we would survive. But then the question was, can we become relevant? And I never felt we could be relevant if we were just advising other people, other people's money, having our own balance sheet. Really was a true test of are we, do we know what we're doing and can we make good decisions? And that excited me. It was not a liquidity event. I never took a dime off the table as a result of that. It was just a way of building permanent capital into your business. And at that time, I would say I should do the math. Bob is 14 years old and then I am. So he was in his mid 50s. He wanted to slow down a bit. Doug was a couple of years after that. He was in his late 40s early 50s by the time. So those guys slowly decided to retire. But it was a great mechanism because it separated the idea of owning the company from working there. Yeah. So they could sell their share. And then there's probably some sort of for founders in Kemen, there's probably some sort of what do you call it? Six month lockups. Yeah, lockups. But six months, yeah, I've heard of longer. It used to be. That was the norm. But these guys, since they thought it was an interactive proposition to have that liquidity, but they actually didn't sell their shares. I mean, I don't know how much of a day on now, but they may have sold some to give to charity and all that. But it's not like they hit the exits. They just wanted to know that they had a valuable currency. Sure. And that gave security and knowing that you're going to be in business and you have something of value that is liquid. But so those guys slowly stepped aside. We built a new management team that came in post IPO by that time, the partnership had expanded to 10 people. The three of us owned the majority of the firm, but we had seven other partners that had worked with us that came along. We had financed our purchase of the shares. So we were really on management structure, three point O when we went public because the one point O was the founders, the two point O was the expanded partnership. Three point O was really the first public company management team that we have. And we'll get to four point O or the merger of equals as it was called, but that's six point O. That's six point O. Geez. All right. I want to go back and it's always a fun topic for us to discuss on the podcast is work life balance, right? The 14 years of you being a founder and scaling, talk to me about work life balance. I don't know what that means, honestly. I mean, I remember, I'm not proud of this, by the way. I am not proud of this, but on our honeymoon, my wife and I were at the Montagueau. And in those days, there were no cell phones or email or anything. I was on the phone in the room the entire time. It's, I'm not proud of this at all. So, but that's what you have to do because we were working on a deal that that kind of was life and death. I got married in '86. This is still the early days. Everything matters. And don't know. There wasn't work life balance for 10 years. I don't. I look at the first 10 years were pretty hard. Yeah. Really hard. I, I, I don't know if I'm one of the few who can understand, but I understand. Like I was telling someone last night and they were talking about scaling Matthews and it's like, well, you know, the first 10 years, this is kind of what it was like. And they're like, well, really? And, you know, and so that gets to my next question is, why? What was your driver? Like, what were you trying to solve for? What were you trying to accomplish? Like, what was motivating you at the time? Well, I can only speak for myself. Yeah. I had a chip on my shoulder because from what? Because I thought I'd done everything right and I had a right to a successful going over and taking over the family business and being a big deal and all that. And that right was taken away from me. Sure. I had no right. I was in a very fortunate situation. I look, I get all that, but I needed to prove to myself and maybe others, if I'm candid with it, that those decisions of all those people who decided not to hire me, I had hired me in 1980 coming out of business school. They were wrong because I could do this and I could do this well. So I could give you a much, you know, more thoughtful explanation of the driver, but I really did have a chip on my shoulder. And I just wanted to prove to myself and others that I could do this. No, it's a, it is one of, if not the greatest outside of financial anxiety and financial anxiety, you know, I talk about this with some of our young professionals. We actually relative to your lifestyle, you put that to bed really quick and you have to have a deeper seeded motivation to push forward and proving doubters, whether real or imagined is one of universally one of the biggest motivates you see it. I talk about this all the time. You see it. I remember Patrick Mahomes and the chiefs. They won the Super Bowl and you know, they interview him after the game and it's like, you know, we just wanted to prove, you know, they said we couldn't do it. We wanted to prove the doubters wrong. And I was sitting there watching. You guys were the number like you were the overwhelming favorite the whole year. Nobody said you couldn't. Maybe one person, but these, these, these, really, you know, not just athletes, but these great competitors, whether real or imagine they create this narrative in their head that like nobody thinks I can do it. Sometimes, and there's people at the company, I won't name names because then they'll know that I'm psychological warfare. Like, I know that that more than anything. So I'll say, okay, here's, here's the vision. Here's your role. Here's what I need you to execute and look, I love you. I don't think you're going to be able to get the stun. It's just so hard. And they're like, okay, okay, you know, and it's, it's a great motivator. I certainly have similar feelings towards proving doubters wrong, but it sounds like that was, that was a big driver for you. That was a big driver. And I'll tell you one other thing that became even a bigger driver. Sure. I would say that, that motivation got us from sort of point zero to maybe the IPO, but the thing that really got us after that and has really defined the company to this day, is this concept of enduring excellence. And I know, sounds fancy and all that, but we literally, I found