Limitless with Chelsea Mandel

Welcome to Limitless, how to crush it in commercial real estate. The show that gives you inside access to how retail real estate's most successful leaders went from being an average Joe Shmoe to the CEO. I'm your host, Aaron Zucker. Hey everyone, before we get started, I wanted to take a quick second to thank the guys at CASCM for making this podcast happen. They brought Limitless from an idea to making it a reality and I can't thank them enough for support along the way. If you're looking to get going on your own content creation journey or need help with your marketing, I'd strongly encourage you to reach out to them at CASCM.com. She's so confident in everything that she does that she isn't afraid to pee in her pants. And just in case you thought you might have misheard that, yes, our guest today absolutely did pee in her pants. That said, confidence coupled with the relentless work ethic and ambitions have led Chelsea Mendel to massive success by anybody's standard. It's not so bad for our first ever guest to join us in their 20s. As a co-founder and managing principal of Ascension, Chelsea has done over $1 billion in sale lease backs and investment sales in just a few years. Because I felt compelled to remind you earlier that in the introduction that she peed in her pants, it's only fair to remind you that Chelsea has done a billion dollars in net lease sales by the time she turned 30. Anybody who knows Chelsea well or has even heard about her can quickly conclude that she's an absolute badass. With that in mind, we can't wait for you to enjoy our conversation right now. Couldn't be anymore excited to have the one and only Chelsea Mendel, who is the co-founder and managing director at Ascension. Chelsea, how are you? I'm doing great. Happy to be here. Yeah, I'm really excited to have you long-awaited hype building up to you being a guest on our show. So thank you so much for joining us. Let's jump right into it. Where'd you grow up? Yeah, I'm from Long Island. The town called Broughton. So I grew up on Long Island. I went to school at Dartmouth, so a New Hampshire and the colds and then I live in New York City. So I really got a boundary far out of my bubble. Before we get into the major nuances of your career, let's go ahead and get something settled out of the way. Does somebody grow up in Long Island or on Long Island? I heard you say on. You're up on Long Island. Okay. Why is it on as opposed to in? Yeah, you know what? I don't know. That's kind of just one of our against colloquial prepositions for people from Long Island. That's just what we say. That's what you can tell if someone's from Long Island or I guess transplanted to Long Island. So it's funny. We bought a property in that area. I'm not going to say that the term yet, not too long ago. And I've told people for the last, I guess, year and a half to years that we bought a property in Long Island. I guess you can tell pretty quickly that I'm not from Long Island. You're not from Long Island, yeah. That's awesome. What was your family dynamic look like growing up? Yeah, really close family. You know, my sister and I have one sister. We're about a year and a half. But everything she did, I wanted to do and, you know, very healthy competition because we're both, I would say super high achievers that were trying to be close parents and, you know, just a really close family dynamic. So it was really nice growing up on Long Island. Just to love that you emphasized on. Just to clarify, you mentioned that you wanted to do everything that she did. I'm going to make the assumption that you were younger. Yeah. So I have a younger sister complex, yeah. Gotcha. You're going to have older than me. Got it. Who's the favorite of the parents? Ooh, I don't know. She's a doctor. She's an ophthalmologist. So I think she's probably the more needed one, but yeah, I've probably had a favorite. Okay. Fair enough. And what did your parents do? So my mom's an accountant. My dad had a trucking business with my grandpa, Ben Brooklyn, and Yankee retired pretty early. They're here that they were operating out of actually got repossessed by Brooklyn and reconverted into the Starwoods like one hotel when we were pretty young. So he retired pretty early, but yeah, my mom still works. She's an accountant. Wow. Wait a second. Did your dad and grandfather own the real estate that was? No. So apparently you can't own. And I didn't know this. And obviously I was like in eighth grade at the time. And wasn't a real estate expert. But apparently you cannot own like the poor authorities land in, I guess, Brooklyn. But no, they were leasing it. They had a warehouse that they ran their trucking business out of. And then I guess they reconverted that whole area into the what's called like Brooklyn Bridge Park or something like that on Pier One. Gotcha. How are you as a student? I was a best student. Yeah. Better than your sister. Oh, I don't know. We're both very similar. I mean, yeah, I think she got like 10 points higher on her estate. Hey, then I did. So she's probably a little bit smarter. But yeah, we were both being at top of our class all throughout high school and Dartmouth as well. So we're pretty nerdy. Yeah, students. Yeah. So we went ahead and jumped to the point. I guess anybody who says they got a Dartmouth, you can make the assumption that they're smart and that they achieved in school. What else did you do outside of school with any remaining time that you had when you weren't studying? Yeah. I mean, college, I was really, so I had a number of extra curriculars that I was really passionate about. So I ran the programming board, which first, well, I asked people who went to Dartmouth, probably think like programming, like developer or computer science. But now we were the programming board put on all the events and like concerts for the student body. So I brought a ton of really cool artists to school. We had Aesthet Brocky. We had a VT, Preston Peeces. We had Shaggy and Loopbite, the Ask A Weed and a Number, a really cool artist. And so I put on all the big concerts for the school as a ton of fun. And I was one of the founding members of the Dartmouth Poker Society. That was also a lot of fun. I played poker pretty much every day in school, starting when I was a sophomore when we started at the club. So we would have like our little group of underground poker players in like the dorm rooms of the freshman building. So that was a lot of fun too. Wow. So the generate gambling and throwing a great party. That sounds like a pretty much something up. That sounds like a perfect fact to becoming a real estate broker. It may all make sense now. Yeah, it all comes together. Look, Dartmouth does not take people who aren't well rounded. You had to have got, and I can't imagine you had a poker society in seventh grade, or maybe you did in the five minutes. Yeah. We've been talking to you so far. I wouldn't shock me. What made you get into Dartmouth