Sam Dickinson of Keeler Markwood Group | The Peekskill Brewery in Peekskill | Developing and Redeveloping

Transcript

[00:00:00] Announcer: What goes into making an iconic building in America? What are the stories and who are the people behind the next generation of architecture? If your work touches the real estate industry in any way or you're just curious about what goes into one of a kind cities and towns all across our country, join us on the American Building Podcast.

In season two, we learn about everything from skyscrapers to single family homes. From the famous and soon-to-be famous designers and developers responsible for them. This season focuses particularly on the pandemic and how our buildings will change in response. Our sponsor is the iconic design firm, Michael Graves Architecture & Design. And now your host award-winning architect-turned entrepreneur Atif Qadir, AIA. 

[00:00:59] Atif Qadir: This is American building. And I'm your host? Arthur . I'm the CEO of Redis, a technology company focused on innovative public financing for real estate projects. We are recording from the historic home of world renowned architect, Michael Graves in Princeton, New Jersey. Check out this amazing space for yourself at the Michael Graves, architecture and design YouTube.

Now let's build something today. Our guest is Sam Dickinson. Sam is a founder and principal at Keilor, Mark Wood group, a Westchester based development company, focused on ground up and value add deals. He started the company with his friend, Matthew. And 2016 previously, he was one of the founding team members at Crinetics capital management in Greenwich, Connecticut, where besides equity analysis and trade execution, he helped set up the company's risk management framework.

He started his career as a chartered financial analyst at Goldman Sachs asset map. And we will be talking about the Peekskill brewery, a major renovation and redevelopment project he was working on in the Hudson valley of New York. More broadly, we will talk about how a good development strategy and design can make the difference between food service venues that survive and those that perhaps do not.

So thank you so much for being here with us. 

[00:02:21] Sam Dickinson: Pleasure to be here. My first podcast, I'm going to be out there with that and I'm excited to do it. So thanks for having me first time for 

[00:02:28] Atif Qadir: everything. So you began your career in hedge funds and spent 20 years as a trader. Could you explain to us what you did and how your interest in real estate grew over that time?

And for those perhaps that may not be that into finance. Could you explain what a hedge fund actually. 

[00:02:45] Sam Dickinson: Yeah. So most people invest via a mutual funds, ETFs. They're familiar with, you know, picking stocks. I started off in the business in an investment management firm. I started off in basically operations and, uh, worked my way up.

I started off making $20,000 a year. And reconciling trades and doing fund accounting and basically all the unglamorous stuff. And, uh, throughout the years worked my way up the ladder. And, uh, then. I found my way onto a trading desk at a hedge fund. And so hedge funds are alternative investment funds and typically are open only to sophisticated investors.

And that really only means that you have a lot of money and you can afford to lose money. So hedge funds also have a lot of latitude to do what a mutual fund or some other more publicly accessible type of investment vehicle can, can do. So. Mainly includes shorting, which means borrowing a stock and selling it with the expectation that it's going to decrease in value.

So the funds that I worked for were equity long, short funds, meaning we bought stocks, we thought would appreciate and value and shorted stocks that would decline. Most of the funds that I worked for were global in nature. And meaning we invested not just in the U S but in European markets, Asian markets, a whole range of emerging markets.

We also dabbled in non-equity types of instruments like currencies. Credit products, that sort of thing. So this isn't a finance podcast, but I won't go too, too much into the detail on that. But do 

[00:04:28] Atif Qadir: you know, honestly, Sam, from what you've described so far, it sounds like it absolutely apt and wonderful preparation for being a developer because so much of a developer is the unglamorous stuff.

Yeah. Mopping up the floors when there's a flood and making sure all the doors are locked and the windows are closed and babysitting and all that other stuff. And then the expression about having some money and then being able to lose a lot of money is absolutely what development's all 

[00:04:52] Sam Dickinson: about. So for sure.

And actually, if I were to do it all over again, I don't think I'd change anything. I think having that experience in the most basic aspects of the business and operations was just as valuable as doing all the things I did towards the latter end of that part of my career. So I think there's a ton of value, right?