the document literally from 1998 that I was making a presentation at year and to the employees in the company. And we were talking about the mission of this company is to build a real estate company of enduring excellence. Now where that concept come from, we looked at the top 10 companies in real estate for each decade. And the names were completely different. So I started becoming a student of this. I started reading books about second or from the 50s and 60s and people, Olympian York and people who had built really significant real estate companies and, and realized that real estate went through a very predictable cycle. It started entrepreneurial. You had some success. People really leveraged up. Then you hit a bad cycle and then you went out of business. So you had lots of great companies, but over short cycles. Very few would survive beyond one cycle or maybe two. Exactly. So we thought wouldn't it be cool if we were a company that actually broke that chain. So we always had this view. And to me, maybe there was a personal angle to this for me. Bob and Doug may have been different for them. But because the rug was kind of pulled out from me when I was a kid and Iran and all that thing, there was nothing permanent. Everything that I thought was permanent had gone away. This was the opportunity of building something lasting and permanent. And that in a sense, couldn't just disappear overnight or be taken away from you. Is that so? Now, of course, we all know that the world doesn't work the way he planted and things can be, can change tomorrow. So that's a little bit of like building a sand castle. What is it? Men playing God's laugh. Right. Exactly. Over, you know, you've been in leadership 42 years, like building something, you know, building and during excellence. That was, you know, 1998. So you have this document. And it looks like you've done that credit to you and your teammates here. How did your leadership style evolve, you know, as the company kind of grew in scale and complexity and market cycles came and went like, how did you as a as a captain develop? Well, I would say the first, that my evolution as a leader had three phases. One was phrase one is paranoia. We just had to say in business, right? So we were running around like a chicken with our head cut off. And people think that that's the toughest part of the business. In fact, you mentioned Jahan. I told him when he was in this stage, sort of in 2014, 15, I said, this is not the worst. The worst is yet to come. Oh, okay. So when when you're small, you have two, three people, you have four or five people, you're all in there together. You're all working your tail off. You're all trying to survive. It's pretty straightforward. When you get to be like a hundred, 150 people, then you go, oh my God, this is company has grown beyond my ability to know everything. But I still can't really afford a management infrastructure to put into place. So I'm kind of supposed to be in charge of everything, but I don't know everything anymore. So that combination of being scared and being out of control is worse than just being scared. So that's phase two, scared and not in control. Right. Exactly. Like whatever you built here, I mean, we would have Christmas parties or we would have Halloween where everybody would bring their kids to the office. I'm going like, all these people are kind of depending on us. Yeah. And not just that, but when you have five, I'm just speaking from my own experience and kind of piggyback on what you said, when you have five, 10, 15 people or for me, it was you're all in one office, even though we had 50, 60. You know, there are people who have roles and responsibilities, but in theory, you can do every like, oh, this needs to get done. Like, I'll have this person do it. But if not, I can just go in over the top. Or actually, even if you didn't do it, you would know how to do it. You understand everything. Yeah. When the company gets bigger, you don't understand everything. You don't know. So, so yeah, I would, you know, I always say I was the CTO. I was the COO. I, I, I negotiated it first leaves. I, I negotiated our insurance policy and you just even whether I did a good job, I knew it was for me. I found it 2015. So this was like 2020, 2021. We had 350 people, but you're only five years in. And I talk about this all the time. I didn't know it was called the scared and not in control phase. That probably would have helped me process. But it was around that time. It's like, okay, I need to really invest in developing competent leadership around the country. And that was a big phase. And so I'm, I'm hearing it for the first time for you. And I'm like, Oh, I know that phase. I know that phase. What's phase three? Well, before I get to phase three, let me say something else about phase two, everybody's giving you the advice that you need to delegate, delegate, delegate. That's the only way you're going to go. Well, you kind of go like, delegate to whom or to what? I mean, we had lots of great people, but by and large, they were focused on on bits of the business. You can't delegate the glue part. You can delegate the pieces, but somebody's got to hold it together. And by that time, honestly, my original partners had retired pretty much and shortly after the IPO and it was on you. It was kind of on me a little bit and a lot of great people. But, but you know, I was the one that got them into this mess and in this situation. So we need to figure out what to do next. Phase three is where you have the resources where you can put a real grown up management structure in place. And then a lot of entrepreneurs can't make that transition because the very thing that allows them to grow to the next phase is the very thing that they're usually not good at or don't even enjoy doing, which is to being one step removed and putting the structure in place and I'm focusing on the vision and the strategy and how to get organized. And more importantly, what to pursue. I mean, the world changes. The world doesn't stay still. For example, you know, in the late 90s, we basically got out of the, not basically, we got out of the retail business. And the reason we got out of the retail business in, I think it was 1999, two years after going public is that I met a man. His name was Lewis Borgers. He had started the first