Jon & Stephen Davis - The Davis Companies

Welcome back to Good Dirt, conversations with leaders in real estate and beyond. We are your hosts, Mike Greeley and Tom Greeley, brothers and teammates within the Newmark Capital Markets platform. Before we jump into today's episode, we want to pause for a moment and thank our growing audience for all the enthusiastic feedback we've received. We've been blown away by the response and sincerely appreciate each of you who has listened, subscribed, and shared this podcast. We are seeing the network effect play out in real time, and it's especially gratifying because this is exactly what we hope to create, an interview series that is not only interesting to us, but to a wide audience of listeners, and that each conversation includes insights that you would consider to be worthy of sharing with a friend, colleague, or client. So please continue to do so, and for the less tech savvy, it's easy. In Apple and Spotify, tap the little three dots and then tap share episode. And in that, you've helped us grow. And we are grateful. Before we talk about this week's guests, which is a great conversation, I'd add to Mike's opening there a quick apology for the slightly nasal sound of our voices, which we didn't know until we started listening to our own podcast. So apology for that. And another apology for the joint overuse of the words, amazing, placemaking, and game changing. We're putting those in the do not use list going forward. So apologies. Today's conversation is an exciting one for us, especially because when we conceived of Good Dirt. These two were at the very top of our list to talk to. John Davis, the CEO and founder of the Davis companies, and Steven Davis, the firm's president. They certainly live up to our internal hype, and we're excited for you to listen to the conversation. John has long been known as one of commercial real estate industry's most astute investors. And like prior guests, we asked him to start his story from the beginning. In just four episodes, we already have our second son of a dentist turned real estate impresario. And John's early investments are the stuff of real estate folklore. Namely, his conversion of a real estate company. His conversion of Beacon Hill's Burma Street Garage into the nation's first ever condo parking garage in 1979, which is such a cool story. No more spoilers, but buckle up for a fun conversation that gets to Davis's entry into the fund management business, a move that coincided with Steven's arrival at the firm as associate counsel, and brings us to today and Davis's continued focus on markets driven by intellectual capital, innovation, and growth industries, as well as an antenna up for distress situations resulting from the COVID-19 and ensuing capital markets. So, let's get started. Let's get started. market's headwinds. We even get some healthy father-son banter and a glimpse into how these two keep things fun at Davis while maintaining the dialed-in analytical approach they've become famous for. With that, let's get into it. Enjoy. This afternoon, we are excited to be joined here in the Newmark offices by Jonathan Davis, CEO and founder of the Davis Companies, and Stephen Davis, the firm's president. The commute was easy as the Davis offices are just across High Street from us, but nevertheless, we appreciate you two carving out the time to come and talk shop for a bit. It's a pleasure. Thank you for the invitation. We love having you here. So there's a lot to cover. We're going to get right into it. We're going to go back and set the scene. It's 1976. Jimmy Carter defeats incumbent Gerald Ford. Steve Jobs founds Apple. Bill Gates incorporates Microsoft. And John Davis founds the Davis Companies. John, a distinguished year. Man, do I feel like a slacker now. A distinguished year. Take us back to the beginning, to founding the company and how you've grown since then. Sure. Thanks so much for having us. So 1976, I was just out of college. I'd had the opportunity to work a couple of summers in the real estate business in Boston. Had already bought my first property, a very small property, a three-family house in Jamaica Plain. And I saw a lot of opportunity. I was planning to go to law school. In fact, I had applied and got admission to a couple of law schools to take a chance and defer admission and to see if I could make a go in real estate. Boston was in a really interesting position at that point. There was a real transformation. And frankly, it's the same transformation that we've all been watching and been beneficiaries of for a number of decades here. But it was in its very earliest stages. The economy, which had been in the early and into the middle of the 20th century, was in its very earliest stages. The economy, which had been in the early and into the middle of the 20th century, the mercantile and manufacturing was repositioning. There was a little bit of a bump during the Vietnam War from, obviously, defense electronics, but also some of those manufacturing industries. Canvas, as an example, for the military was busy, but the war was over. And where do we go from here? Very quietly, the economy was changing. When I say quietly, I don't think it was fully understood. Magnitude of the transformation that was going on in the financial services industry with the growth of the various asset management companies that became prominent in Boston. They all were here before, but they were going through the early stages of very dynamic growth. And of course, the electronics industry was changing. The educational institutions were growing, as were the healthcare institutions. Frankly, I didn't know a whole lot about macroeconomics. What I knew was I could buy a three-family house in Jamaica Plain for $30,000 and generate $10,000 a year of net income before debt service. And so that led to a very important component, which was leverage, because I didn't have any money. So I was buying these properties, the first one and subsequent properties, with bank-first mortgage financing. And it's amazing how many houses the bank believed I was going to be a primary resident of. I had a second mortgagee that I'd been introduced to by a mortgage broker who was a retired guy in Newton, an Italian guy that spent all his time, as far as I could tell, doing two things. One was tending his tomatoes in the backyard, and the other was underwriting second mortgages at 18%. And I was fortunate enough to develop a relationship with him, and he would finance up to, let's say, 90% or 95% of the purchase price. On top of these 75% or 80% first mortgages that we were getting. And did you say 18% was the interest rate? 18%, yeah. And I think two points, or maybe it was a point in and a point out. And for working capital and for equity, I had six credit cards. And at the time, the advance rate on the cash advance rate was, if I remember correctly, it was 8%. So I had a couple of $100,000 working capital line of credit, essentially, unsecured line of credit. Well, yes, I was signed on those credit cards, so maybe it wasn't so insecure, but I didn't have anything anyway, so it didn't matter. And that was my working capital. And were you running these as rental properties, or were you flipping? I bought them for income. I mean, the math is, if your overall cost is, let's say, 10% between the first mortgage and the second mortgage, and the line of credit is something like 10%, and you're generating a 30% unleveraged return, it's very accretive every time you buy a house. If I remember correctly, it was $400 or $500 a month per property. So you do 10 of those, and now in 1976 dollars, you've got a pretty good income. And then I had an opportunity in 1976 to buy a much larger property in this neighborhood that I was concentrating on. It was an 83-unit building. And for those of you that are in the multifamily business, and frankly, for those of you who are not, will appreciate this, it was $8,000 a unit. I think that's what new clients have cost these days for a unit. I think it's actually more expensive than that. And I needed $75,000, and I was going to syndicate this transaction. And so my dad, who was a dentist in Pittsburgh, he and I were very close, and he was very interested in what I was doing. And he was disappointed that I didn't go to law school, but he figured this was, you know, he better watch me closely to see what was, make sure I didn't fall off the bridge. Anyway, I was explaining this transaction to him and how I was going to raise the capital. And I said, you know, I'm going to syndicate it. And he said, well, you know, if it's such a great deal, why would you syndicate it? I think the down payment was $75,000. I said, well, I don't have $75,000. And he said, well, maybe your mother and I will give it to you. And I said, well, wait a second, where are you going to get $75,000? He said, well, maybe we'll refinance our house. Now, you got to remember, I was 23 years old at the time. So that's how we bought the property. And the strategy was at the time, Boston had just enacted vacancy decontrol. And this was a rent controlled property. And so the plan was, I think if I remember correctly, the rents were $200 or $300 a month for an average 1,200 square foot unit. What is that? That's pretty cheap on a $1,500 basis, right? 