In this episode of the BigMikeFund Podcast, Big Mike sits down with Ed Mathews, founder of Clark Street Capital and host of the Real Estate Underground podcast. After 24 years in Silicon Valley startups, Ed pivoted into real estate investing, leaving corporate life behind to build a portfolio of multifamily properties, single-family flips, and now, large-scale projects like a solar farm in Connecticut.
Ed shares how he balanced family and career, why he walked away from a lucrative corporate role just before an IPO, and what he’s building today—from industrial flex properties to renewable energy. With insights on cap rate spreads, distressed multifamily deals, and the future of energy in real estate, this episode is packed with wisdom for investors navigating today’s shifting markets.
About the Guest:
Ed Mathews is a seasoned real estate investor and founder of Clark Street Capital, with a portfolio spanning multifamily, single-family flips, and development projects in the Northeast and Southeast U.S. A former tech executive, Ed left Silicon Valley to pursue real estate full-time in 2018. He also hosts the Real Estate Underground podcast, where he shares lessons learned and connects with other industry leaders.
HIGHLIGHTS OF THE EPISODE
00:00 – Welcome to the BigMikeFund Podcast
00:23 – Guest Intro: Ed Mathews
01:39 – Balancing family life with a high-travel career and the inspiration behind his pivot
02:38 – How Rich Dad Poor Dad reshaped Ed’s outlook and led him to real estate
03:22 – From first rental in 2011 to building a multifamily and flipping business
04:13 – Walking away from Docusign before IPO: choosing family and freedom over money
07:04 – The current market outlook: cap rate spreads, bidding discipline, and seller expectations
09:28 – Why single-family flips and land development have been the focus lately
09:34 – 58-acre project in Connecticut: solar farm and residential lots
10:49 – Energy, AI, and the growing demand for solar and nuclear solutions
12:39 – Distressed multifamily deals and the looming maturity cliff in commercial debt
17:03 – Why Connecticut’s rental market is thriving and resilient
20:12 – Exploring flex industrial: 46-unit deal with expansion potential
23:41 – Comparing flex industrial to self-storage and multifamily
25:11 – Return targets: 8% preferred return with ~15% IRR projections
27:59 – Raising capital for industrial projects and gauging investor appetite
30:01 – Downside protection and the appeal of industrial cash flow stability
31:56 – Book recommendations
32:29 – How to connect with Ed
If you found this episode substantial and want to dig deeper into real estate, or maybe you want to discover better investment opportunities, be sure to check out www.tempofunding.com.
CONNECT WITH US:
Website: www.tempofunding.com
Youtube: https://www.youtube.com/channel/UCnJkdVoOsUy85ydkmot9iVA
LinkedIn: https://www.linkedin.com/in/mzlotnik/
Facebook: https://web.facebook.com/TFmanagementgroup/?_rdc=1&_rdr
X: https://twitter.com/management_tf
CONNECT WITH THE GUEST
Email: ed@clarkst.com
Podcast: https://podcasts.apple.com/us/podcast/real-estate-underground/id1354633717
Full Transcript:
Mike Zlotnik: Welcome to the BigMikeFund Podcast. I’m the Big Mike, Mike Zlotnik, and today it is my pleasure and a privilege to welcome Ed Mathews. Hi Ed.
Ed Mathews: Hey Mike. How are you? Good to see you my friend.
Mike Zlotnik: Good to see you too. I will read your wonderful, formal introduction. Oh, Ed is a seasoned real estate investor and a founder of the Clark Street Capital. With over a decade of experience, Ed built a portfolio of multifamily properties in Connecticut and southeast United States. Ed’s journey was far from direct For 24 years, he worked for, the Silicon Valley startups, honing his skills in the go-to tech world. And it wasn’t until 2011 Ed bought his first rental property.
So over the years, as Ed worked to grow the portfolio, juggling his family day job, Clark Street. And finally 2018, he left the red race and, focused on the Clark Street, business. So without further ado, let’s get the show on the road. Sounds good. Ed, great to have you. And when I was a guest on your podcast, we had an awesome conversation, so I’m sure this is gonna be a lot of fun.
So, before we dive, tell us a little bit more about kind of your, your balance between your family and, your business.