other than your outstanding testing. What are your scores in your academics? Yeah. I mean, it was pretty well rounded. Like I always worked. So growing up, you know, throughout all of high school pretty much, I worked at a kosher Delhi in Roslyn called Ben's kosher Delhi. And the owner of Ben's actually wrote my college admittance, a remissions essay about my work. I would go to school. And then like even before I could drive, my parents would drop me off of the Delhi and I would work like four to nine p.m. shifts as a hostess. And I really loved it. I mean, I just loved, you know, being able to, you know, as a young person who couldn't even drive like being able to make my own money. And I literally got paid seven, twenty five an hour. That was minimum wage at the time. And yeah, it was just great. It was like my own thing that I could do in control and, you know, have some money that I could, you know, go to the Roosevelt field mall and go buy some shirts and whatnot. There you go. I have a couple of important questions to unpack that with. Number one, was strom your corn beef? I don't eat either. I would get turkey. I don't eat red meat. So I was not the best, then, you know, what you plan, I guess. But yeah, I would get turkey sandwiches with a roasted red pepper. And it was kosher. So obviously no cheese, but Russian dressing on the side. There you go. And I guess it all makes sense now that you ended up as a hostess and not a waiter or waitress because if I was sitting down at the Jewish Delhi and I was asking what to get and the waitress wasn't able to give me guidance, I'd be a little bit thrown off. Yeah, you'd be put off. And how does it feel to take a step back in salary from seven dollars and twenty five cents now or down to zero? That's funny. Yeah, very similar, I guess. But no, I think at the end of the day, what always motivated me was, you know, obviously not then, but in brokerage, being able to just have unlimited upstein. And for me, that is much more worth it than having a protected downside as well. Yeah, which we will definitely get into and want to unpack that. But listen, you say a Jewish Delhi, like my eyes get massive. So I only have to dig into one more important question, yellow or brown mustard. Oh, yellow or brown mustard. I don't even know if we had a choice, we only had one mustard. It was called Delhi mustard. I don't know. It was kind of like a yellowy brown. The trick question has been answered. The authenticity has been verified at the real McCoy, or I guess, you know, from the views McCoy, but the real deal Jewish Delhi and New York, that's amazing. Yes. Okay. So you are overachieving beyond belief. You get into Dartmouth and what did you decide to study? Because I know that you've got other than playing poker and throwing ragers on campus. Yeah. So my first two years, I was actually pre-med. So I was a bio major, I think. I don't even remember, but I was a pre-med. So I did like shadowing and, you know, other kind of extra curriculars. I had Dartmouth pitchcock, which was the big hospital over there. And so I think the first couple of doctors I shadowed, one of them was, I think a dermatologist. The other was an ER doctor. And this is when I realized very quickly that I would be a terrible doctor because I'm not scared of blood. I'm scared of like bodily things. So like we had a pregnant woman come in to the ER. I can't remember what she had or what she was complaining about, but she had something. And the doctor, like literally all he did was like touch her like lower stomach and I literally can't stop. And the doctor was like, what just happened? I remember. I can't remember, but he had a long, like, gray ponytail. He basically picked me up, gave me orange juice and put me in like one of the hospital beds until I like recovered from the trauma that was seeing somebody touch somebody's like lower stomach. And yeah, very quickly thereafter, I figured out I get what's called like, vasovagal responses to like bodily things. And so very quickly, I would be a really bad doctor. And so my junior year, I switched to an econ major and that's when I decided I wanted to go into business or finance. Got it. Listen, I don't think there was any. shortage of capability there from a mental standpoint as far as how intelligent you were, but if the doctor falls over every time that he or she sees something. Yeah, just what it were. Yeah. Okay, so you go into econ. What happens next? Because obviously there's got to be some sort of connection of how we get from general business econ to what you're up to today. So what, how did you? Yeah. Well, so just to be clear, like Dartmouth's a liberal arts school. So most people who end up in finance, you know, private equity, banking, real estate, really anything, if they went to Dartmouth, they probably studied econ because there's no other, I mean, we math, but yeah, that's pretty much like the subject that you would study to get into like finance or business. So, you know, I studied econ. I did a couple of internships. So I did. So Dartmouth at the time, I don't know what it is right now, but we had like winter, junior, year off. It's a trimester system. And so we had what was called a wind turn ship. And so I wind turned Morgan Stanley and thought I wanted to be a trader. So I was sitting on the trading desk. It was on the municipal bond desk and I was winking up. I was in the city in New York. I was winking up at like 4 a.m. getting in at 5 a.m. leaving at like 5 p.m. And it was always pitch black. Like in the morning, it was pitch black. I would get home. It was pitch black. I never saw the sun and I was working in Times Square where Morgan Stanley is. And so it was always bright. It was like this pseudo light. There was no natural lighting and it just made me depressed. And I think I had seasonal affect disorder or something, but it was fine. I got through it. And I did another internship that like following summer, junior summer, and it was also when Morgan Stanley trading desk, I really kind of desperately wanted to be a trader. And so I was in the, it's called like SPG or structured products or something. It was like CLOs and CNBS security. Yeah, I just like, you know, I think it was then when I realized I didn't really want to be in such a not a fast peace environment. It was more just like you were glued to your desk. Like you couldn't really do things on your own time. You know, obviously you're working like market hours. And I think I figured out that like I wanted to be in something that was a little bit more like digital centric or project oriented instead of just like immediate one after the other chance actions where you kind of just have to be like on all day and then you're off. And that was like a little bit more long term, you know, in terms of duration. And so yeah, I mean, I did, I think unofficial like corporate recruiting. My boyfriend at the time actually was working in real estate private equity. And you know, that