25 cents a square foot, $3 a foot or something. It's hard math to even do at those levels. The numbers are too low. And the market rents, because the area was gentrifying, with the young professionals and all the employment sectors that we were talking about earlier, I think the market rents were $800 or $900 a month. And so we plan to grow the income over time, improve the property, do cosmetic improvements primarily. Well, what happened was that as the gentrification continued, the rents in Boston were going up as they have been over the last few years at double digit annual rates. And so the rents were going up, and the rents were going down. And so the pace of vacancy of the building slowed down. And at the same time, oil crisis. So we had a big spike in energy costs and real estate taxes were going up and other expenses as well. So we struggled with the property for a number of years. But in 1979, we had the ability to convert the property to condominiums. And we made deals with the remaining tenants and the ones that we weren't able to. I mean, we didn't have an obligation to do this, but we found relocation solutions for all the tenants in the building that didn't want to buy. And we put it on the market. And I think the average price was like $55,000 or $60,000 a unit against our $8,000 purchase price. Wow. You had some happy investors. You know, my father, I think, made more money on that deal than he had made practicing dentistry for the prior 10 years. Isn't that amazing? That's cool. Very cool. Obviously, it felt great to reward their confidence. Yeah, I'm sure you cleared their press pretty quickly too. That's so good. That's awesome. So there was no turning back, obviously, at that point. Yeah. Yeah. So that was in 1979. And I think we finished the sellout of the project in 1980. And in 1980, I got the opportunity to buy this parking garage on Beacon Hill, the Berman Street garage. And the profile of the garage, first of all, it was a small project. And people that know this, I'm going to make your head spin now because you thought $8,000 a unit for that apartment complex in Jamaica Plain was a good deal. We paid for 110 parking spaces on Beacon Hill. We paid $440,000. So we paid $4,000 a space. Our daughter, Stephen's sister, used to live on Berman Street and she rented at the Berman Street garage. She paid more in rent in a year than the people paid us for, in fact, close to double what we bought those parking spaces for. And for people listening, just for context, this is on the flat of the hill on Berman, Street. Amazing residential real estate sub-market. You know, this is a place that tourists, you come to Boston, you walk around and just sort of, you're in awe of the homes here. But you're ahead of your time. I think there's a couple of points about this that are worth talking about. One is that unlike the Back Bay, there are no back alleys in Beacon Hill. So parking is really, really desperately short. The only alternative was the Boston Common Garage. And at the time, the crime rate in Boston was much higher than it is now. And I think sometime in the 1980s, there was a very extensive capital improvement program that was performed on the Common Garage. But at the time, you know, it was leaking like a sieve. So it was unsafe, dark, and leaked like a sieve. So, you know, the people who lived in the, at the time, probably the homes that are now $10 to $20 million were $300 to $800,000. Very expensive for the. And you had the carriage trade there. You had people who lived there as either their primary residence or one of multiple residences. To the extent that they worked, they worked in the financial district probably, and they walked to work. So this was their only parking space. And so frankly, they didn't have an alternative. Well, anyway, I could get into some more of the dynamics. But I think the point of all of this is that we put it on the market and we offered the 90-day rate of first refusal to buy those parking spaces. And we showed them if the parking spaces went up over five years to $50,000, that it was cheaper for them to buy than it would have been to rent. Nonetheless, they were very upset, a lot of them, about having to buy. But 75% of them did. And the day, and those of you who have this much history will appreciate this, the day that we went into our fanfare, 75% was pre-sold. And so we really had driven demand for the remaining units was the day before Pope John Paul was going to address the faithful on the Boston Common, his first visit to the United States since being appointed pope. So you had the entire international press corps here in Boston waiting for tomorrow when the pope would be on the common. And they had time, they needed a story. And so all of a sudden, we hit the jackpot in terms of PR. At the time, I was 26 years old. I was in 165 newspapers, on the Today Show, in People Magazine, etc. And so just to take a step back, so we had a bankroll from the condo project in Jamaica Plain. We made decent money on the project, the Berman Street Garage, but where it was much more important was the notoriety that we got. So we had capital to invest, we had deal flow. And then in 1981, Ronald Reagan came in and defeated Jimmy Carter, because Jimmy Carter was a one-term president, and deregulated the banking industry and put in place accelerated, well, he and the Congress, put in place accelerated depreciation for real estate, and also put in place the historic investment tax credit. And so we had a. A market with dramatically changing economic underpinnings here in Boston. We were early adopters in the investing in these emerging neighborhoods, and we had tremendous public policy wind at our back. And so from 1981 until 1989, we went through a period of tremendous growth, so much so that we had something over $100 million worth of development underway when the S&L crisis hit in 1989. And it had been happy times from 1976 to 1989. 1989, all of a sudden the market stopped, and I found lots of founder entrepreneurs of fast-growing companies. We were completely illiquid, we were way over-leveraged, and we're within a hair's breadth of bankruptcy, frankly. But something fortuitous happened, and that is that our bank got taken over by the federal government. And prior to our bank getting taken over by the federal government, they were under huge liquidity pressure. So they were putting pressure on us to. They didn't want to extend loans. They wanted to be paid off. And there was no market. There was no way to do that. So when the feds came in, their attitude was, how much money, how much cash can you give us? How fast? Fortunately, we had built great relationships with the federal government. We had built great relationships with a group of high-net-worth investors. And we found a bank that understood the opportunity that we had, and that was the private bank at Citibank. And together with our existing investors and some new investors that we brought in, we bought back $85 million of our own debt for $48 million and repositioned the company. Isn't that amazing? Wow. So you were in a position where you went through quite a run for that stretch from the first resi deals to Broom Street Garage deal is something that real estate people love to talk about. I mean, that's the first parking