Doing all parts of the job and getting your hands dirty. So, uh, I think it's really appropriate analogy, you know? So I think you asked how did that blossom into, into real estate? I always had an interest in real estate. In fact, when I was in high school, I took some architecture classes. And I think somewhere, I don't know if I have it here, but I, I built a model, you know, scale model of a house I designed out of cardboard and it was something that I took a lot of pride in.

I kept it till this day. It's not, not in the room, but I have it somewhere. And, uh, it was also just something that fascinated me. But you know, when I started in college, I went down the finance path and always had an interest in that as well. You know, I did the finance thing and the hedge fund thing for 20 plus years.

And there were a pretty wide range of reasons why I thought it was time to do something else. The industry had changed a lot. I had career burnout. I was trading the globe, you know, coming home at 6:00 PM and then getting back in front of the desk at 7:00 PM to trade Australia. And then. Hong Kong and India.

And so it was exciting. It was high pressure. The thing people ask me what I miss about that job. And I think I missed the people. The most, the relationships I had with people obviously started new relationships in this career. So I would say it was just exciting and there was something new every day.

That's one of the things about trading that I loved is that. There was never the same thing in any one day. So, uh, it was just the amount of work and the, and the expectations, you know, you, you burn out and I'm in my late forties now. And when I left the business, I was in my mid forties and that's actually pretty old for that business.

So when I left the business, I took some time off and as time went by, it occurred to me more and more. This wasn't something I wanted to go back to. And at the same time I was building a house in Cape Cod. We had bought a property gone through the entire process, entitlements, design, construction, budgeting, all the things you see with commercial real estate.

And I was fascinated, just absolutely fascinated by the process. And I said, wow, this is there's a way I could make money doing it. Who would be, I'd have a blast and it would just be a lot of fun and it'd be something refreshing for me to do. So that led me down the road of trying to figure out how can I pivot my career from finance into real estate.

So a friend of mine, who's an architect introduced me to a bunch of people in his circle, including yourself. That's true. I think we 

[00:08:04] Atif Qadir: met at the Intercontinental that's when I was working. 

[00:08:07] Sam Dickinson: That's right. Yep. So, um, a mutual friend of ours introduced you and I, as you recall, and he also introduced me to a ton of other people in the business, and I tried to figure out, Hey, what can a guy with no real estate experience do to get his feet wet and real estate?

And. The one thing that people kind of said over and over again. And I probably said the same thing to me was, uh, you just need to do something. You need to get exposure and that's the way to learn. And that could be anything from buying a duplex or small multifamily investment property or buying an investment unit.

Like we've talked about to doing something bigger. And so I came to the conclusion that if I'm going to do something. Like similar to what I did in my house in Cape Cod, which is building something from the ground up. Why not do it with a little bit more scale and find, surround myself with people that can help me succeed, because I clearly don't have the expertise to do it myself.

So through that networking process, I met a gentleman, Matthew Trey, who's my current partner at killer. And we discovered we both had very similar ambitions. I mean, he had the construction background. He had the background as an owner's rep doing condo projects in Manhattan. And he was a Westchester guy.

Like I am in Westchester county and wanted to do things in our own backyard. We came across an opportunity and he had the, uh, experience in the construction field and building things. I had the finance expertise and I had a little money that I could put towards the project. We'd still have to raise money from investors, which we ultimately did.

And so we said, let's go for it. And so the rest is history. There's been a lot of other steps along the way that have helped me do. As a real estate professional, and I'm clearly still developing and have a lot to learn, but I feel like in kind of the four years that I've been doing this, I've just had exponential growth and feel a lot more confident in what I know versus when I came in and have a lot more to bring to the table.

[00:10:20] Atif Qadir: And when I started, I think what you  described about, uh, being a Westchester guy was one of the things that I particular found as being incredibly important and starting out my own development business, as well as to identify a particular area that you want to be the king or the queen, or the, the royalty of, and basically know it up, down left, right front center.

Uh, and I found that that is the way that you. Make the case for why someone should take the risk and invest with someone without a track record versus say a mid-size firm that might be working in that market and 10 other markets in that area. So I think that's definitely an AppSec kind of path to go down.

And I think you might be interested knowing I was reading New York magazine recently and there was a big focus on the change in work culture at a number of the large banks downtown, uh, particularly for their employees that are in their first or fourth. At the farm, the end, it's wildly different than that.