kind of rubbed off on me a little bit. And so Starwood Capital Group was doing like unofficial recruiting at Dartmouth that owner's son, so very stern like his son went to Dartmouth and was actually my year. So I had like known about Starwood a little bit. And yeah, it was just like super prestigious and you know, they only hired like Wharton under grads and they were all like expert modeling. And because it was so prestigious, I just like desperately wanted to work there. And I knew that they had like, because like three or four spots for the analyst program. And so I interviewed first with actually I think it was another jar with the alumni who was like the chief talent officer like people like HR kind of role. And yeah, I ended up like going to a breakfast in the city that Starwood was hosting. And that a couple people on the other positions team. And I got an offer and I was like, this is crazy. Like they're so prestigious. All the other group analysts that got offers were at Warren. And yeah, that was the first job I had out of college. And so it was in Greenwich, Connecticut because at the time they didn't have their like fancy New York or Miami offices. So I moved to Greenwich, you know, as a pretty young single person with friends all in the city. And I worked there. I did the analyst program for about two years. And yeah, it was in the acquisition team. I was the only female in like a 50 person team. So that was a lot of fun, but had a really great training program learned a time. And that was really just how we got into real estate through that investment focus at Starwood. Talk to us about being the only woman on a team with 50. Yeah, well, not only being the only woman, I was like one of the younger people because I was an analyst. I mean, it was tough. You know, I'm not going to say it was easy. It was definitely tough, you know, I think such a grueling like intensive rigorous environment to begin with, then kind of compounded with not really having any female mentors or, you know, just like colleagues. I think it was tough to just like talk to people. And if you're feeling like stressed out, you know, I was very cognizant of not being perceived as weak. And so I probably over compensated to some extent where, you know, I was like very not weak, but it was great. You know, I did make a lot of friends in my class, you know, they were all men, but they were great. And yeah, I mean, I learned a lot. You know, I got to go on some really cool trips to about properties and cool places. I remember the first meeting I had where I traveled. I went with one of the associates to Austin and we were actually looking at buying a reate. And we were taking out the CEO of the reate. And I'm like not a big drinker. Like I really just don't like the taste of alcohol and I'm really like alcohol really at all. But this was like my first like professional like business meeting and I was there with the associate. Like I said, I was young. I was probably a couple months into my job. And this is my first business trip. And we're sitting at the bar with the CEO and the bartender comes over to take our order. And I didn't want to be the first one to order because I didn't like know it was appropriate. I didn't know if I was supposed to order an alcohol or, you know, like a stout or something. And the CEO says like, oh, I'll take the lady first. And so I freak out and I order. Well, I'm not an AC. Literally the first thing that I could think of and it was like the only thing that I could think of. And then the associate and the CEO. And this was like a southern man from Texas. You know, he was like, wow, little lady. He couldn't believe what I just said. And it came and I had to like pretend like I was this hard. Who could just like easily sip on a long island. I see some like sitting there like nursing this drink and like just it was so funny. You know, I told my sister and my family that story and I got so much shit for like years that anytime I'd be out, I would order like a long island. I see it on like literally the one who pretty much just like does not drink. So that was a funny story. I don't know how many episodes you've listened to or whatnot, but we typically ask guests what their most embarrassing story is. That one's decent. We might come back to all my missing embarrassing story, but that is a good story. Do tell. There's no bylaws to follow. Well, I won't give you the whole story, but let you say when I was in first grade in Miss Young's class, like I said, I was a very good student and we used to do you know, popcorn reading or like you go across the room and like you read aloud and then the teacher like calls and are you calling someone else? I don't know. It was called popcorn reading and we had a book called Garden Gates. And anybody who went to Roslyn's, you know, elementary school is called Herbert Hill. We remember this book. It was for the gifted students. We got to read Garden Gates while the non gifted students, I guess, got a different book to read. And I was like, I don't know how old are you in first grade like six or seven. But I was really excited to be doing popcorn reading because I really loved like reading. I was a good reader. And do you remember the chairs that are like, you should find like an image and like put it up on the podcast, but they're like these really uncomfortable chairs that are kind of like swirly and then they have these like metal things that kind of like electrocute you like a little bit and they're like small. They're like, be sure chairs for like little, you know, small like kids. And so I was sitting in one of those chairs and I was like really excited to do popcorn reading, but I had to go to the bathroom. I had to pee. And I didn't want to miss out on my turn. And I remember one of the boys was reading and like I think the kids called on each other. So I thought he was going to call on me because he was like a boy that I was friends with. They're like, how to crush on or something. But I really had to go to the bathroom, but I didn't want to miss out. And so I ended up getting called on. And so I'm like, really excited to read and I started reading, but I still really had to pee. I ended up peeing in my pants in the chair. And then because I thought I was like so slick and like nobody was noticed and I'm still reading a lot. I call on someone else and I don't get up because I knew like my pants, you know, would be obvious that I like pee to my pants would be so cute. So I take the chair with me and I'm like carrying it like from under me to the bathroom. And at the time you had bathrooms in your classroom. So it was like, wasn't that far? I remember I'm like glued to the chair. It's like this tiny little chair and this tiny little person. And I'm just wagging to the bathroom and a chair in the chair that I peed on. And yeah, that was probably my most embarrassing. Because I remember it to this day like very vividly. So yeah, that's a funny one for you. Oh