internet grocer. It was called a web van. He had raised a ton of money and he had built the first warehouse for e-commerce in a building 200,000 square foot building that he toured me in Oakland. And when I saw this vision of an internet grocer and remember, this is a well dial up internet that crashes every two seconds and this is really clunky e-commerce, but it was e-commerce. And we said, look, if this thing catches and it's only a matter of time because the internet is going to get faster and things are going to get better. And by the way, this is not revisionist history. If you go Google, AMB, web, van, Wall Street Journal, you'll see articles that were written about this in 99 and 2000. So we basically ended up selling our retail portfolio, which at the time was like, I remember who you sold that to. We sold it to it. It was a totally re-called Burnham Pacific. Burnham Pacific, that's right. And CalPERS. Scott Burham, I'm trying to think. It was actually David Martin at the time, who has passed away subsequently. But CalPERS was the. And CalPERS was a portion of their money. Yeah, it was an adventure. So we got out of the retail business by 2000 work. Maybe I'm getting the dates wrong by a year or something, but we're completely out of the retail business and double down on logistics and real estate and industrial. And that was the right decision in hindsight. It was the right decision in hindsight. But it wasn't obvious for the first five or six years after that, because retail kept tracking on no problem. Yeah, probably until the GFC, you know? But it didn't matter. I mean, actually retail went from. We sold our portfolio at an eight and a half cap and it went to like six. So some people say, well, maybe that wasn't a good decision. But we also bought industrial at the eight and a half that went to five. So we were okay. But we are much more focused. We were much more. We understood our customers much better, et cetera, et cetera. So anyway, that was the next evolution of the company that brings us to about two year 2000. Well, let me ask you one of the questions is about down turns and certainties. So let's talk about the GFC. Obviously, it's 0506, you started C little bits, seven started turn and then eight, nine and then 910 was the at least I I was in the business, the trough, certainly retail took it worse than industrial, but everything got affected. What was that? You know, you know, a mb stock hit 62 bucks. And in our day, it had 10 bucks at some point. Now, prologist, you old prologist with a funny L, hit low 70s and it went to a buck 80. Okay. I mean, it was teetering on the verge. I mean, I think general growth did go bankrupt. This one was the next one that could have gone back. This is before we got involved in all that. But they had 50 million square feet of spec space on their books. That was not occupied. And you know, you you're running your balance sheet at what is conservative 50% leverage. What do you have an overhang of a bunch of land and 52 million square feet of real empty space. And your equity drops in value by a ton. All of a sudden, what you thought was 50% leverage becomes 99% leverage. So both companies suffered, but the old prologist suffered a lot worse than a and b did. Now, here's the interesting thing. The retail index, the combination of over 100 companies went from one, two, three, four easy number to remember right before the global finish crisis. 1,234 was the index to 272. So it's not like we were special. Everybody got why everybody got back. Because people thought there was not going to be another dime of financing ever available. Ever. Realists. Yeah, for decades. And we did something that that actually the written business school case is about. We issued equity at $12.15 a share, which people thought was absolutely suicide. That was crazy. We totally diluted our share only based. I didn't feel good about it, but it was the key decision that put us in a position to play offense earlier than that. That's what allowed you to raise the capital. Go buy a bunch of product that prologists. Yeah, prologs. Okay. Yeah. Because before the global financial crisis, we were in the low 60s. They were in the low, they were in the mid low mid 70s. After the global financial crisis, a couple of years passed by, we were 35 and they were 12. And so and you were probably somewhat familiar with the portfolio. And you knew that as a high quality, it just I don't want to put words in about it was just too good of an opportunity that you knew wouldn't come around again. Was that the driver to a degree? Well, you know, we had half conversations with them. And this is all disclosed in the material that goes with an MN a deal. But in the early 2000s and we came very close to making a deal with them in your early 2000s because at that time, the original leader accompany a guy named Dame Brooksher was thinking about retiring. And he and Bud Lions ironically, Bud Lions is now our lead director. Came to see me and they wanted an effect to put the two companies together. This is in 2001. So that I would run the two companies together at that time because they had a succession issue. And ultimately, the 9/11 happened. And that sort of put the caboch on the entire transaction. And we each went our separate way. Who made the first phone call? You know, coming back around to it. How does this? It just giant merger. I think again, it was defined. I was in the business of the time merger of equals was huge. It was the largest time in the ideal. That's what I was going to say. I think it may still be one of them. I think it was. So I made the phone call. Here's the story. There was a conference. One of the banks was having a conference in Napa in November. And I noticed on the list that Walt Rackovich, who was the former CFO of the old prologist, was recruited back in to save the company. God bless him. Without him and his team, the old prologist would have withered it away. Anyway, and I had known Walt for a number of years since he was a partner at Terrible Cook Company in the 80s. And I liked him and I trusted him and all that. And so I called him up and I said, why don't we get together? You know, around this conference. And there's a whole funny story. I'll tell you about later around that. But I initiated the phone call. That was in I would say early first