I, at least my friends described it as, and I'm guessing that your experience is 

[00:11:20] Sam Dickinson: as well. Sure. And that's absolutely the case. I think the expectations have changed for the better for people that are in that kind of line of work. But another point that you made before that, uh, which I want to touch on is being an expert in a certain area.

So knowing kind of mostly. Yeah, basically knowing almost on a block by block basis, a couple of towns or cities, and having a deep understanding of the real estate markets in those cities. That's super important. And I don't know if you remember this, you gave me one piece of advice that I took to heart and it was super helpful.

I think it was that first meeting that you and I had to. Which was make a point to either attend or listen to a lot of the public meetings. So planning board meetings, common council meetings, board of trustee meetings. Those are the people that shape the policy in those towns and villages and cities.

And, uh, so you get to know the players. You also get to know what the process is like through watching other people. Either fail or succeed. And that helps and helps arm you 

[00:12:35] Atif Qadir: basically, 

[00:12:37] Sam Dickinson: basically. Yeah. I mean, you know, you go in knowing what the expectations are. You know, there's been municipalities where I've seen, they always ask for solar on the projects.

So if you want to come in with a project and you know, they're going to ask for solar, you should probably make an effort to provide solar. So that was hugely helpful. And that's a practice that. You know, undertaken as I get to know new mint municipalities, and also continue to, so that's 

[00:13:06] Atif Qadir: actually something, well, thank you.

That's wildly entertaining as well. So I I'm in a nerdy sort of way. So I mean, I eventually became a city planning commissioner and Hoboken. And as you could imagine, it probably similar to some of the markets you work in small, very wealthy. Relatively small, like 50,000 people across the river from New York city from that.

And, and the way that people respond to things that mean change in any sort of way. And those incredible sensitivities that people that come from a NIMBY perspective have a, if anything, it's worthwhile as a developer to understand those. Kind of work around them in your presentations, but it's also wildly entertaining.

I think there's definitely some Oscar worthy performances that I've, I've definitely heard 

[00:13:52] Sam Dickinson: as a flag. I've noticed there's a lot of people that enjoy grandstanding and hearing their own voices and they're repeat performers in there and their towns. So yeah, there's, there's definitely some entertainment value in it.

So 

[00:14:06] Atif Qadir: let me ask you this. So as you made this decision, you met Matt and you had the plan of what you want to go forward on. Yeah. Assuming you met, you met him over beers on a Wednesday. What was Thursday? Like what was like the first couple of days? Like, what did you do 

[00:14:19] Sam Dickinson: to get started? So we had our first meeting in Manhattan.

I think we met at a LA Panco city and they had some automatic tests. I took French in middle school. So we met there. It was just, you know, we were both kind of young guys eager to do different things and he wanted to branch out and be more in development, not doing, you know, as an owner's rep, he does development for other people effectively.

And so we had a common desire to do our own thing and do it in our own backyard. So that was the first meeting and. Second or third meeting was probably him calling me, telling me that he had a property in downtown white Plains where I'd live. And he's two towns over town over from white Plains and said, there's a property for sale.

It's a block off of the main drag in the town, close to a lot of important institutions in the city of white Plains. And. It's worth a look. And that was exciting and terrifying at the same time, because I really had just come out of the hedge fund world. And I think like I've said to you before, the only thing I had going for me is I had saved up some money, but not a ton of money.

And so I could bring some capital to a project as equity. Certainly couldn't finance a project on my own. And so idea of jumping into a ground up development project was terrifying. And I didn't know Matt that well at that point. So we spent some time getting to know each other better from that point on, I am risk averse generally on my hedge fund days.

As you mentioned at the. I was in risk management. So I always thought about what could go wrong. What's the downside. Everything can go wrong. Yeah. Putting a pandemic. Yeah. And, and, you know, our, our mutual friends who introduced us really put it well to me and said, you don't even know what you don't know.

And I said, yeah, that's right. I don't. I got to know Matt better, but we didn't have a ton of time. And I said, let's just go for it. And so him and I ended up funding that acquisition ourselves. It was two small parcels of land. So it was enough that we can fund ourselves with cash, but we knew there would come a time where we were going to have to go out and raise money from investors, because that was basically, we are taking on all the equity ourselves and that wasn't sustainable.