condominium in America. Yeah. And it's very cool. I think that ingenuity, you've applied that throughout the rest of your career and through the Davis companies has always carried that. You're ready to go on offense, even if it's something that hasn't been done before. The Broom Street Garage is folklore in our business. All the young guys talk about it. Everybody compares notes in the deal and tells war stories. But that one is just one of the coolest stories. You know, I think these listeners might enjoy the lesson you learned about what constitutes a condominium through that process. Yeah. Thank you. And as Tom and Mike know, Stephen is a recovering attorney. So that's a really, that's a really great nerdy question. The people want to know. Inquiring minds want to know, right? So what Stephen's talking about is that chapter 183A of the Massachusetts general laws is the condominium enabling statute. And it may have been changed now, but the way it was written in 1989 was that condominiums, nobody envisioned an office building being condominiumized, much less a parking garage. So there's a lot of references to access to common corridors and things like that. And I had a fantastic, very, very creative attorney that was my personal attorney. In fact, he still is my personal attorney today. He's semi-retired, but you know, his attitude was, oh, and I should say, if we had used the literal, definition in the statute of what constituted a condominium, you might get 60 parking spaces out of it. The truth was that people didn't care to own a unit. What they wanted was the right to park. And in fact, they wanted to drive in, get out of their car, hand the keys to the valet and not know what happened to their car. So, you know, I was kicking this around with my attorney. And by the way, the people we bought it from were the foreclosing second mortgagee who had fined in somebody else's attempt to do this. So much as I'd like to take credit for having the idea, we didn't have the idea. What we had was the smarts to figure out how to do it right. And I think timing helped because, you know, the market was appreciating. Anyway, long and short of it is my attorney's attitude was the definition of a condominium is whatever the title insurance company says that it is. And so we were able to get First American Title to write a title insurance essentially calling a license to park a condominium unit. And that was the thing that enabled us to get 110 parking spaces out of the garage. I think as long as we're digging into the details, there is one other thing that's worth saying, which is that I mentioned the second Iranian oil crisis in connection to the condominium project. And everybody I'm sitting with here is too young to remember this, but maybe there are some people who are your listeners who will remember this, that not only was gas very expensive, but you had to stand in line to get it. And there were many times when you couldn't get it. So we had two gas pumps at the Berman Street Garage, and I had a oil supplier who was also a gasoline dealer, and they helped us out, and we had free access to gasoline. I mean, maybe it was 25 or 30 cents a gallon more than what it would have been on the street if you could get it, but you didn't have to stand in line and you knew you were going to get it. It was obviously a major sales incentive too. Right. That was the amenity for that condo building. Yeah, it was a major amenity. Oh, you don't think it was the carpet that we put up on the columns? It was a collection of things that sold them. So Steve, lawyer in recovery, we talked a little bit about it. Tell us about when you joined the business and how you got into real estate first, and then ended up at the Davis Companies. Sure. So I actually went into law school without any intention of going into real estate, much less the family business. My career path was one that was headed towards being a plaintiff-side class action litigator, and there's a few reasons for that, but they're kind of irrelevant. What is relevant is- One is there's a lot of money in it. That's okay. You're allowed. So I wanted to sue big corporations, but I'm also an economic being. Anyways, what is relevant is in kind of pursuit of that, after my first year of law school, I worked for a judge at the federal district courthouse here in Boston, and we were handling a class action litigation. They were on their fifth year of jurisdictional motions, which means in late terms that for five years, they had been arguing about which court they could argue in front of. And I realized at that point, very quickly, that just really wasn't going to be the business for me. So my kind of interest in real estate came first academically. When I went back to law school for my second year, it was with a blank slate and something about real estate law, and not so much property law, but transactional real estate law just clicked with me. And so I ended up getting a job here in Boston through the kind of normal course of things, intern somewhere, have summer associateship after your second year, and then that's where you go when you graduate. The problem for that plan was one, again, of market timing, because I graduated law school in 2009. And with all of the trappings and the things that really precipitated the global financial crisis happening all around us, mine and the majority of the people I know coming out of law school lost their job offer they'd been sitting on for the previous year. So it kind of forced a decision that had been kicking around more conceptually as something potentially to happen in the future. And I ended up joining our firm at that point, in part because there was no other job to be had, and in part, frankly, because I saw what was a pretty compelling opportunity. While the rest of the market, unless you were in bankruptcy or tax, there wasn't a whole lot of activity going on at that point. Just by sheer luck, our family firm was in the process of raising its first value-add private equity fund. And so not only did I have what was a very compelling job, but it was like jumping into a rocket ship because we all of a sudden were doing investments in Colorado, in Chicago, and we saw some things in South Florida that we were buying CMBS. We had to register with the SEC. I mean, it was unbelievably good experience to have gotten as a young attorney. And 14 years later, I'm actually, I count what happened in 2009 as one of the more fortunate things that could have happened to me. So just to go back to the wonkiness for a second, why don't you talk for a second, you mentioned Colorado, why don't you talk about putting back together a broken tick as one of your first taxes as an attorney? Talk about making your head spin. Yeah. Yeah. So my first job with our company was demolition. I kind of worked summer jobs. Mostly when he misbehaved. Yeah. And, you know, it was always in the summer. And so it was like 150 degrees and you're in like non-air conditioned space. This was considerably worse. So tick syndicator, which was a pretty popular thing in the lead up to the global financial crisis, had bought this call center in Briargate, Colorado. That's a part of Colorado Springs. Yeah. And I think we have listeners who are in the business, getting in the business, have been around for a long time. The tick structure at that point, though, was relatively popular. Several of them were sort of headed in the wrong direction. Yeah. There was all kinds of moral hazard associated with the structure. I mean, you're syndicating equity with people that in many cases you have no interaction with to do a real estate investment, which have inherent risks. I would submit that the tick syndicator who did this deal really didn't do that well by his investors. And there were 27 of them and they were in Hawaii and, you know, all over the Colorado area and somewhere. They were far flung. But for us to take title to the real estate, we had to get 27 people who had just gotten completely burned on an investment by a guy they'd never spoken to in some cases. It's either across part of the Pacific or at least across the country. We had to get their consents for us to take over the real estate. And, yeah, herding cats is a charitable way of describing that. But, again, phenomenally valuable