gosh. Not very often on this show where I don't have an immediate follow up question or an elaborate response to like point out the learning lesson for us. Yeah, there was no learning. I guess it was a learning in ego like just to make you pee to your pants. Don't get up and walk your chair. And then I probably made it worse. Oh my god, how much cheeks are like hurting. So funny. We've had at the time of this recording. The time of this recording. We've had close to let's call it 30 guess. That is definitely the funniest story. And we've had some good ones. I mean, Scott Bittany told a story about how he showed up to a showing with a shirt off because he was sweating so profusely in his car. We've had people call target on a site when targets directly across the street and the target person's like, why are you calling me on the cross the street? I mean, you want to like a real estate related embarrassing story. I mean, this is great. If you have a real estate one that's even close to this, just keep going. We're totally off script now, but this is the only way this show works. I'm storied out. I don't have any other funny real estate stories. I have to think of one but not at the time I had. On behalf of everybody who hears this, I want to genuinely thank you from the bottom of my heart for sharing the story about where you peed your pants on a chair in first grade because for those of you out there that are scared to make that cold call or maybe even reach out to someone prestigious in our industry like Chelsea, it can't be that bad. The confidence I've six year old me. Yeah. - You'll be okay. - There you go. Apparently we're supposed to talk about real estate at some point, but we did, and I gotta get my life back together here, man, so this is too good. All right, so to recap, your Ed star would, you're the only female out of 50, you thankfully did not pee in your pants there, we hope. And you have a good time going there. You're in Greenwich, though, which I got imagined as you alluded to before, it's pretty difficult for someone who's like 23-ish. - Yeah. - And single, what happens next and tell us, a little bit more about your real estate story? - So yeah, I mean, basically, you know, at the time, it wasn't like official recruiting, or I think it was getting towards the end of my analyst program, but I wanted to move to the city, all my friends were in New York, living in Greenwich, it wasn't far, but it was just like, you come into the city, you have to have plans where you're gonna sleep, and like, had your Saturday and your Sunday, like it was just a lot of planning, and I really just didn't want to do it anymore. And I just kind of wanted to do something a little bit different. The analyst program was like very regimented. It was like, you either become, I think like a 30 or like a first year associate, or you like get fired. And I think I was probably also like hedging myself that I don't want to get fired, so like I'm just gonna do some rals. But basically at the time, there was a Dartmouth alum who was working at a private equity firm in New York, just like non-real estate, just like a middle market private equity firm called New Mountain Capital, and New Mountain had just hired a portfolio manager to actually launch a Sallie Spatch Strategy, which was the firm's first real estate strategy. So yeah, basically I got a call from another Dartmouth alumni who was a couple years older than me, who was working at New Mountain Capital at the time, who was saying that they just started a real estate strategy. It was like Sallie Spatch oriented. I didn't know what that was. I had very much like a traditional real estate investing background. I didn't know what a Sallie Spatch was, or what Netly spent. And he said he wanted, they were trying to hire someone from like either Starwood or Blackstone, 'cause they had really good training programs, and like an analyst. So I was interested. I was like, that sounds really cool. It sounds very entrepreneurial. I'd be the first tire, like to that fund. And they made it sound like you'd have a lot of outside and really just get to see something grow, which was really exciting to me. And it would be in the city. So I came in and I interviewed with the portfolio manager, and a couple of different people at the firm, and it was really exciting. They were building a totally new strategy in Sallie Spatch. They learned what a Sallie Spatch was. It was kind of like a hybrid between real estate investing, like I was doing at Starwood and like private equity, and just like credit oriented product, that a lot of my friends were doing in private equity, and mostly banking at the time, and like credit funds and hedge funds. And so I thought it was really cool. And so I ended up getting that offer, and I moved to the city, and I was the first hire at New Mowneons, Netly Sallie Spatch Fund. And so I worked with Teddy Kaplan. He was a portfolio manager. He had been a PM at Angela Gordon, like before that. He was instrumental in that strategy, and yeah, the firm, you know, he mounted with building a Sallie Spatch strategy around him. We were going to go out and fundraise, and do Sallie Spatch with other middle market sponsored businesses through this investment fund. And so we did, we raised about half a billion dollars in the first fund for a while. It was just the two of us for like the first, you know, six months or so, then we hired a GP, then we hired another associate, and we were growing, and during a ton of deals, mostly industrial, and yeah, it was really great, super entrepreneurial. You know, I was at most of the fundraising meetings in the beginning, like meeting with pretty big pension funds, and sovereign funds, and just other really interesting LPs, and doing deals at the same time, and like worked on our marketing materials and pitch decks, and kind of doing a little bit of everything. So it was very much like an entrepreneurial environment, and it was really exciting. - Okay, so unbelievable transition from Starwood, and it just goes to show the power of the work that you put in, starting, let's call it like 14 years old, right? You're freshman year in high school, to where you're achieving throughout a four year career that gives you the right in the opportunity to go to Dartmouth. And then because you're at Dartmouth, you have the opportunity because you thrive there to have the opportunity to go to a place like Starwood. For whatever reason, I guess they just didn't feel like they were good enough to go after students like me at the University of Alabama. I believe in report card diversification, where you start at A's and work your way down to F's in high school and just kind of spread your grades accordingly. So the work to get an opportunity like the one at New Mountain really started years and years and years before, because that half that you took was all set up based on your prior experience at the place. And so what I would say to that is, even if