Ed Mathews: So I’m always uncomfortable listening to people read my bio for some reason. But I think the short version is that I was a technology sales, marketing operations executive with a handful of, California based companies.
I live on the east coast in Connecticut and. I was gone 150 nights a year. And so I had, back in the day I had two little girls who are now much larger and, you know, it gave me a lot of incentive ’cause I was missing, as my wife said, I, I was missing a lot of good stuff. Right. I was missing. Choral concerts and soccer games and swim meets and all the fun stuff that you get to do when you’re a dad.
And I was missing a lot of it. And I loved the job, I loved the people that I worked with. But you know, it comes down to a, you know, a, a decision about what’s important. And in parallel, in, back in, I think like 2008, a very good friend of mine gave me a book, rich Dad, poor Dad, which I’m sure gets mentioned quite a bit.
That, you know, fundamentally changed the way I looked at my future. And so I had, I had. It, it caused me to think about what the next 30 years looks like. And, it fundamentally changed my path in that I realized that my future was working at, you know, as an entrepreneur and a business owner, not as an employee.
And so, I started buying, I, I, it actually took me a, a little while to get the courage to pull the trigger, but I finally bought my first property in just in, 2011. And, as a side hustle. Before it was called a side hustle, I built a portfolio of rental properties and, flipped. You know, I probably, I haven’t counted, but I probably should, you know, well over a hundred houses.
And, you know, I use the capital from the flips to buy more multifamilies and. Rinse and repeat. I did it for about six and a half, seven years, and then, at, I was with a company called DocuSign and I was standing in a conference room full of probably 2000 of my really talented colleagues, and I was listening to the CEO, do what I affectionately referred to as his laser light showy.
Keith Crock is one of the most amazing, charismatic human beings walking the face of the earth. And I was standing there and I was just like, I Keith’s right. He’s right about everything he’s saying, but I just can’t do this anymore. And ultimately I resigned. And, and, and you know, to give you an idea of how much it meant to me to leave, I left four months before the company went public, which.
Financially it was a really stupid thing to do, but personally, best thing I ever did.
Mike Zlotnik: That’s, that’s a great story. honestly, you can’t, you know, trade the quality of life for money. You can make all the money in the world, but if you can’t be there for your family, you know, what’s the, what, what, what, what’s the purpose?
Ed Mathews: you know, I was talking to somebody and it occurred to me, you only get 18 years. You only get 18 summers. Kids. Right. And so, you know, I’m still a young man. I, I can go back to corporate America if I want, but in all candor, every once in a while I’ll get a, a call from a former colleague or a boss and, and, they’ll say, any chance?
And I’m like, no, no, no, no, no, no. I’m, I’m done. I’m not coming back.
Mike Zlotnik: Yeah. It’s funny you mention 18 summers. I have a very good friend of mine they have, he’s a real estate guy and he has also a coaching program. I think it’s called 18 Summers. okay. And it’s, what they do is basically, it’s like a getaway.
You take a kid, one kid, not two kids, not three kids, but these, they do these kind of getaways with other, people like you and just they enjoy a little bit over that. one-on-one with a kid and to continue to build that relationship. So, yeah. Yeah, you get only 18 summers and then the kid’s out of the house, and then it looks, looks bizarre a little bit.
Ed Mathews: yeah, it, it, you know, four. So I’ve got a, old, my oldest is about to graduate from college in, December, and my youngest is gonna graduate from high school in the spring, so we’re close.
Mike Zlotnik: Well enjoy. Well, you can, and then the journey will, will have the next chapter, so, absolutely. now let’s talk, about the real estate.
Sure. This is, this show is all about, sort of obviously, individual life journey, but also, how they use real estate to help them achieve their, you know, freedom. Yeah. Financial goals, whatever it is. So we’re doing this recording. Middle of September 25. Yep. the Fed just cut rates. Things are a little bit looking a little better.
We, we’ve had a couple of rough years in multifamily space, commercial real estate in general. So I don’t know if it’s too little, too late for some projects, but definitely it, it, it’s, you know, it’s tailwind. so what are you working on now? What, what kind of opportunities are you seeing? What’s interesting today?
What do you think is gonna be your next, move for the rest of this year into 2026? Just kind of, open discussion. you’re gonna, you’re looking for new properties? You always, yeah.