education, not only in terms of, like, the technical legal elements of what I just described entails, but an object lesson in patience and diligence. And the art of persuasion, which up to that point he had mostly practiced on his mother, me, and a few unsuspecting co-eds. That's good. There you go. It's good practice, though. You're a savvy guy. I think those debates at home must have been a challenge. This is good training. So that coincided with raising the first fund. Now you've been on funds. What was raising that fund like? The decision to go from how you were capitalizing deals before, which we'd love to hear, sort of was that still private capital, high net worth before that, and then making the move into getting the fund? So let me just roll back the tape for one second, because this is a great opportunity to create a link with where we were before. So after we were recapitalizing our portfolio in 1990 or 1991, we lifted, I lifted my head up. I'd say we, but we was a very small group at the time. There might've been 10 of us all told up out of the foxhole to look around. And number one, to think about lessons learned. And number two, to think about how the opportunity set had changed. And with respect to the latter, we were a value-add developer. And when assets are trading for 40, 50, 60 cents on the dollar, and debt is really in short supply, very difficult to develop and make sense of any development project. But there were lots of poor souls who had not had the good fortune that I did of being able to make a deal with the federal government and to find a way to recapitalize their portfolio. And so there was a big opportunity. And frankly, it was all driven by lousy public policy. It was great public policy for opportunistic investors, terrible public policy for stockholders and banks, and terrible public policy for the taxpayer. But there was all this force. The old way, and frankly, it went on for decades. The old way, when you had a credit correction, was to mark everything to market and get it out the door. This was a big one. It created a big opportunity for people like us. So that's what we embarked on. Lessons learned. We had built a group of very loyal high net worth investors. It was, you know, started with, frankly, my dad's doctor and dentist friends and people I met along the way, neighbors, people whose kids went to school with Stephen and his sister. And we bailed them out because we had the opportunity to recapitalize our portfolio. But the truth is that we put them at pretty serious risk. And that was something that I really took seriously. So one of the things I thought about was, you know, how do we avoid doing that in the future? And so what we did was we continued to invest in income producing properties. I think you'd call them today core plus properties, although the return profile of core plus properties was very different. It was very different then than it is now. And when it came to development, we started doing joint ventures with large institutions. So we didn't have to go to accept personal recourse on debt because I guess I should have mentioned, maybe it was obvious, that $100 million or the $85 million that we bought, I was personally signed. I was going to ask, how were you sleeping at that time? I didn't sleep a lot, but maybe for different reasons. I had to get up early to figure out how to beat the odds. And so we started doing these institutional joint ventures on development projects. And then we started, there were lots of inefficiencies in the market. We started looking for inefficiencies. For example, medical office. Back in the mid and late 1980s, and I know people listening will be surprised to hear this who weren't around at the time, but medical office traded 150 or 200 basis points wide of conventional office. And I looked at that and I said, this makes no sense. These are way more strategic, locationally strategic assets. The tenants are, and I say this with all respect, are generally not intermediated by, brokers. They move into a place and they want to stay there forever. Once you invest in the capital improvements, you might have to move a lot. here or there, but you don't have to reimagine the office the way you have to every five years or so reimagine the office. You're recognizing this is why I ended up in the medical office world. I came out of college. He said, you're doing medical office. I said, what? Didn't you guys just sell the Hancock Tower for a billion dollars? He goes, you're doing medical office. He gave you a great gift. I'm glad he did. He did. He did. Anyway, that was obviously a great strategy. We bought the Boston Design Center in the Seaport District just after the Third Harbor Tunnel was put in for $65 a square foot at a 12 cap on existing income. And I could get into all the reasons why that made sense to us. It's amazing to think about that in light of the recent trades of that building and how different those metrics are. So that was 550,000 square feet for $37 million. I won't say anything about that property because James Sons has done an unbelievable job there. But what I would say is that a lot of the brick and beam buildings that for 15 times that amount, they might be worth closer to what we paid for them. Anyway, whatever. You bring up brick and beam buildings. I'll never forget the time that we were touring a brick and beam building down in the Fort Point, the building that Molly, your daughter and I lived in. And we're walking through and John is, for those listening, he's on the Mount Rushmore of Boston real estate. This guy is a legend. I'm young in the business and we're walking down the hall and I say, I love these beams. And I'm leaning against one of them. He says, Tom, that's a column. I'll never forget the difference for the rest of my career. So anyway, look, just to get back to your question, two things. One, we did a lot of syndications with this group that grew progressively to the point where there were hundreds of investors and we took good care of them. I mean, you want to ask me, what's the most important thing I've learned along the way? It is if you take care of your investors and you take care of your lenders, you're going to be just fine. And we did. And, you know, we were fortunate and we found a lot of interesting ways to do that. And we did some, as I said, institutional joint ventures. But what happened was starting around 2003, we were finding it hard to find value in the market. There was just too much money around both debt and equity. And it became very frustrating. And I will tell you, you know, obviously I had a very challenging time in 1990 and 1991 recapitalizing and going through all of that. But the period from 2003 to 2007 was much, much, much tougher because I had always we had always been able to stay one step ahead of the market, find imperfections in the market, and there were none. Everything was priced to perfection. And so starting about 2005, we wanted a very active selling campaign between '05 and '07. Yeah, it worked out well. And when the GFC, when the global financial crisis came, we had a lot of happy investors and they were also liquid and they didn't have a lot of fires to fight. And you had Steven and I trying to get into the business wondering what the hell was going on. Your timing was exquisite. It was in retrospect. So anyway, we had a history of investing in distressed assets and we had investors who were part of that and had benefited from it. And they respected the fact that we were disciplined sellers. And so we had really resisted getting into the fund. Many of the firms that had had the kind of growth we'd had had gone into the fund management business, but it just didn't make any sense in the mid-2000s because, you know, the market was just so overcapitalized. You know, why would you go out and aggregate a bunch of capital when you couldn't find places to invest for the money, you know, you had readily available to you? So when the global financial crisis came, that felt like the right time to take the plunge. And luckily, despite the fact that, you know, there was tremendous disruption and everybody was struggling and everybody was frankly afraid, we were able to have a very strong first closing almost immediately after we published our offering documents