week of November of 2010. And we signed the L.O.I. I think between Christmas and New York. So I was pretty quick. It was really quick for something like that. Yeah. And we announced it at the end of January. Waltz did journal leaked it a couple of days before we were able to find out who leaked it. I have a pretty good feeling. I think it was one of our bankers. And I kind of know which one. But that shall remain in my between my years. But anyway. So we did the deal and it was and by the way, it was not obvious. You go read all the analyst reports from that era. And basically they all say, this is the dumbest thing that anybody's ever done. And no merger deal has ever worked. And people promise integrations and synergies and all that. And they never deliver. So I tend to ask this question oftentimes at the end of a podcast. But I got to assume a merger of that size. The question is, what is the craziest thing that's ever happened you professionally? But was there anything wild, you know, from the merger standpoint, any story that, you know, the audience would find fascinating? Well, this is a really cool story. And actually, they answered the both of them is yes, they happened together. So I think I mentioned that I got a hold of the wall at this conference and started the dialogue with him. And I said, well, why don't we go have dinner somewhere? But they're like 100 CEOs of this conference. We got to go somewhere really far away for discretion. Otherwise, people are going to think we're talking about doing a deal or something like that. That wouldn't be good. So I work really hard and find this obscure out of the way restaurant in Napa. The conference was in Napa. I had a place in Napa, but clear the other side of the valley, make a reservation. And I go there, my wife, myself, Walt and Sue his wife. We go to this. And right next door to the booth is sitting a guy who's the portfolio manager for one of our largest investors that invested in prologes and AMB. And he's having sitting there having dinner with his girlfriends, fiance or girlfriend. So the minute we sit down, he looks at us and says, oh, just a friendly dinner between two competitors. And we go, oh, we know each other for 25 years. And we're really good friends and all that kind of stuff. So fast forward two months later, this is in November. I think I told you at the end of January is when we announced the deal. The first person who calls me is this guy and says, just a friendly dinner between two competitors. So we got a giggle out of it. But the funny thing was the next year I invited him and his fiance had become his wife. So Walt, myself and this guy, plus or wise, went out to dinner at the same spot. I was going to say you kind of owed him because he if he had started talking about what he saw, it could have jeopardized the talks, but he, but we hadn't that's the truth. We hadn't started talking about anything. So my conscience was clear. So yeah, that's such a small world. It really especially a nap of alley, but yeah, they're in times of business. You want discretion for meetings and all that. And then you go somewhere and you see someone you're like, oh, no. Exactly. Yeah. Well, let's talk about, you know, oftentimes mergers, acquisitions, they're made because of the synergies. They're made because there's cost efficiency to put it lightly. A lot of times I could come with difficult decisions of, you know, personnel. Obviously real estate buildings don't have feelings, right? So if you sell off some buildings, it's not, it's not the end of the world. But, um, you know, what, what, what was the most of difficult decision you ever had to make in your career as a CEO? It was laying off people in 2008 at AMB. This had nothing to do with before logists, before before, before logists. I, we had never laid off anybody. Frankly, we got out of control. I mean, here are the numbers. I mean, they signed. They sound tiny now with the benefit of hindsight. But we were 600 people at AMB in January of 2008. By September of 2008, we had gotten to 850. Out of control growth. My fault. Yeah. My fault. Um, and by the end of 2008, we were back down to 600 people. So 600 was in the right number. We just want a little crazy in, in, in, in between. And I learned a few things about how to, how to control that much better the next time around. So, I don't ever, ever, ever want to lay off people. I mean, it was just the most dramatic. I couldn't sleep for six, nine months doing this. And, uh, but we were very thoughtful. We were very generous to people. We, I mean, I spent hours and hours and days on phone calls trying to get people jobs. And it was just not good. That was, by the time, yeah. Yeah. I didn't like that. Oh, yeah, I haven't had the experience. Um, and never done it before. And I never done it before. I never planned to do it after. And we haven't done it after. And, and just to give you a sense of companies now about 3000 people. Yeah. It's huge. What, what is the hardest part in your opinion about I'll be in CEO. Well, people don't always tell you what they think and you got to create conditions so that you you really hear from people. It's not because of you is because generally. There are a lot of people people in leadership positions that don't want to hear bad news and people extrapolate and they assume you're like that to and maybe you are. So people you don't hear all the facts you need to hear as a CEO. I think at the end of the day, you have to make a lot of big decisions with with imperfect information and you got to make them work. And you got to make tough personnel decisions. I mean, we've never done layoffs. Well, we certainly have transition people that weren't working out or you know all that. Those are important decisions that you're making. And by the way, one of the things I learned is that you never make those decisions too soon. And maybe there's something psychologically wrong with you if you're trigger happy and don't make those decisions too soon. So I've justified this to myself that the reason I'm slow at the trigger or doing these kinds of decisions is because I'm really a good guy and I want to give people a chance. Usually doesn't work. Yeah, and is one of the at least my experiences when you finally make the decision. You're like, man, like why didn't I make that sooner? But you