you had an unconventional background, and you didn't have the pedigree of someone like Chelsea, the point is is even if you're 22, 23, 24, or even did something else in your 44 and you're lost in five years into the business, what you do in step one can lead to a great step too and so forth. And it afforded you an opportunity. How old were you and you got off with the gig at New Mountain? I mean, it couldn't have been more than 25, right? - Yeah, it was 25. - Okay, I could easily sit around with you over your turkey. I eat red meat, I'm going to Prostrami at the Delhi and go through and spitball. I will tell you if there's, you do go a little fast for some of our listeners that may not know like what a sale lease back is and what LPs are and PMs. So why don't you paint broad strokes a little bit on high level what your role was at New Mountain and like some of the basic things that you were doing to people who may not have as much of an in-depth real estate background as us. - Yeah, yeah, that's a great point. So on the investment side, basically what we were doing is we were buying these sale lease back opportunities. Essentially we were buying buildings and simultaneously leasing them to operating companies that most of the time were middle market. I would say like sub-hundred million in EBITDA businesses that were owned by private equity firms so essentially buy out investors if you will. And we were structuring those transactions, mostly working through like brokers and advisors, some direct deals where we just had relationships with the sponsors and yeah, we were buying. So I was on the investment side then obviously I'm on the advisory side now, but we were buying these opportunities and so we owned the property subject to those pretty long term leases. Most of them were like 15 to 20 year deals, annual rent desk leaders, so we were getting that increase in cash flow. And then at the time, I'm not sure how they're set up now, but at the time we were pretty much putting mortgage level debt on each of those assets. So getting a low and for those properties in order to generate a levered return. So we were buying these deals when this was like 2016 or so. So at the time we were buying deals somewhere in like the eights from a capric standpoint, putting some tenure fix free, CMU water so on the deals with some positive leverage and generating like a 12 to 13% cash on cash return for the fund. - Sure, so basically to summarize it, you went into an acquisitions role for a principal and that focused exclusively on buying real estate from business owners that were essentially looking to, why don't you tell our audience, 'cause I don't want to jump to conclusions. Obviously there's an understanding of selling spec structures, but why would a business want to sell their real estate to someone like New Mountain when you were there in you? - Yeah, so I mean these businesses again, they're typically sponsors. So they're private equity ownership, where the private equity investors are looking to generate a return. Typically the ownership of real estate is like not really with the their mandate or doesn't really meet their investment returns. And so a lot of it is they just have a higher and better use of their capital than being tied up in property. If they could take the proceeds and pay down expensive debt or even like take a dividend or fund an ad on, find new equipment, whatever it is, they just have a better use for those proceeds. For the company's standpoint, it's pretty much the same. A lot of the time it depends on the asset class, but they could be using the proceeds to fund like a cat-backed program that'll be ROI positive for the company or say it's like a restaurant business, maybe they're expanding their footprint and adding opening a new location. So there's a whole variety of different uses of proceeds. For the private equity firm, there's also like an arbitrage to it. So if you're a private equity firm and you're buying a company, you're paying based on an EBITDA multiple basis. So say you're buying an automotive manufacturing company at like, I don't know, seven times EBITDA. If we're then doing a sale East Bank at like an eight percent cap rate, a cap rate is just an inverse of a multiple. So that's like a 12 and a half times multiple, one divided by eight percent. So it's effectively for the private equity firm, they're paying whatever I said seven times for the business. They can flip out a non-corassette, aka the real estate of the company, 12 and a half times, they're creating some positive arbitrage, which ultimately is equity value for the sponsor. And so that's really the financial arbitrage that underlies these sale East Bank structures. - So you did a wonderful job of explaining why business would sell the real estate. Then your company at the time, New Mountain comes in, takes out CNBS debt or similar debt. - Yeah. - At a substantially lower interest rate than what the cap rate is. You alluded to this before, which allowed you guys to obtain what's called positive leverage, meaning that the cap rate was lesser than what the cash on cash returns would be based on what New Mountain or a similar group that was buying that product type would get. They were there for looking at and you alluded to it before, just to summarize double digits. So 10, 12, 14% cash on cash returns, which as a real estate investor is interesting, right? Because not only are you getting good cash on cash returns, but you're able to get part of the reason why you're able to obtain such great debt is because you're walking in to the lender, whoever that may be, and saying, "Here's a 10, 15, 20 year lease with a great company with a good operating history." And you guys were trying to accumulate as many of those assets as possible, fairly said. - Yeah, and like for us, the big piece of the cash on cash component as an investor in the East Valley Sparks was, you know, in like, I don't know, seven years, you're making back almost like 100% of your equity in cash returns. So then the actual asset fail is pretty much like upside. Correct, and that's assuming that the real estate, even if the real estate doesn't appreciate and value, which historically speaking, it does so more often than not. Yeah. You guys were looking at being in it with a little to no risk, assuming that the tenant makes it for that certain amount of time. Right, which is why it's really credit oriented. Like you need a, your underwriting is mostly underwriting the credit because you're making this, you know, 15, 20 year gamble that this company is going to be around and being able to pay you rent. Exactly. Very well said. And glad that we were sort of able to get our listener base up to speak because it's real estate driven, but, you know, for every investment sales broker that we have that's focused on sale lease backs listening, there might be a retailer out there who's trying to understand the game. And so breaking it down like that was really