Ed Mathews: Yeah. I mean, we make offers every week. the, they don’t get accepted, but, you know, ’cause we’re, we’re, we’re basically.
You know, we have a model. We stick to our, we stick to that model. it is, you know, and it’s, it’s pretty basic stuff, right? But the bottom line, step one is I need a two point spread between the cap rate and our cost of debt, or we can’t talk, right? And so, you know, we make offers so. You know, over the last probably two years, because of my background both in, multifamily and in in single family, I, I tend to take what the market gives and so lately.
it has been single family flipping that, that I’ve focused on. You know, quite frankly, I haven’t bought a, I’ve sold, but I haven’t bought a multifamily in 16, 17 months, and. I’m starting to see some movement. I’m starting to see more rational pricing. you know, I, I don’t, I’m, I’m not one of those people that blames the, the cost of debt and the fed for the situation here because.
Historically, if you look back the last 50 years we’re right smack in the middle of historical norms as far as, as far as, mortgage rates, you know, as commercial for commercial buildings and so on. And, and so that’s not the part that, concerns me, you know? What, what I’m focused on when I’m trying to bid on these is, one is, is cost of insurance, which is still very high.
and then the other is, is the, you know, the going in price because it’s, it’s getting better, but it’s not where it needs to be in terms of sellers being realistic. And so, what I’m working on right now is, a handful of, single family home flips. And we bought, a little about a year ago, we bought 58 acres here in Connecticut, and we are in the final stages of approval for a solar farm, that we’re going to deploy.
As well as, we’re gonna get, I believe eight, knock on wood, eight lots, approved residential, lots approved. And we are. Deciding probably in the next six to eight weeks if we’re gonna build or if we’re going to sell off those lots. But we’re definitely keeping the, the solar farm.
Mike Zlotnik: That’s really cool in the Yeah,
Ed Mathews: it’s a really interesting project.
Mike Zlotnik: Yeah. I’d love to learn more, but in the world of ai, listening to. A lot of the AI podcasts and all the conversations, it’s all about energy. Almost like you can’t associate AI progress without building more energy capacity. So yeah, solar is the fastest way to get to production because all other methodology, nuclear or takes too long, gets turbine turbines.
All of them take a very long time to deploy. Talking about you either can, can’t buy turbines or you can’t, you know, nuclear is a 10 year projects even, right. With improved technology. Yeah. So solar, it’s still the fastest path to production.
Ed Mathews: Yeah, it’s interesting. You know, the, by 2040, I think the year, we will, AI alone will consume all of the current grids, electrical load.
so if we don’t improve in the next. You know, 15 plus years, we are in a major world of hurt. So, I think there are probably three competing. I watched a, a podcast and this gentleman who runs a, a new technology, fission nuclear company, a generation company. And the idea is that it’s much smaller and modular.
So instead of the reactors that you traditionally see with the two, the two, stacks plus, now they’re roughly the size of a shipping container and you can daisy chain them, and, and stack them, as needed. And so that is really interesting to me because he can get it up and running in about three years.
and, you know, the, the output clearly is not what a traditional nuclear plant will provide, but, it is, encouraging that, you know, we’re, we’re on the right path. And then hopefully, I think we have 94, 95, Nuclear facilities in the co in the country that are online. And hopefully that that increases because we certainly are going to need it.
And solar, while a, a viable option in the shortened medium term, it doesn’t solve the problem, that, that we’re gonna have, you know, in a couple of decades.
Mike Zlotnik: Well, it’s a, it’s a, it’s a fast path. Yeah. Solar is a fast path to deploy. it, it may not be, I don’t know how scalable it is, but it’s, it’s in, you know, in Northeast, the amount of, sun that, that we get is also a little bit, you know.
Limited. Yeah. Relative to, you know, Arizona or Nevada or other parts of the southern regions. But still, still, it’s say it’s a good way to, probably get a good return, on your investment. So let’s continue the conversation, the, the back to the bidding on multifamily. first of all, what you said, 2%, as positive spread is sort of the key requirement for us too.