sleep better at night. So that's okay. I got a question from the audience is kind of related like we posted something and said, hey, let me sit now with you ask us. So I actually picked a couple of those questions. One was what do you now know about building a company after 40 years that you you could not have known at year one or 10 or even 20. It's a lot tougher than you think it is because you only hear about the successful examples. There's a real survivor bias. You know, people don't have podcasts with people whose company is a blown up or like being a rock star here. Yeah, exactly. So it's the only you only see the ones who make it. Yeah, precisely. It's it's really hard. But it's very fulfilling. If you can make it work. And by far, and this is such a cliche. But by far getting the culture right and the people side right is the most important thing. And it's so liberating. Once you finally get that very simple lesson through your thick skull or my thick skull. Yeah, actually make sure job is a leader easier. It's so much easier at SC. I know you guys are going to look to replicate this at Stanford in the sense. You know, I was there when Pete was there. We want a lot. We had great coaches and schemes and all that. But it was the culture of the team. Really in my opinion that the coaches created mind you. But it became a life of its own. And we held each other accountable, which the job of a leader of a coach of a CEO is never easy. But it makes your job easier if you get the culture right. Absolutely. But getting the culture right is really hard. Because you know, you culture is one of those things that takes forever to get it right. We get wrong. And it takes a second. Yeah. And people watch like a rock to see whether what you talk about them, what you do. If you're actually about it, whether there's even an inch of daylight in between those people become very cynical about you. Yeah, they do. So you've got to be consistent and you got to you got to really believe you can't fake it. You just can't. I got a question about culture. It's my opinion. And I want an interest in yours that you know, I think about it from a real estate brokerage perspective, whether it's a company or an office. I think it's easier to actually start a new office or a new company from scratch and build a culture that way. Then it is to change the culture. You I think you can. It just sometimes it'd be like, if I'm leading an office or I'm not leading company, I'd rather just start from scratch and deal with the challenges of doing that. Because I agree the culture is the most important thing. I actually think it's easier. It's not easy to build the right culture from scratch than to come into a company as a CEO and say, OK, I got to change. It takes a long time and a lot of difficult decisions. Oftentimes people won't they'll get they'll fight you from changing the culture and you'll have to ask them to leave at some point. And that that's no fun. So I generally agree with you. And I'd like to add and yeah, please because it's really important. And I learned this trying to put the prologists and the amb together after the merger. Depends on what parts of the culture you're trying to change. If you have a culture that's really committed to doing the right thing, I integrity, et cetera, et cetera. But is highly structured and bureaucratic and corporate and top down. And you have another culture that has the right values wants to do the right thing is straightforward. These people well, but it's a very go figure it out kind of culture like amb was the first example was like the logist was. That is doable. That is very ingenuity there. That yeah, you can belt you can take the best parts of one culture and added to that best parts of the other culture and hopefully get rid of the bad parts of each culture. But the foundation of the values is there. If the foundation of the values is not there. Everything else can be the same, but it's impossible to put those together. You almost have to do radical surgery to do that. So in the case of prologists and amb merger, I would say that was the toughest part of the integration is getting the two cultures together. But the foundations were all good. I mean, they were good people. They were just, you know, one was in a suburban office building, you know, 30 miles outside of town, like a typical corporate campus. There were no sidewalks. So everybody drove their car to the garage and all that. And you to go to the fifth floor where the executives were, you needed a card key to put into there to get access to the fifth floor. Very top down very bureaucratic, very corporate. I shouldn't say bureaucratic very corporate amb was on a pier in the middle of the bay San Francisco Bay. It was like open space. You know, everybody was all over every. Those are very different cultures, right? But there were both good people with good values. So that that wasn't hard. But if you don't have the right values, I think culture is impossible. What's the biggest leadership mistake you think you ever made that taught you the most? I allowed a leader to get into a leadership position that was not committed to the culture that we were trying to build. And I oversupported that person for a long period of time. And then I was, I was too slow playing the trigger on it. And it almost took the company. Why do you think that is because I'm an idiot. Yeah. Maybe in that moment, I would all of us are idiots. Well, sometimes fear drives like why felt like if I fired him, he would take a bunch about my best people. No, I wasn't worried about that at all, not in the least with worried about that. I did it because it was like I can make this work. I can make everything work, you know. So some hubris like I can I can fix this. Yeah. It's the same old thing of not wanting to pull the trigger too fast. Yeah. You know, we said it half an hour ago. You know. I, you know, I've had some similar where it's like, no, I can fix this. I can, I can get through to him and I can show him why he should change and then very difficult. It never happens. Yeah. It's happened once. It's happened once in my experience. That's the problem is it happened one time. And so every, you know, well, maybe this will be the next one time. But it's sort of like capital punishment, right? Yeah. We have all these guardrails that you don't want to condemn somebody to life in prison or capital punishment worse. If there's a 1% chance that you would have it wrong and maybe a lot of people slip by because of that, because of that tendency, it's okay. It's okay. You don't, you don't want to do the opposite. You don't want to be too trigger happy or you don't want to, you know, I was going to ask do you coach to the exception or to the rule, right? I think you coached the rule, but always keep your mind open as to the exception. Understood. Let's talk about the decision to step down a CEO after I'm in, you know, shoot 40 years, big decades, you know, certainly a 42 and a half years. 