on Fund One. We put a $200 million goal on Fund One and we had a, I think, $120 or $140 million first closing within four months. So the PPM dropping. And that gave us the credibility and the momentum, frankly, to exceed our goal. We raised $230 million. And that was the beginning of a significant transformation. Cappy Dommy, who's our head of asset management, who had worked at Spotting and Sly and ultimately at JLL, ran the capital markets group there at JLL. Closest thing that Griff had to a competitor at the time. That was a celebratory day when she went to the principal side. Closest thing, right. She said, you know, I'm coming over here. Because this feels like I'm joining a 33-year-old startup. And that's really what we were. We were a 33-year-old company that was inflecting in a very different direction. And were you going into that time knowing that there was going to be opportunity? You weren't totally sure what asset class it was going to be. But at that point, you had done residential, you had done office. We'd done medical office. We'd done some light industrial. We'd done, obviously, specialty properties like the Boston Design Center. And you were ready for the opportunity as it sort of presented itself. And did that include investing in debt at the time in that fund? Yes. Look, debt was one of the primary areas of focus because there was lots of upside down debt and there were lots of forced sellers of debt. And where we started was, and you know, there are interesting parallels to today. Where we started was in public debt, was in commercial mortgage-backed securities. And the reason was that the public market got to price discovery a lot more quickly than the private markets did. And frankly, there were different forces in place that the public market was faced with. And specifically what I mean is there was a lot of forced liquidation of commercial mortgage-backed securities, mostly because the kind of debt that we were looking at, which was subordinate tranches of these securitizations, had lost their investment grade status. So all of the big mutual funds had to sell them because they had a mandate that they couldn't hold non-investment grade paper. And so I was fortunate enough to meet a young woman who was the CMBS specialist at Putnam Investments, and she had been in the business for a decade. And she said something that I will never forget. She said, you know, you really ought to hire me because they're making me sell everything I want to buy. Pretty interesting. Talk about music. Yeah, seriously. And I only made one mistake. I made two mistakes. One was we only backed up one truck. We should have backed up five trucks. And the other was, you know, I screwed around and I didn't hire. I talked to her first in March. I didn't hire her until July. And so I missed four months. A few important months there. Buying opportunities. And so that fund, you know, that was a $250-ish million fund. Yeah, that was fund one. 2009, did that take you three, four years to deploy that fund? Or did that get out quickly because you were buying the debt? It was about three years. And, you know, the market started correcting like the public securities market corrected very quickly. And, you know, we were out of a lot of those CMBS positions in 18 months. And the types of investors in that first fund, were these institutions or these endowments, pension funds, or was it high net worth? It was primarily high net worth, a few big single family offices, which is ultra high net worth, and a couple of fund of funds. And that was it. I mean, we couldn't get true institutional support. The funds have got bigger and bigger. It's been a great trajectory. You started at 230, then you're in the 400s, 500s, this most recent funds, and you can let us know what the size is or what the cap is. We'd imagine that a lot of those LPs, a lot of those high net worths continued on in the series and rolled into sequential funds. Well, let's even answer the question. So yes, we have enjoyed pretty amazing loyalty from that original group of predominantly high net worth and ultra high net worth investors. So as the fund size grew, the investor base started to diversify. We started to court successfully some institutional investors in fund two, and then fund three and four. And really the path from where we sit today to where we think the fund raising business is going is really through the institutional landscape. And talk about fund five. What's the strategy there? How has that changed? Obviously, the world is changing very quickly here and we're in a dynamic environment, but how has the strategy changed? What are you looking to do with what you've raised? And let our listeners know a little bit about that. Yeah, so it's a great question and I'm going to apologize in advance for falling back into old lawyerly habits. But because we are currently in the middle of a fundraise, I'm not going to talk specifically about what we're doing with fund five, but I can tell you what we as a firm think is attractive. I love it. Yeah. Okay. Even better. Yeah. First of all, for context, and this is something which wouldn't be necessarily obvious to people listening to this podcast. The other thing that's happened in addition to growth of our fund size over the past 14 years is growth of our firm. When I joined in 2009, we were 35 people and we number 120 or so today. So the reason I preface the answer to the question that you just asked that way is we built that company and we built this business as a reflection of where we think the opportunity set really lies. We are back very much in the value add, either repositioning or development game. That's where the heft of that 120 person organization gets levered. And we like the same asset classes that the majority of the capital markets with whom we compete like. We're in residential, we're in industrial and self-storage, and we're in what we've fondly started calling high intellectual capital workplace, which is traditional lab R&D and then the life science space, but also more broadly, space that would serve high-tech manufacturing, artificial intelligence, robotics, battery storage. I think you guys call it tough tech, right? Yeah, tough tech, GNP. We've learned a lot of words the last few years here. Yeah, spin. So that's what we're focused on, the way that we can continue to invest on behalf of our investors and continue to return the type of returns that we've built a track record of doing in spite of all that competition for those asset classes is by getting into some pretty hairy situations. And by hairy, I mean there's typically a lot of complexity that needs to get unpacked at the front end of the investment. The asset needs to either be fundamentally rebuilt or repositioned, or in many cases, it's a ground-up proposition. Or it has a broken capital structure, obviously, at this moment in time. I feel like there will be a lot of that. Yeah. Right. And then we perfect the asset. We create institutional quality cash flows that we then sell into the cash flow-oriented, low-cost-of-capital universe. And so much of what we've done for you on the Numark side, advising you on these dispositions, and we're looking back and people say, oh, we saw that deal a few years ago. Let's tour it just to see. And they're like, oh, man, they did it again. And I think you guys have had a knack for taking sub-institutional assets and perfecting them, like you said, and readying them to feed sort of the institutional machine and say, hey, we'll work on this asset, and we'll get to a point where it's ready for that lower cost of capital, and it's stabilized, and it's cleaned up, and we've done our job. And I think that formula, which you've been using for many, many years, we hear it all the time when we bring assets out for your platform, and people say, oh, man, we looked at this. We should have done that. That's a high compliment. Yeah. And a high compliment. I was about to say, you keep this up, I'm going to take you fundraising with me. There we go. And we need them around. There's some medical office buildings. So one thing that's interesting is the diversity of what you guys have done. You've now done a ton of multifamily development. That's Tom's world. I'll let him talk about it. But you've also, you've