It’s, it’s almost like. it’s the equity spread, the, the, the cap rate to the interest rate. It’s not easy to get, but that’s philosophically is the right way to think. And, I mean, I can just tell you where you can actually get to these type of situations is you, you just gotta find a distressed, truly distressed.
owner, even to the point where maybe the bank, might, might need to be, you know, might need to take a haircut. So these type of situations exist, absolutely. Either there’s no, no equity left or, or, or even the, the deal is upside down and it is, it is sort of a, not easy to find, but they, they do get f you know, these things exist.
It’s almost like you just gotta continue. You gotta be persistent and you don’t wanna buy a really troubled. Asset where you have to spend ton of, money bringing it up into let’s just call operation or, or, or significant improvement. But even these, let’s, let’s call ’em not super, super difficult lifts.
we are finding, but it’s not a volume play, so keep, keep looking. I’m sure you’re gonna find, we, we are definitely finding the in industrial space. Yes. And open air shopping. Those two strategies, not that difficult to get. Yeah. multifamily still, unfortunately, you know, some sellers just, they just feel that they don’t have to, surrender the asset so they keep, you know.
Keep holding onto this while they’re bleeding cash until they no longer can. Right. And that’s when the, you know, the pressure gets to the point where once it goes past the point where equity’s depleted, it’s really all discussion with the bank. Right. And then, you know, that’s the theory. So, agreed. I, I, I would expect that over time, even with interest rate cuts, because the, the higher for long has been around so long, a lot of these projects have got to the point where they just saw money.
Yes. Because out of money, the maintenance suffers. Right? You don’t have the money to spend, spend on maintenance. And then two, you don’t have enough money to keep the mortgage. Right. So it’s basically be, before there was a pure pressure on the owners, now it’s the pressure on the bank. Yeah. And if you get enough of these pressure points for the banks, they will start.
Some of them will start getting some flexibility. yeah. Especially the
Ed Mathews: more regional portfolio lenders. Right. yeah, I mean, I fully expect that to happen, but, you know, it’s interesting. Moody’s had a, a, a, a, an announcement, a presentation, I think they made, I wanna say, in January of 24, saying that, basically the message was that 23% of the, of the.
mortgages that were about to be, repriced, were underwater. And, you know, it’s interesting, I I, I expected there to be a lot more distress in the market and it turns out that a lot of those guys just found bridge loans and, or sold. And, so the distress that I was expecting, I didn’t see. I am seeing some distress here in the northeast, although this market is pretty healthy.
you know, I think we’re also saved. I mean, you’re here too in, in lower
Mike Zlotnik: cap rates. Another issue in north Northeast, you’re not gonna find that 2% spread. It’s very hard to find here. It’s way harder to find that, that 2% requirement here versus some other markets.
Ed Mathews: Yeah, it doesn’t, it’s, it doesn’t exist. And the, and, and that’s where we live right now.
I’m not buying in the Carolinas at the moment. Just because of life circumstances. I’m busy and I, I don’t want to travel, so I’m not looking down there right now. But, the, you know, what I was driving at is that the, the fact is, is that rent, rents here and especially in Connecticut, continue to, to rise very consistently and pretty aggressively.
So, and you know, the job market here in the state is, is very good. And so, not only does. Rent, continue to climb fast ahead of inflation, but so does, so do incomes. So it’s so far, so good.
Mike Zlotnik: Yeah, that’s an interesting point. yeah, statistically, the bigger distress is not northeast. Northeast you’ve had a very healthy rent, very healthy rent growth because a very healthy overall economy.
Yeah. And you, you gotta go more of the, the markets where you’ve seen oversupply, you’ve seen some level of softness and, it’s gotta be enough motivation. for, for the owners to transact, but overall, yeah, I think Texas,
Ed Mathews: Arizona, that’s, there’s probably pressure there. but
Mike Zlotnik: yeah, you got Texas, you got Arizona, you got Florida, you got plenty of other markets where, you know, Georgia, these properties were, were bought at the peak.
And, it’s just a matter of time. I, I, I just wanna say that Yeah. Multifamily heavily been financed on floating rate debt, right? I mean, they, they, they just a rate spike. the pressure just kind of. Spiked unless you had a rate cap. And when the rate rate cap expired, that’s when the pressure really applied and you extend and pretend.