helpful and we certainly appreciate it. Yeah. So you go to new mountain, you're acquiring sale lease back deals. How does it go? What happens next? Yeah, no, it went really great. Like I said, I was there for about like two and a half years. We raised a half a billion dollar fund. I think we did during my time there are probably about half a billion dollars of acquisitions. At the time, we were focused only on industrial pretty much. So a lot of manufacturing, distribution, you know, storage type of facilities and businesses. And then yeah, about, I think it was two and a half years, maybe three years, I don't know. You know, I was pretty aggressively poached by, you know, some brokers in the space who were kind of seeing what I was doing on the investment side and liked the kind of private equity background that I had and convinced me that comes to the dark side. If you will, you know, your upside is unlimited. You can eat what you kill, the harder you work, the more, you know, money you'll make and the fear you'll be and, you know, that kind of story. And so for me, it was kind of crazy at the time. I had a really good Qishbee private equity job, grape benefit. I had pulp insurance, which, you know, you take for granted. But, you know, I kind of said, you know, the sounds interesting. It sounds like what they're saying could be a lot of fun. And, you know, like I said, I'm a poker player. I like to make calculated risks or take calculated risks, especially when I'm kind of the control, you know, variable that I could really impact. And so I said, I'm going to do this for like a year. See how it goes if it is terrible. I have my resume and, you know, my experience of all that I've gone and I could just go into another investment role. And if it's great, then that's awesome and that's fun. And I'll make it 10 to money and I'll have a fun time doing it and the world will be great. So I joined a firm, you know, specializing in sale East back in at least brokerage. And yeah, I mean, pretty quickly, I realized like this is the side I want to be on. I get to work with really cool businesses. I get to work with awesome private equity professionals. And I can set up these sale East back transactions, not just beyond the receiving end of them. I can actually structure them, execute, make sure they close, work with the client on a recurring kind of basis, help them figure out their corporate real estate strategy, you know, it's kind of fun. And you get to work with all these really cool types of businesses from sausage, many factors and deep jerky, many factors to, you know, industrial equipment suppliers and outdoor storage and tank wash facilities. You know, it was really seeing like a pretty diversified set of businesses and asset types and locations. And it was a ton of fun. So I was there for about, you know, another three years. I did just around like $900 million in sale East back, which was like pretty crazy for someone who had never been in brokerage before. And that's when I said, you know, this is great. And I've learned a ton and I feel like I could do this and scale this the way I want to scale it if I go out on my own. And so that was kind of what started the the thoughts of, you know, I should go out and build my business and I could scale and grow the company and build the branding and the marketing pipeline and all these like great staff that's like more in the operational and organizational side of the brokerage business. But do it the way that I want to do it and be able to work with the clients that I want to work with. And that was kind of what prompted, you know, essentially a lot to digest there and nothing but the best ways possible. So when you go into brokerage, when you leave New Mountain, go into brokerage, I appreciate you saying that that was kind of a lot for somebody in brokerage to do 900 million in three and a half years or whatever it was. That's a lot. That's a behemoth. Yeah. How were you able to do that? Obviously your experience gave you pedigree. But that didn't necessarily mean that you walked in with a bunch of clients day one. Like how were you able to source that kind of business to do that sort of volume? Yeah. No, it's a great question. I would say I definitely took advantage of the Dartmouth Hill on that network. We had a huge alumni network and private equity and banking and, you know, I certainly leveraged that to build my network of people that, you know, I could call on that I felt like I had a little bit of a leg up over, you know, potential editors. There's definitely a lot of that also coming from private equity and being out of private equity firm and being on the investment side and having a credit, you know, underwriting lens definitely helps me still, you know, relate to clients and understand what private equity firms are after and what's motivating, you know, they're incentive to wanting to structure these types of deals. Anything having that relate ability, being able to put myself in their shoes, it definitely helps me gain the trust of my clients. And so I was able to, you know, to use that to really build meaningful relationships in the space that I never look at it on the deal. I'm always looking at it as the relationship. You know, I'm saying what is this potential relationship for the long term? So my goal is to not do one massive deal with a party. It's to do all of the corporate real estate and sales tax solutions for the client over a long period of time. And that's what I think about building my business. And, you know, I've been pretty lucky in being able to find those meaningful relationships where I can really bring a ton of value to the client. Makes sense. So a lot of that $900 million was repeat business, fair to assume. Yeah, I would say repeat private equity business over the course of a couple of years. Got it. Talk to us about the transition away from the brokerage company that you were with to your launch of Ascension and how did that all go down? Yeah, so nothing but great things for the folks that you've got a partner. I'm an entrepreneurial spirit. I wanted to build something that felt like mine. I could do it my way and bringing the people that I want to work with and be able to scale it the way I wanted to scale it. So it was obviously leaving a company and starting something you was always going to be challenging. There's always going to be, when I feel bad all the client and, you know, a lot of not fun parts on the operations side, compliance, legal, all the stuff. But being able to get that kind of squared away while building, you know, my baby building essentially, I would say it was hard, you know, not going to lie and say this was super easy. And it's been a super easy year. It was a big challenge. And that has, you know, a higher attorneys that I never had to do before, you know, and just really do things the right way and make sure we were set up and on a clean slate with a clean break was definitely a challenge. And