been in medical office when it made sense. You've been in self-storage when it made sense. There's been some RV park investments, right? So how do you guys develop these sort of theses around going after these strategies? We hear all the time from Mike Griffin on your acquisitions team constantly. He's working around the brokerage community, just identifying trends in the tenant and demand markets and saying sort of where should we go next and what patterns are developing here. And it's been pretty masterful. But how do you, you know, RV parks, for example. Sure. So I'll field this one and hopefully you can flesh it out if I miss anything. The way that we approach, I mean, by the way, investments like our programmatic joint venture RV, we say that those ideas are born in the lab. We have our more straight down the middle asset classes. And then that's how we got into self-storage. We're doing an affordable housing programmatic joint venture in Texas. And then there's this. And in all of those cases, you start with the top-down thesis. In the case of RVs, this happened in COVID. And by the way, RVs, we're not talking about manufactured homes. We're talking about recreational parks. Including campgrounds and glamping, et cetera. And so we saw two things. One, the formation of significant institutional capital around this space. And the other was that the user preference, and this was something which, like many things, COVID really accelerated, was for these Instagrammable, outdoor, low-cost, easy-to-drive-to recreational outlets. So we found a couple of very sharp partners and made a captive programmatic joint venture. And they went out and found, what, I mean, seven sites now? I think it's nine. Nine, yeah. And these are in Moab, Utah. And we're near Mount Rushmore in South Dakota. We're in Acadia National Park. We're in the Hill Country of Texas, right? So like Niagara Falls, Mount Rushmore. And are these with a specific sponsor? Or are these multiple sponsors in different regions? So the sponsor is our programmatic partner. And we have a single management company that's really operating the assets for us. It's amazing how that market has evolved. You know, you'd never heard of it a few years ago. Jennifer Price from Legacy got married at AutoCamp, you know, over the summer, I think. Yeah, my wife was at one of the glamping. It might have been your site in Moab. She was there last year. So it's everywhere. One of our investors called me up and said, oh, you're buying something in Acadia. I just went to. It's called Under Canvas. Maybe you've heard about them. And paid $1,300 a night for a tent. For a tent. It is amazing. A lot of things like that percolated during COVID, which were really interesting for us as bystanders to watch. And Mike paid you a compliment that a lot of folks look at your exits, your deals, your executions, and there's some envy, there's some aw shucks, we should have done this. But you also have a reputation for being very, very disciplined, right? You're not cowboys. You're not going out doing crazy things. Everything makes sense. You have a famously rigorous investment committee, which is a good thing, right? Talk to us a little bit about your vetting process for a transaction. What are the important things you look for that stick out? You want to talk about our famously rigorous investment problem committee? Oh, I'll let you take that. I know that you don't go into that meeting unprepared. I know that. Not if you want to walk out. I'll say one thing, which is that this was a great education for Stephen because when he first started with the firm, he would sit in these meetings. And what he said to me at the time was, you know, this is great because you see the convergence of all the disciplines in the company and every question has been attacked and you better have the answer to it because they're all going to be asked. And that's a rigorous process. And you can talk more about the process itself. Yeah, I think people are interested in hearing how this works. Sure, sure. So highest level, we take extremely seriously our roles as fiduciaries, right? And so if you think about it, the investment process from deals inception through disposition is really a clearinghouse for our discharge of that responsibility. The investment committee process is a pivotal moment in that kind of arc, right? So we have, this is a reflection of what's happening in the market, but we have an unbelievable pipeline that comes through. The amount of churn of investment opportunities that goes through Mike's group, Mike Griffin and Quinn Reynolds is our chief investment officer. That's staggering. So by the time something first kind of hits the true investment committee itself, it's really been worked through a lot. It was a twinkle in somebody's eye originally, and then they've already had to leg down the answers to many of the open questions about the investment for it, frankly, even to come into the preliminary investment committee room. That's when it gets, I would say, even another cut of refinement through the very pointed, very expansive question and answer session that was just referenced. Yeah. Coming out of that, there's a plan and there's been an approval to spend money on the due diligence that's necessary to really refine this. Sometimes there'll be an intermediate step with investment committee, but ultimately this all culminates in the final investment committee, which is the one which is extremely well-documented and where, you know, you make the go/no-go decision, but you do so in a way that has already had a lot of what would otherwise be the open questions very thoroughly by the time, you know, the trigger gets pulled. Yeah. And we can very validate, you do look at everything. You underwrite everything. Mike, his team, all your acquisitions folks, they are dogs on a bone. Every opportunity, they vet it, they underwrite it, they spend time on it, and they're very candid, whether it's probably going to work or not. But I think Davis has a great reputation for looking at all your deal junkies, so to speak. Yeah. I mean, a snapshot of this, right? The way we think about it. Historically, we've had a commercial property management function at our company, which, and this was started before I joined, but my general understanding is that was really a quality control mechanism. Right. Which made more sense then than it does now. Now there are much better third-party services. We've retained that intentionally because that's an unbelievable source of real asset intelligence. So it's a small piece, but it's a significant one. And on that note of looking at a lot of different things, a lot of different asset classes, we've talked about everything from industrial to life science, to multifamily, to hotel. You know, one of the most interesting products we think that you've worked on recently is in our market, is the Omni hotel, which doesn't seem to, be like any other investment in any of the funds over the course of your history. Tell us a little bit about where that came from, how you thought about that and execution. I mean, talk about execution. That is just a beautiful asset and the city is grateful for it, but talk to us a little bit about where the Omni came from. There are a few people better to answer that than you, so. And just so you know, we'll be there on Friday night for dinner, and then we'll be there on Saturday night for the Boston Winter Ball for the Corey C. Griffin Foundation. We're going to have, I think, 1,800 people. It's capacity crowds. Yeah, well, let's see. Well, it's the only, and you know, that's one of the answers. It's the only hotel ballroom in Boston that can accommodate 1,800 people. It's the largest hotel ballroom in Boston. Well, first of all, you're right. This is an outlier in a certain sense, because it's a hospitality asset, and we did own a couple of much smaller hospitality assets. We had never developed one. I mean, don't you think that a 1,054 room hotel is a good starter asset to practice on? Yes. Let's dip our toe in. Dip your toe in, exactly. It was brought to me by Howard Elkis, one of the two founding partners of Elkisman, Freddie. He had been approached by Richard Taylor, who was the former Secretary of Transportation, an African-American guy who'd been