And mass debt, bridge loans, all these strategies continue to be a ways to survive and drag it out. but it, it’s, it’s, it’s still, this, this. I think the data is misleading. What I would say is the pressure in the system, the non-reported pressure, is greater than the, the actually formula reported pressure.
I agree. I agree. The banks will play games to make it look like, they don’t have a, a loan, you know, in, in default when it should be in. So, maybe it’s a problem with regulators, whatever the incentives. So what I, what, what, we are seeing is sooner or later the, these deals, and situations will, will, will come to the market.
On top of all this, Northeast has a really big problem and it’s just the entire country has a big problem. Even non floating rate debt. The fixed rate stabilized asset is the maturity cliff. It, it’s, it’s, it’s to the point where you finance, let’s use an example at 4.3% rate, and you took a five year loan, and that loan is really maturing now.
So, today it would be, let’s call it 6.3. You just can’t refinance that, that difference. It’s just so big. It’s huge. So I, I, I don’t know what the solution is, but the solution is, automate
Ed Mathews: at a discount. That would be wonderful.
Mike Zlotnik: Exactly. Yeah. I’m ready
Ed Mathews: to go.
Mike Zlotnik: Cool. well let, let’s continue the conversation.
Sure. obviously you’re doing solar, you may sell some development lots. and what else, what else, what else happening? Just, just curious. Yeah, so
Ed Mathews: that development lot, that development land, actually, it originally started off as, multifamily, affordable housing, but, you know, construction costs. Are what they are.
And, and, and so we thought that, highest and best use was the solar and, and the, residential. I’m also looking at a lot of flex industrial friend of mine, Brian Tulley. He, up in Massachusetts, he and his brother have, invested, very successfully in that. And, you know, here in the northeast, that asset class performs exceptionally well.
Given that. you know, the, it’s a healthy economy, so the contractors are doing well. The other small and medium sized businesses that use those, types of, you know, with a garage in an office and or warehouse in an office, they’re, they’re thriving. So that is an asset class I’m interested in. we’re actually.
Stress testing one right now as we speak. It’s sitting on my desk right here and, I’m, I’m playing, red team where I’m trying to shoot as many holes in the deal as humanly possible, and I found a few, but I think they’re, they’re solvable problems, so we’ll see.
Mike Zlotnik: Well, that’s really interesting. So yeah, we, we, we’ve actually made a very similar conclusion to do a lot more in the industrial.
There’s two primary, well there’s multiple flavors of it. yep. Reflect industrial is is one where we’ve played and the other flavor we’ve seen just to reflect on the industrial is an absolute triple net single tenant. Yes. So little different
Ed Mathews: on our show. Yep.
Mike Zlotnik: Yeah. Yeah. It’s a little different. but, we find that if you, if the one tenant, it’s your one risk point, but if it’s a.
High credit quality tenant with the probability of default being very, very low. Right. I mean, risk is composed of two elements, likelihood and impact, right? The impact is very heavy if the tenant le leaves. But if you’ve got a great location, you could still re-tenant it, especially when demand is he, healthy.
Ed Mathews: Yep.
Mike Zlotnik: And then the likelihood is very low. I mean, it’s not zero, but it’s sub, you know, one. So if you combine all that together, flex Industrial, I guess it’s somewhat similar to multifamily, especially if you have a lot of them. But it’s a, you know, if you have a 10 to 10 garage, a 20 garage or 30, I, I’ve heard, and I’m not sure what projects you’re looking at, you take a hundred thousand square feet, then you have 30 tenants, a 3000 square feet each, or something like that.
Right? Yep. That’s alright. 30 tenants. I’m just, what are you looking at? Is, is this this kind of, that’s what’re
Ed Mathews: looking at, we’re looking at a unit right now. It’s 46 units and, well there’s the opportunity for 46 units. I think there are 24 on site, with land and, and existing approvals to, to put another, 22 I think on, on the property.
So, that’s very interesting, especially given that. Building those, is a relatively straightforward process. You know, nowhere near as complex as, say, building a in an apartment building. And, so it’s, it’s really, you know, you know, it’s really attractive because. The, while the, the leases are probably not as lengthy, you know, it’s probably a three to five year lease as opposed to, you know, what industrial signs, you know, what are they, 20, 30 year plus, right.