42 and a half years. I actually, I did this. I was doing my last earnings call and I did the math. I had done as a public company. This doesn't count the private time of AMB. Is it? And, you know, and actually, there's only one guy in the S&P 100. I mean, good, really good company. I'm, by the way, I'm not trying to compare myself to him. He's complex so much more. But Buffett is the guy that's been longer CEO than me in the S&P 100. He's been 50. But he didn't do 112. He doesn't do earnings calls. He's way too smart to do. He just does his annual conference where he's a rock star. Yeah, he is. Yeah. Yeah. And S&P 100, I forgot to mention that earlier. It's just such a powerful company. By the way, one thing people forget about us not that this matters is that our market cap doesn't include our OP units. It's just this trader, right at stock. We have very significant OP units. And we have a $70 billion private capital business that's not in the market cap. So if you add those two up, then the total asset base is $230. Good thing you're not in California anymore because you're going to tax your 5%. You know, no, no, no, no, but I mean, that's, I don't know. I know the company. Well, you know, whoever it does. Yeah. What do you, I'm going to ask you two sides of this. What are you most looking forward to that you won't miss it all about being the CEO. earnings calls. Like you like and grandfather. My son just got more. Well, as you guys say, what are you looking forward to the most, you know, now that you're no longer the CEO? With the company? Yeah, professionally speaking. And then I'll ask you personally, like, what are you looking for? Oh, I never have to, I don't have to take these calls or do these things. And then what are you going to miss the most? I look at some point in your life, you transition to wanting to see other people be really successful. And I really want and know that are people that are running the business. I have ultimate confidence in them. I haven't sold the share of stock. By the way, I never received any compensation and cash or anything. So always been stock enough. So very little of it only to give it security because I feel a little like doesn't mean that I want that sometime it would be improved not to because I'm 70% invested in one stock. But you got to get that Stanford NIL, yeah, exactly. But but I have confidence to have 70% of my net worth run by this management team. And I think they'll do a fabulous job. There's no there's no greater vote of confidence. Watching these guys grow and, you know, almost all of them, there are a couple exceptions because we've gone into the energy business and all that and I'm brought some people from the outside. But by and large, they're homegrown or work with them for 20 years or more. And it's great to see these guys grow and be responsible for arguably one of the largest, no, not arguably one of the largest real estate companies in the world and be doing a good job. And what won't you miss? I will miss all the other stuff that you need to do to run a public company, a lot of which actually doesn't add value. And like, I don't know, I don't, I'm not wild about all the same questions that you get over and over and over again. Some of them are great questions, some of them are not great questions. But to sit, for example, I don't miss well meeting days at conferences, because you have half an hour segments with people, they're hearing all different stories because they're going around talking to different companies. So it's fun for them. But yours is the same, it's the same interview time. And it's so inefficient because there are other ways of doing it. But what you got to do it, it's part of the game. It's part of the gig. Being super responsive to people, if you look at my email box, like now, let's look at it right now. I'm in the order, there's seven messages in here. Before we started the meeting, there were one, I respond to people right away. It feel like I'm always there with them. And I mean it, I just not like, I don't respond to say, okay, I heard you or something, I respond with them. It's a, it takes a big toll, particularly when you run a global company at different time zones. Now, some of the ones from Japan, I don't respond to this quickly, yes, because I'm asleep. But, but I think being responsive to people is the ultimate sign of respect. And to me, one thing that drives me crazy is when I email a front facing customer facing person, and a message comes back that says, I'm on vacation. Oh, it would respond to you. We have a way from it. It's it. Look, I don't want you working 24 seven. Okay. But you are in the customer facing position. And it just right. I can do our podcast on that. It's generally known at Matthews. You never want to be the guy or gal who has an out of office. You know, you could go on and less you're literally like hiking Machu Picchu and you don't have social reception. And somebody's going to need answer. And say Machu Picchu. I'm on Machu Picchu. And by the way, called Joe, yeah. But generally, even if you're on vacation, you know, you could go back and look real quick. And by the way, this is going to probably land me in jail in France because you're not a lot to email people after business hours. And that's why they're GDP sucks. I didn't say that guys. He did. I did. Well, that's why they're French. You know, we need we need them up. Personal question. I, you know, you married children. One one kid. Was there a period of your career where, you know, we kind of joked about work life balance earlier. But where when you start having children, you have other commitments. And that's been for me. And for a lot of