around Boston politics and Boston real estate for a long time. And Richard had a perspective on what was happening and what was not happening. And he said, well, I don't know. I don't know. I don't know. in the Seaport District, you had this enormous amount of public land that was being developed. And there was – had up to that point been zero recognition of the fact that the communities of color in Boston had no involvement. I mean, the involvement was very minor and coincidental. And so the board of the Port Authority decided that when this land was going to be let out competitively, that they were going to try to change that. And that they were going to attribute 25% of the evaluation criteria, the weighting of the evaluation, to the creativity and the breadth and the impact of the diversity program that the developers were proposing. Just for clarification, Massport, which is the owner of the land. Put this development opportunity out through a request for a proposal RFP process for a long-term ground lease. That's what you're describing. Thank you. So that was one of the things that I found very intriguing. First of all, that aligned our real estate interests at finding inefficiencies in the market with our social justice interests in trying to bend the curve, so to speak. And the other thing that was very interesting was that the Convention Center Authority. Had published a study just before this RFP request that showed that the Convention Center was constrained by the fact that there weren't enough hotel rooms in the Seaport District. And the average convention, citywide convention, one that filled all the rooms in the city, was spending between $400,000 and $600,000 just on transportation to move convention attendees from the Convention Center to hotels in the backyard. And that was a very interesting thing. And frankly, in Quincy and in Braintree and on the North Shore. And so, you know, when we get involved with projects, if we do a good job, hopefully we can get our share of the market. But we rarely, by creating a product, expand the market. And so it was very interesting to us as a group. Supply-induced demand. Exactly. Yeah. So that was the second thing. And then the third thing was we'd done a number of projects. We'd done a number of projects in the Seaport District. And we, you know, had a close finger on the pulse of the way the market was evolving. And I'd just say two things about that. Number one, and you continue to see it, we just today heard about a lab project that's being built down across from the Edison plant. We, through our involvement with the Boston Design Center, through our involvement with 88 Black Falcon, you know, we were watching the eastward movement of the Seaport District. So why? Well, the convention center felt like an outpost 10 years ago. It's increasingly coming more towards the center of gravity is moving towards it. And then the other thing is that when you had a convention in Boston, when the convention center was first built, the first thing that those conventioneers wanted to do was get the hell out of the Seaport because there was nothing going on there. And, you know, increasingly the action in Boston, the nightlife in Boston, the there there in Boston is. And so, you know, we believed we drank the convention center authorities Kool-Aid and believed that the convention business in Boston could grow. And fast forward, all these things have fallen into place. We were involved in creating a diversity and inclusion model that became known as the Massport model that is now being broadly adopted, not just in Boston, but nationally. Because. We proved that it could be done, number one. And number two, the convention center is about to expand. And even before they expand in 2003 and 2004, they're going to have their two biggest years of room night demand generation in the history of the convention center and the Omni. Look, we opened the Omni in September of 2021, and that was a very scary time. And with Omicron, it got scarier. Nonetheless, despite the fact that we had. The problem of Omicron into the first through the first quarter of 2022, we finished 22 on budget and we're on track to meet or exceed budget in 23 and 24. So things are happening the way that we hoped. And, you know, in the process, we built a facility that, you know, I think is a great addition to the city and frankly creates or is part of adding significant economic vitality to the city because tourism and meetings and conventions are a huge component. Of what drives the Boston economy. Just a snapshot of how the hotel is doing. Putting aside the rooms, we had our last funds advisory board meeting at the Intercontinental Hotel because even we could not get a meeting room. I love it. There you go. 27 meeting rooms on December 7th, and they couldn't accommodate us. That's a good sign. It's an amazing, amazing asset. We were lucky enough to go through it, Steven and Jason, back in the day when we're still finishing construction and the amount of back of house space, the guts of this building. To serve that convention center in that many rooms is incredible. Yeah, I mean, the employee population is over 700 people. And that was a key piece of the diversity program because we, in collaboration with Best Corp, which is a spinoff of the SEIU Service Employees Union, put a training center in the basement. And Omni, our partners who are one of the leaders in the convention center hotel business in the country, committed to, as they have in other cities, to really using that population base and these jobs as a way to create pathways for professional success and professional growth for new Americans and people from disadvantaged communities. And, you know, something over 60% of our staff is women and people of color at the hotel. Yeah, it's a great example of action. We. We have gotten involved and to write a check, it's important, but to actually be involved in direct relationships with the people that are being helped adds incredible dimensionality to the experience. We agree, but not as many people carve out time the way the Davis family has to make that happen. So we applaud you for that and we know you'll continue to do it. Yeah, the term which was just used, and I think it's the right one, is, you know, it's fun, right? If it's an organization, if it's a mission that you're passionate about, getting involved in meaningful ways, it's gratifying. I'm currently the chair of the board for Heading Home and we just became the largest provider of family homelessness services and housing in the Commonwealth of Massachusetts. To play a role in that is unbelievably gratifying, but to help an organization grow and really see it kind of like prosper through your involvement and the unbelievable dedication, hard work with the people that work there. That's just a much more appealing thing than writing a check. Yeah, and I think it's top down and bottom up. You guys are at the front lines raising money. You're providing your own financial support, but you're also encouraging others to do the same. And in this real estate business, that's contagious and it really works. But then bottom up, I think, you know, Steven, you've mentioned, you see one family move into an apartment and out of a shelter and that will probably change your life. Just seeing that transition happen and these little kids and their parents have some stability, that they didn't have the day before, that's a magical experience to be involved in. So, let's get into some lightning round questions here, and there's nothing, no stumpers. We'd love to ask a few just personal, people want to know who you are, the human being. So, John, we'll start with you. What book are you reading right now? What book would you recommend? What's your go-to? Oh man, oh man, am I going to sound nerdy now? I'm actually reading a book called The Daughters of Yalta. This is about the daughters of Franklin Roosevelt, Averell Harriman, and Winston Churchill, all of whom attended the Yalta Conference in 1944, dividing up the world as the Second World War, actually early 1945, as the Second World War was ending, all of whom went with their fathers and the roles that these three young women played. It's a great story. So, I'm reading a book called City of Dreams by Tyler