20, 25 years old or tens with a option to renew. Right. so it’s a, you know, it’s a, it’s, it’s not the same. I, I, I look at Flex as more akin to hybrid self storage than I do. Multifamily, although there’s a lot of commonality in terms of how they’re run and managed, probably, you know, in terms of the multi-side.
but, but I think the, the returns are a lot closer to what traditionally self-storage is provided.
Mike Zlotnik: So on, on this topic, self storage, monthly rents, multifamilies, annual rents, industrial and, Like retail? Yeah. Typically longer term rents, so flex industrial, maybe somewhere in between with three to five.
Three
Ed Mathews: to five? Yeah.
Mike Zlotnik: Yeah. And, and what kind of, you know, cap rates, I guess acquisition cap rates. If you were, if you didn’t. You know, I don’t know if you, if it’s a critical part of the, of the strategy to build additional, maybe that’s the required value to make it very attractive. But, but if you don’t build, well, let, let’s call it this way, what are you buying it at on a cap rate on the As-is and what it’ll cost you to build what kind of cap rate or yield to cost on the extension?
Ed Mathews: cap rate going in is in the nines. and. To build, TBD. I’m working on that right now.
Mike Zlotnik: Yeah, that’s actually, that’s, that’s, that’s great. So nine or or above in the nines 9.2
Ed Mathews: or something like that? Yeah, yeah, yeah.
Mike Zlotnik: It’s, I I’ve seen single tenant industrials, eight to nines, eight to 9% range maybe, maybe wind up in the nine with the flex, but the bottom line is you can actually get the 2% spread
Ed Mathews: absolutely.
More.
Mike Zlotnik: Yeah, you could, you could get the money in the sixes, right?
Ed Mathews: yeah, I think our, cost of capital is in the mid six, mid ish sixes. And, you know, if we’re, if we’re going in at 9.2 and change, even if we’re wrong by a half a percentage point, we’re still very good.
Mike Zlotnik: Yeah, this reminds me, we just did open air shopping.
Nine and a quarter cap on, purchased six and a half fixed debt. Right? I mean, that’s a 2 75 spread. Yeah. If you don’t wind up 2 75, you wind up with two and a quarter or something like this. You, if I’m wrong about
Ed Mathews: everything. It’s still north of two, so we’re good. So
Mike Zlotnik: yeah, I mean, at the end of the day it, it’s, it’s a mix of the tenants, but if they are, Yeah, if you had to have a diversified mix, and it’s a great location. I assume it’s northeast, right? That the project up in
Ed Mathews: the Boston area? Yeah.
Mike Zlotnik: Very cool. Yeah. So, and, and, have you run this by your investors? I’m just curious. this is one of the things we are looking to do in very, very near future because they’re working on these industrial deals.
We literally, want to do a query, a a, a questionnaire, a a, a survey Yep. To investors and say, okay, here’s the deal. Here’s what they look like. Here’s the cashflow economics. Here are, there are economics. Here’s the downside protection, here’s the safety. Right. Is this interesting or not? Yeah. To me it’s interesting, but it’s kind of for, for, for, for capital raising purposes.
It, it’s harder to raise. So you, you, you, you, you wanna make sure you, you lock up the, the thing on the contract, you still can raise capital for it.
Ed Mathews: Yeah, I mean, we’ve, we have probably, you know, a handful of key investors who are, the lion’s share of our, our capital partners. And I’ve had conversations with all of, to see if this is something that would be of interest.
And you know, some have said no, but a lot of ’em said yes and. you know, they gave me some pretty specific needs in terms of their returns and timeframes and things like that, but, nothing that would scare me off in terms of really spending some time on this. So that’s what I’ve been doing like the last, couple of weeks.
Matter of fact.
Mike Zlotnik: Curious, what are the, what are flex industrial you’re seeing? What are the pencil at if you buy it in the nines? Just curious, what’s the cashflow to LPs and then, what’s the a RR target under whatever terms? Yeah, so,
Ed Mathews: I’m guesstimating on a little bit of this ’cause we’re literally mid due diligence right now, but, you know, the way we’ll set it up is probably a, an 8% pref with a, you know, a, a target of 15% IRR.
But I think we’ll do better than that.