people, they're like, how do you do it? How did you do it? Or did you? First of all, I have a great wife. Yeah. And she, because of our success, she had the opportunity. She's a lawyer and when to stand for it and, you know, smart person and all that. But she basically decided to stay at home and take care of our our family. And I had one. So it was easier. I was going to say you're smart. I see I didn't I just I kept forgetting. And I And I made a point no matter where I was in the world, I would always be there on the weekends. And when I was there, I was really there. Yeah. We can't see. But but I'm sure I could have done a better job. By the way, turned out great. I love the way my sons turned out and we have great relationship and all that. But you could have just as easily not in sure. You know, I think I heard you say you're most looking forward to being a grandpa granddad. Yeah, I think that would be really cool because then you can play with them and you can hand them off to somebody else. And you can just give them back. I tell my kids all the time I said, I didn't want kids. I want a grand kid. So I just had to have you get to them. I hope they know I'm half joking. But some days if their behavior is bad, I'm not joking at all. Yeah, I don't know how you handle for especially at the age of you described my my wife. I met right now. She's a natural. She hasn't had power for four days. She has four kids. No Wi-Fi, no, no TV nothing's working. And you know, I'm not going to say they're having been complaints, but she's just like, Hey, this is my responsibility. You're out there doing your responsibility. It works. You know, it's a look. It really pays to have a great partner. I don't know how you do this or you don't, you without. And that's just a fact. I mean, that's actually a lot of the conversation I'm having with younger professionals at Matthews that are growing up is they're asking for advice. And you know, I give them brokerage advice, I give them real estate. And a lot of my advice now has been kind of transferring to like, you have to find the right partner in life. And it will actually accelerate. And in some sense, make make it easier. But certainly more satisfaction if there's someone on the journey with you. In every aspect, I would say the two best decisions I ever made was marrying my wife and finding Bob and Doug as my original partners. Bob, Doug and I actually, Bob and I mostly they describe me at the accelerator, Bob has the break and Doug has a clutch, keeping us from killing each other. We we had all kinds of drag out, you know, discussions and arguments and all that. But we never, ever, ever remember having a discussion about what's the right thing to do. We would have discussions about how to go about it and all that kind of stuff. So, so I think those two decisions were vital, the success of what advice would you give to a young entrepreneur who wants to, you know, build something meaningful, but wants to be like, Hey, I mean, I want to I want to do what you did. Like, what advice would you have for? Don't do what I did because what I did is much harder to do today than it was when we did it. There was no organized industrial player. The business was very fragmented. And you got to go figure out something where there's white space and there is opportunity. And you can really do it. So go be an entrepreneur. I'm a big fan of being an entrepreneur, but you got to do something different or something that has some differentiation or something doing the same old thing. Yeah, maybe you can do okay. But, but you got to. Yeah, it's it's a, what I, you know, I think a lot of people call it the efficient market, you know, really efficient. And it's more efficient than when when I started. Yeah, look, I this is actually interesting. When people, a lot of young people come and talk to me about various things. And 30 years ago when they came to me and said, what do I go talk to in real estate and how do I network? I would give them 40 developers, two to three person shops in the Bay area that were making a great living being a developer, private developer. I don't honestly, I can't think of more than two or three today. Really? So the business has changed. The business has become much more corporate, much more institutionalized, much more centrally financed doesn't mean there is an opportunity for for entrepreneurship. It just means the middle has gone away. You either have to be a really good entrepreneur, know your markets really super well, better than anybody else, or you got to be scaled and have competitive advantage. I, you know, it's just the middle doesn't really work. If you had to, if you had to start something from scratch today in commercial real estate, what would your, what, where do you see the opportunity? I think the biggest opportunity that Prologist has in front of it. And I'll tell you why I mentioned Prologist is to build a data business that will serve the needs of our customers. When you have you started a podcast with this 3% of global GDP going through your buildings, you should know a lot about what's going on in the world. That has value. And most of that information isn't public or certainly not put together in a sense of the biggest, you know, everybody talks about AI and how it's going to make everything great. The problem is most real estate companies don't have clean information that's been digitized. That's the first step to a point. any kind of AI or data analytics or whatever. The data lives in shoeboxes or in people's ads. - Crazy. - You gotta be able to weigh connecting all that and drawing inferences from it. And that is a harder step than making the thing happen after you have to digitize the information. So I think that's a huge opportunity. And if I were gonna start a company, I would let ProLogist do its thing and I would go to them with an offering that we will do this for you and we'll do it really well. - It's almost like a data service is provider. Like yeah, and not a software company, but. - It's a Bloomberg? - Yeah. - Bloomberg of goods. - Goods. - As opposed to financial flows. - Interesting. Yeah, we, at our company, we're like, look, we have 60,000 B.O.Vs just sitting in our. - What's the B.O.V. - Broker opinion of value. - Okay. - Like so the rent roll PNLs, and this information, you know, unless it's