part of the biggest concern for me was like, if I leave our people going to know where to find me, are they going to want to work with me? Are they going to, you know, are people that I've worked with in the past going to want to come over to me? Because, you know, you obviously can't solicit you of all these, you know, restrictions. That was hard, you know, so I posted a big announcement on LinkedIn when I was doing, you know, I sent out last emails of, you know, where to find me and kind of just cross my fingers and hope that people that wanted to work with me would find me and want to work with me again. So it was hard. I'm sure happened to know the guys that stream. They are great people. I appreciate what you were saying before and it says a lot about you that you're complimentary of them. And I can also relate to like the things that you, when you start your own business, there's just certain things that like you just take for granted like, oh, who's going to build the website? Somebody will take care of that. Oh, yeah, wait, that's me until further notice and everything from setting up an email domain and then the complicated stuff like getting attorneys involved to understand, you know, what you can and can't do and trademarking and getting branding and logo and fielding costs and hiring your team like finding office space like I had to find, you know, our lease in New York and hire, you know, our analysts and closers and my assistant. It's a lot and you don't realize like you said, you say for granted because you have people doing this stuff, but when you're building your own company, you don't have people doing this stuff, you're doing this stuff. Right. Right. Well, and perhaps you got a little bit of help from a partner at some point and talk to us a little bit about what happened there. Yeah. So the origins of a extension, you know, so I partnered with Mike James of James Capital Advisors and really the benefit there, you know, from my standpoint at the beginning was, you know, they had this great platform. They have the infrastructure of the bones, compliance, payroll, you know, really like a back office to combine with my deal experience and my really running like the core, you know, operating business of the brokerage firm and the advisory services to really get us off the ground quicker. So we were able to leverage, you know, all the services that they already kind of had through James Capital Advisors through their net lease and also, you know, at the time, their multi-family business and definitely allowed me to focus on building the relationships with clients, building our position in the market, doing deals. Obviously, closing transactions are really building the track record while the services from GCA were really building like the backbone of our infrastructure, our to stack, our compliance and branding and marketing and, you know, all the kind of more operational and organizational functions of the company. What that sounds like it's been a hell of a partnership for you so far. Yeah. Yeah. It's been a lot of fun. I mean, obviously, you know, you have us in New York, you have the JCA folks in LA, you have another team in Phoenix and just getting everybody integrated on the same page and sharing in the same vision, you know, with a lot of people that I've been doing something before. You need to get everybody on board and make sure we're all kind of steering the same direction. So you mentioned three offices, obviously in New York, LA, in Phoenix. What does the makeup of the team like high level? How many brokers are there support staff? What does that look like? Yeah. So think we're about 60 today about half of that, you know, on the advisory side and then have being more functional staff and support. Gotcha. Is this what you always wanted? Maybe not necessarily being an advisory or brokerage role, but did you always want to be an entrepreneur? What was there not be a when you got into real state of originally at Starwood and how did that evolve over time? Yeah, I mean, I would definitely say I always had that entrepreneurial itch and I always wanted to be my own boss even from like a young age. I kind of just wanted to do things my way with my flavor, with my touch and also had a hard time with authority, biggers and just wanted to be able to accept my own path. And so yeah, I would say I always envisioned in what fields, whether it's going to be a dermatologist from like 18 year old me or now obviously owning a real state advisory business, but I think being able to pave the way in the way that I want to do it with something that's mine, that's what's really my BB and we could do it the way that I envisioned building it. The most fun for me is like building something, right? Like having a team who all has a same vision and we're all just building something together and then we could look at that and say yeah, we build one thing, whatever thing maybe. So yeah, I would say this is always in the cars. Love that. Talk to me about mentors. Who are they? What have they done for you? Yeah, I would say my biggest mentor, honestly, are more unconventional. It's more, you know, my family and just my friends. I would say unfortunately professionally, I never really should eat at the best like more formal professional mentors, but I have a super solid family from my parents to my husbands, my sister, to my best friends that they are my source of support, whether they understand functionally, what I do in real estate and tell these facts that, you know, remains to be figured out, but from a support, you know, from emotional and mental standpoint, they've always really grounded me and propelled me forward and, you know, employing after my dreams. So I would say my family and friends have really been my mentors. Aside from struggling with authority, which you alluded to a few minutes ago, yeah, what other weaknesses do you have and how do you navigate them? I think like sometimes it's like prioritization, you know, I think from the standpoint of like what I actually do at my functional job is like I serve clients and I could definitely serve my clients all day long and totally forget that, you know, I have to like eat or go to the bathroom or take care, you know, my. You are known to forget going to the bathroom. That is a real thing. So I think, you know, that's something that I'm always working on is like, yes, I have my clients and I need to service my clients and I need to close our deals and whatnot, but I also have my team and my staff and I need to make sure everyone, you know, who supports our business is happy, is doing a great job, is, you know, where they want to be and sees a path forward with the company. So I think there's just the balance of like the core operating company and the services we provide to our clients and then the internal structure of the organization and really being able to balance and manage that. Sure. Previous deal you've ever worked on. Oh, that's a good