Onbinder, fascinating tale. This is about how successive waves of immigrants from different parts of the world shaped and really are. It's about the cause of what New York City is today. Really, really, really interesting. Like Newmark, you send around a great holiday letter and a book. This year, I think it was Atlas Obscura, which is, I'm a Jeopardy fan, and I think of myself as a Jeopardy aficionado, help my Rolodex of info a lot. It's really much appreciated. It's like a Jeopardy person's dream. When you finally get the call, you'll be better prepared now. Exactly. I'm getting there. So, what are you doing on a daily basis? You guys have a full schedule. Where are you getting your information? You're investing across all these asset classes. What inputs are you getting in the morning to sort of inform how you're walking into the office that day? Are you reading the paper every morning? What informs the Davis theses as you go about your investing? Let me just say one thing, which is the answer is a lot, and sorting through it is a challenge. I'm sure Steven will talk about the fact that we recently hired a director of research, which is a major addition to our company, but I want to say one thing, which I learned from Bill Gates, actually, who I hadn't considered the fact that- Connection. He and I were on the same career trajectory. Did he know that you guys started your companies the same year? His podcast last week started the same way, I'm sure. Yeah, exactly. I'm sure. But he said, "If you only read the business section, you're missing the most important themes." And so, I think understanding what's going on in the world more broadly is really, really important. You're not going to learn about what's around the corner. By the time it's in the business section of the Boston Globe or the New York Times, it's kind of pretty established. It's commodity information at that point. Yeah. I totally agree with that. I actually take it the opposite direction altogether. Every single morning, I read the Boston Globe. Not because a lot of it is directly relevant to what we do, but that is the best, as far as I've found, resource to understand what's going on in the community in which we operate. Are you a print guy? Are you a print globe? No, no, no. No, this is on my phone at like 4:30 in the morning. And then from there, I specifically don't read anything. I have taken to spending at least 10 minutes with my daughter in the morning before I take off. And then I listen to books on tape or other things that are typical. Yeah. But they're totally not professionally related, so that when I come into the office, I'm now ready for the consumptive, information consumptive part of my day. Are you a CRE Twitter, a retweet guy? I am not. Good. Keep it that way. Save yourself the time. Keep it that way. What is that? It's just the Twitterverse that all these commercial real estate influencers who put their opinion out in the world for consumption- A lot of them will listen to this, and then they'll be mad at us that we said that. My problem is I could never keep it to 280 words. I say keep it that way. Don't get into it. It's a black hole. I mean, you can just scroll and scroll and read all these people's opinions. I should actually qualify what I just said with one, and I'm offering this as genuine advice to your listeners. I do listen to the news sometimes on the Economist app, because they have this guy with a deep, guttural Scottish accent. Yeah. That's a good reader. Yeah. Yeah. And so it's just- Kind of soothing. In addition to being informative, it's really soothing. Yeah. Well, now you're going to listen to Good Dirt, this podcast, on a weekly basis. So we hope it brings you a lot of information. So if you're going to go to one concert tonight, who are you going to see? The Davis family is going to pile in the car. Well, you're going to get a different answer, right? Go ahead, Steven. I'm going to go see Chris Stapleton. I've been on his- Oh, yeah. Good choice. I saw him when he came to MGM, and I'm a big music guy. That's one of the top 1% concerts I've ever seen. The warmth that comes off his stage presence is unbelievable. He's awesome. The Chris Stapleton, Justin Timberlake performance together at the CMAs five years ago, it's one of the best musical performances I've ever seen. Haven't seen that one, but I suspect I know I'm Googling this evening. I will send it to you. I think he played with Stevie Wonder at the Grammys last week, actually, and it was really cool. That was amazing. He's awesome. John, I know that you're a music fan. Yeah. Well, if I could only have one, I would go for two, and I'd figure out how to get Bonnie Raitt and Jackson Browne on the same stage, because as far as I'm concerned, Jackson Browne's the all-time greatest poet in popular music, and Bonnie Raitt is the most soulful singer that I have ever heard. What's interesting about Bonnie Raitt is 80% of the music that she covers is not hers, and she still is one of the most respected musicians in history. But just a quick story about Stevie Wonder. So in 1979, I went to a concert. My now wife, I think it was probably 1978, because we were married in 1979. We weren't married at the time. We went to a concert. Stevie Wonder was the opening act for the Rolling Stones. Stevie Wonder got on around 8 o'clock at night. The Rolling Stones were diverted from Logan Airport to Providence, and apparently Mick Jagger was a little bent out of shape, and some photographer got too close to his face, and he punched him out, and they got hauled off to the station house in Providence. Stevie Wonder played for, I believe, three and a half hours until the Rolling Stones came on at midnight. Kevin White was the mayor at the time. And he extended the operating hours of the MBTA so that everybody could get out of the Boston Garden. We stayed there and listened to Stevie Wonder and the Rolling Stones until 2:30 in the morning. Wow. That was a pretty good concert. That's a great concert story. It's tough to top that. I remember hearing that. And it was basically because they thought there would be riots, too, if they didn't let them go. Yes, exactly. They're like, "This is too big of a crowd. People are too amped up." Right. That's a great music story. Those are great answers. This sounds like a good Quarry Fest headline. Yeah. Stapleton. Steve. Yeah, we can do that. Jackson Brown. Underwritten by the Davis Company. This is perfect. He can hear the solicitation. It's also a softener. And here's the ask. I know that you've met Jackson Brown. Is he as cool a person as we'd think? He's a very modest guy. What I will tell you about him is that—and he's very soft-spoken. And what I can tell you about him—you see, he has a song. It's called "Loading Out," and it's about how when the concert's over, he still wants to play. That's him. I had the privilege of being at a concert, a small concert that he was at, and he stayed until 2:30 in the morning picking out songs. In fact, talking about the next songs that he was writing, and how he was thinking about them, and his favorite songs, and what the inspiration was, and so forth. That's a long way of saying, "Yes, he is as cool as you would imagine." Yeah. That sounds almost like a religious experience. "Loading Out" is obviously such an amazing— It's the best hit. Yeah. And he played it out in real life that night. That's cool. I think that he has a hard time not playing that out, actually. Yeah. Which is great. I mean, listen. We should all—I think we all are passionate about what we do. Yeah. That's a guy who's really passionate about what he does. Right. Well, it's a good choice. By the way, that's 55 years— That's amazing. —into his career. Yeah. He's an incredible guy. You're also two incredible guys, and you've been very, very generous with your time. We're up to an hour and a half almost at this point, so we really appreciate your patience. Yeah. I'm going to be in so much trouble now. I know. I know. We're going to get you in trouble now. We're going to get you out of here. We're going to schedule episode two pretty soon. Yeah. We need you guys back. And I want you to bring Molly. Yeah. Bring Molly and bring Margo. Bring the whole crew. Happy to do it. Yeah. Thank you. Thank you so much for the great questions. It was fun.