ProLogist. And even asset level, it's not public. And so, but historically, if you go back five years, like how would we put all that together and mine it for trends and flows. And but now with language models and how they work. - As long as people capture the information and digitize. - But like, do you know how much you mentioned leasing? Do you know how much we lease it every day? - Yes. - How many square feet? - Mm-hmm. - I don't know. - Every day? - Every day. Every business day. - 100,000? I don't know. - Million feet. - So if even if you're a dummy like me, if you're leasing a million square feet, there should be a lot of information out there. Not proprietary, not JoX Company is doing this in this location, not that. That information is highly proprietary and has really is not actionable, it doesn't have any value. But what is the aggregation of this information tell you about where the market is going, where direction? People talk about scale. What do they talk about scale? Costic capital is lower. GNA is lower for unit of whatever you're running. I think in the next decade, it's gonna be the proprietary information that you have. Because everybody can access the LLAMs that are running in public information. But the power of that is when you combine it with information, only you have. - That is the new oil, as my CFO loves to say. All right, last question for you, Hamid. And this is from the audience. Someone named Alex Herald based out of El Segundo, California, sounds like a weird guy. I'm just kidding. Alex is our top agent nationally and he's industrial. And so he said, if you could, ask Hamid if he had to do it all over again, but was starting to income virtual real estate. So taking account changes in asset, assets, capital markets, competition, tech, all of it. How would he go about building a portfolio of real estate? - Carefully and slowly. And look, here's what I've learned. The biggest lesson I've learned on the real estate part of what we've been talking about because we talked about pretty much everything other than real estate. In this part. - That's why he says not real estate podcasts. - Yeah, so all the time. - So I think supply matters a lot more than demand. And people always think about, you gotta have demand because if you don't have demand, you don't have marginal bid for your product. But over time, supply really, really matters. And I think it's much easier to buy those. Look, you always overpay for buying property. It feels like you're overpaying by buying property that's very supply constraint. But in the long time, you're very happy doing that because they don't make any more of it. And over time, look, a great building in the South Bay of LA in 1980, their rent was maybe 20% better than Dallas. Now it's like 5x Dallas, although Dallas is becoming in fill too because we were running out of land. But or compared to that same building in Modesto, the rent was maybe 20%, 30% better. Now it's like 5x better. So over time, I think really special locations, I just gotta say location location location. Location and constrained locations that are fortress locations, I think are really important. So I would choreograph, choreograph a portfolio that's really special locations. I love it. I couldn't agree more. I mean, this has been great. For everyone listening, you can learn more about Prologists and the work they're doing at Prologist.com. And one of the questions I got, I didn't write it down, was like, why do you only have 11 connections on LinkedIn? But I said, if you found value in this episode, don't forget to follow me on Instagram, TikTok, and LinkedIn. And you do have a LinkedIn profile. Normally, I'll be like, you can-- - Actually, Jamie, my chief of staff deals with that. I look, if I wanted to do that, then I wouldn't be responsive to the people. I need to be responsive. - Yeah. - So I've decided to take my time and respond to people that are within my universe. And as a result of that, not deal with-- I mean, I don't care what 500,000 people care about, what we're doing. Care about our customers, I care about our people. - And they have your email. - And they have my email. And by the way, I do spend, one of my fears about doing things like this, is that I spend, I have a soft place in my heart for young people coming out of school because I have such a hard time getting a job that I spend a lot of time mentoring people and helping people that are either starting businesses or coming out of school and trying to get a job and all that. The problem is you go to one of these things or you give a fox somewhere and all that. And all of a sudden, you get 5,000 of these. And I cannot be responsive to 5,000 things. Not because I'm a bad guy. I want to respond to my-- - Yeah. - But you can. So I've shut down the bigger universe that I don't have. I'm the opposite. I'm my universe getting bigger. And I was thinking about what you're saying. I responded to everybody right away. And I was like, oh gosh, like that. Just the amount of DMs on LinkedIn and like, hey, could we set 30 minutes? I'd love to pick your brand. And I'm-- - I'm not responsive to any of that because I don't, I haven't turned down my, I don't even know what my LinkedIn says, honestly. - Well, I'll read it off. Not your LinkedIn, but if you have his email, then the chances are he'll respond to you quickly. But again, you could catch more inspiring conversations on the Matthews mentality, "Pockets, wherever you listen to me, I really appreciate it." I know you don't do a lot. He's, I'm very grateful. We got to have maybe not in Tehran yet, but me, you, Johan, will do some dinner. And then I got to come see you at Stanford one of these days. My wife wants my kid to go there. So I was like, well, I don't know about the education. So you better start lifting weights and get good at football. Or something. But he's got really good grades. - Honestly. - He's got a four, six out of five. I guess the GPAs are different now. - How do you get a five GPA, you know? - It's straight A's with like A's. - A P's. - Yeah. - I'm a public school kid, man. This is outside my gyrosyctin. So I let my wife handle that. But I'll come see you up in the bay next time you there. Or next time we're in Vegas. But again, thank you for doing this. This was awesome. - Great. It's been fun. - Thank you. [Music]