question. How yeah it is with those sales specs. Craziest deal. I mean, we've done so many deals that I would say are pretty crazy in terms of like the value that they have unlocked for our clients. Like some of my favorite ones is we work at the gas station operator. It's out there at a called Trinity Petro and so to date, we've closed over like $90 million in sales specs for them and they own 17 gas stations and see, it's crazy. It's just, it's so crazy how valuable the sales specs strategy has been for them because they funded all of the stations, all of the real estate, all the cat facts, all the inventory with sales spec proceeds. And to me that like makes me feel on top of the world. So I'm like, I literally, you know, our structure funded your entire company's growth and to be a part of that growth story has been so tremendously exciting. Now they're one of like the biggest, you know, in South Florida and they're getting into their job worship. And it's just incredible to see like what the sales specs strategy has been able to contribute to their growth plans. And yeah, it's been a ton of fun to be able to be, you know, I'm part of that. That's amazing. What's the biggest curveball that you've been through? Because I'm looking at this resume. I mean, it's down the fairway. I went to Dartmouth. I got a great job and I got another great job and then I started my own business and there's got to be some curve balls in there or at least one big one. And I'm saying I can't really think of one. So I'm not gonna go and just say that. I hope I don't happen. There you go. There you go. Well played. I'm sure what would have been a big curve ball for other people. You probably just said it right out of the park. Thank you. What I love about you is in addition to your unique background and relation to a lot of the other guests that we've had, even unique within the Brokers community, is that you're also young. So you remember the beginning of your career very well and it's clear as day. And again, to make fun of you again, you remember in first grade when you beat your pants. So I definitely expected to remember your 20s. Yeah, I'm still in my 20s. Yeah, the early 20s and the early part of your career. I knew I was going to get shipped for that one. Yeah. That being said, what advice do you have for someone who's maybe five years or less into the business or someone who's looking to break into the business? Yeah, I would just say like don't underestimate yourself, especially for a lot of women in real estate where it's so male dominated. Like, how about it is just take it till you make it. Like, you know, power is taken. Do your thing, use your voice, be loud, take up space. Like, don't wait for you to feel like you know everything or that you have 100% of the required skills or 100% of the answers. Like, you can work without that certainty. You can assert yourself and propel yourself forward in your career without knowing 100 percent of everything that you think you need to know. And I think I use this quote-alongues. I really love it. It's jump and the net will appear. Not everything is going to be 100% figured out. And you can still take steps forward, especially in your career without having 100% solid foundation. And I think that's important. I think if I knew that when I was super early stage, I don't know that I would have really done anything different because I feel like I kind of became that phrase. Like, that's just how I was operating anyway. And then I kind of figured out like, yeah, I don't need to be 100% ready to launch this company before I launch this company or 100% ready to go into brokerage and leave a very stable private equity job. I kind of just didn't. And I think being able to do that mentality and framework back then would have been more helpful instead of looking back on it and saying, hmm, this is kind of the thing that I used to do. And now I still do and kind of putting it all together. When people ask me about entrepreneurship, it's funny. I share a lot of the same methodology with you because to me, if I could summarize entrepreneurship, other than like the crazy rollercoaster rides and all that, really, I think what it is is people being okay with being comfortable, being uncomfortable and making decisions without 100% of the information there. 100%. Yeah. You got to be comfortable making decisions, knowing that not all the information is there, but you have enough information to be dangerous and just go with it. And then if you trust yourself, like with your 80% information, they'll probably be okay. The poker things all coming back now. It all makes sense. Right. There you go. It's all expected value, calculated risks. Yeah. I think it's rare that people will say the world's better because you didn't become a doctor, but I think the world's better that you didn't become a doctor because instead of falling over all the time, you're just meant to be an entrepreneur who clearly is on a war path to taking over the entire world and will be able to do anything and everything that you want, philanthropically, to give back. And I can't wait to continue to witness your journey and get to know you better along the way. Thank you. I know you read your textbooks in school. There's no doubt about that. What about books that maybe weren't required and which one of those was your favorite or maybe a couple that you felt like really helped shape you or changed your life? I don't want to bullshit here. I don't like reading. I'm not a big fan of any books that I could say like, oh, this is what I live by. This is my code. Yeah. I don't know what about why. Fair enough. You are killing it and you want to follow your dad's path to retiring early one day, you know, 20, 25, 30 years, 40 years or now, whatever it may be. You're like, I'm done. I'm ready to go hang out on the beach. When the world gets over the sticker shock of hearing that information and there's an ICSC and all the other real estate publication magazines articles that come out. What do you want those to say about your legacy in the business? She hustled harder than anyone I know. Because that's really, I think when I hear positive things about myself, that's one of the ones that makes me feel really good. It's just people know I didn't get lucky. I work really fucking hard. Love that. Simple to the point. Couldn't have asked for anything more and couldn't be any more impressed with your story. Chelsea, thank you so much for joining us. It was a roller coaster ride that was heading on the edge of my seat my entire time and I can't wait for all the stairs to get a hold of it. Thank you. I was an absolute blast. Thank you for having me. Thanks for listening to Limitless, how to crush it in commercial real estate. I hope you were able to extract one piece of value out of today's episode. That's my only goal. If you did in fact get some value out of it. Let me know via LinkedIn, Instagram, or through a review wherever you get your podcast.