Mike Zlotnik: Yeah, this is so. Similar to what we were looking in the single tenant industrial, it, it, it’s very, very similar concept. IRR target is like 14 to 16, so 15 smack in that range. Yep. They, they, they behave very, very similarly. Just, you just have a different mix of, you know, flex versus, single tenant.
Yeah. But, and I assume you, you still have rent escalation clauses, you still have all the fun stuff.
Ed Mathews: Oh yeah. Well, I mean, so there’s the existing, rents, I think. 22 of the 24 are, are rented out. and, you know, I mean, we’re doing our due diligence on the leases, but nothing has jumped out at us that causes us concern.
There’s, you know, standard escalator clauses, with, lease the leases that I’ve seen. I haven’t reviewed ’em all yet, but so far so good.
Mike Zlotnik: Yeah, that’s wonderful to hear. And, and, and honestly, I, I’ve had discussion interestingly enough with number of investors in. Many people are accustomed, they’re thinking today you have to get, you know, buy super deep and get your returns in a very high teens and in twenties.
And we absolutely trying to look for this. But when you go into this strategy, yeah, it’s not always the case. but you have to be open-minded then at least from A lot of conversations we’ve had, just the, the, the rule number one, don’t lose money. So if you go with that rule, don’t lose money, and immediately you start thinking how do you, what kind of deals can protect you against, you know, capital?
Potential capital risk and industrial looks super, super downside protected. It does, and
Ed Mathews: you know, the economy’s going the right way. Manufacturing trends are going the right way. you know, here in the northeast, the contractor class is thriving and, that is probably 60% of the clientele. Maybe a little bit less, but that’s probably where it lies.
And, you know, the others are, you know, different types of businesses, retail and, and other, and, you know, it’s, it, it’s, it’s very interesting still dealing with human beings. So it’s not quite. It’s not quite self storage in that, you know, you don’t have to talk to a human if you don’t want to, but, but I’m a people person anyway, so that doesn’t matter.
And, you know, so there’s relationships there that have to be managed and maintained and, you know, evolved. But you know, by and large, so far, you’re catching me mid due diligence, but so far it’s pretty darn attractive.
Mike Zlotnik: Yeah, good luck and, and it’s way easier to manage. It reminds me, you know, multifamily and I have a lot of respect and admiration for that asset class, but it’s way, way, way harder to execute your yes.
The strategies. You have tenants, you have, you know, rent regulations depending on the market. Indeed. You have insurance, you have the hurricanes, you have oversupply depending on where you are, of course. but these industrial tenants, typically you sign 3, 5, 3, 5 year lease. And most of the times you managing asset, not, not a property, right?
So.
Ed Mathews: Which is very coming off of managing my own multifamilies for all these years. this is very attractive to me.
Mike Zlotnik: Very cool. Yeah. Great minds think alike. how would folks reach out? Any great books, suggestions, anything like, so books,
Ed Mathews: I’m reading Keith Cunningham’s. it’s, I’m blanking on the name.
Excuse me one second. Let me look. Something less. Oh, the road less stupid. I, I just started it. And so, so far I, I’ve met Keith and I’ve seen him speak multiple times and I’ve been me, this has been on my reading list for probably a year and a half, so I’m finally getting to it. if you want to get in touch with me, you are more than, welcome to text or email me at ed@clarkst.com.
That’s C-L-A-R-K-S-T.com and if I can be of service, we’re at the same web address and if you’re interested in what we’re working on, we also have our own podcast, Real Estate Underground.
Mike Zlotnik: Yeah. Thank you, Ed. Yeah, the podcast is great and you’re a great host and we’ve had an awesome conversation.
Ed Mathews: We did. You were great. Thank you.
Mike Zlotnik: I really appreciate kind of how, how like great minds think alike and, and it’s, it’s, I don’t know what, what it is. We, we could be wrong, but at least we we’re learning and we’re trying to be right. And sometimes when many people come to the same similar conclusions through their trials in life one way or the other, there’s some wisdom in that.
Ed Mathews: I hope so. We’ll find out, won’t we? So far, so far so good, Mike.
Mike Zlotnik: Thank you, Ed. It’s been a pleasure. And ed@clarkst.com. Thank you.
Ed Mathews: Thank you.
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