We weren't in a position to get alone in that period of time. And so we said, let's just go for it and, uh, take a shot and funded ourselves, which we did. And, you know, the determination was made at that point that the highest and best use for the property would be to be medical office because it was close to a medical institution.

So we went down that path and, and that was the beginning of it, but it was certainly a leap. And I was fortunate enough that, uh, in, in my position my wife was still working. And so she's been the breadwinner for a good part of these years. I've fortunately started to generate some more income as I become more capable and can, uh, do things like consulting work.

And I know, you know, you and I have obviously worked on some things together in the consulting arena and I've built that business out for myself a little bit more subsequently. No found ways to pay the bills, but, you know, I truly would not have been able to do it if it wasn't for my wife's support, either having her, her patience and her willingness to kind of let me go down this road is.

It's been huge and not, you know, not everybody has that. 

[00:18:22] Atif Qadir: I think that's actually, that's absolutely an important point, whether it's a spouse or parents or some other kind of setup where you're able to just borrow chunks of cash or just not have to worry about certain things that can get you over those, those leaps in the beginning.

I'd probably say one of the most important things as well is people that come from. Kind of rarefied air of schools and jobs and industries, and that we know a lot of in, in Metro, New York city. I think what I found is there's often this desire to look for the right word, to be like, Acknowledgement of their intelligence and their worth, or their greatness from other people and seeking that out all the time.

And when you end up, uh, working on your own, there's no one is your cheerleader. No one is there saying great, good job each day. You don't have to wake up just like the movie to help. And it's like, you are smart. You are important 

[00:19:20] Sam Dickinson: people like you, you got to learn to pass. And, uh, you know, I, I was very humble and just, I think I went into things pretty openly just saying, Hey, this is what I, this is the value I bring right now.

And then some cases people had to convince me, Hey, you have more value than you think. So, you know, for instance, my finance background, you touched on the biggest. You know, if you're looking at a stock or a bond or a piece of real estate, you're basically analyzing discounted cash flows. And so it's conceptually the same, it's different in kind of the mechanics and operationally how a piece of real estate works versus kind of some sort of securitized product, but in a lot of ways, they're pretty similar.

And so once you kind of understand the structure of how a real estate deal works and how an operating budget works and things of that nature. It's really not that different, but you know, it's take a step back and, you know, it's been great having my wife's support, but it's also. It has a lot of ups and downs, you know, it's just, it's not, it's not easy.

She's working her tail off trying to support the family and I'm telling her it's coming, it's coming, it's coming. You know, this, this, this project has been for years in the, in the making. And yeah, I don't blame her for having a little disbelief at times. Yeah. There's times where she says. No. I, I don't know if I believe this is happening and, you know, I, I can say now we been down a long road, but we're pretty close to making the project and wait plans start to come to fruition.

So, but it hasn't been easy and it's, it's a long road. And one of the things that. Learned about real estate is a lot of these things take a long time and maybe a longer than you expect, and it's not easy and you have to be very flexible and make adjustments along the way. I think 

[00:21:19] Atif Qadir: usually what I would say is that what is so fascinating about the real estate industry and the construction industry overall?

Is that it's the largest industry in the United States. It's the largest contributor to our GDP. It's the largest employer. It touches every other industry in the United States. And it's one with relatively, no barriers to entry. So you, anybody can say that they're in real estate or in construction. And I think it's one that through.

The stories that are told and media and et cetera, it's often the con artists and the ones that exaggerate what they are and what they can do are the ones that are, that get the most praise. And what I would say is this is having been in this industry for a while, for now 15 years or so. It's that it's always better to play the long game and be honest and be direct with people because particularly if you're working in a single.

Everyone talks, everyone knows each other. And if you go down that path of pretending to be somebody that you're not, you're going to be called out for pretty quick, and it's going to be really hard to do business 

[00:22:23] Sam Dickinson: for sure. And I guess I'm the type of person also that just, um, a can't live as a fraud. And so, you know, I am who I am and I'm still learning a lot.

I think I've made a lot of strides in the last couple of years, but. You know, that's why it's smart to surround yourself with people that know what they're doing and are complimentary in terms of their skillset. So Matt and I are great partners because I have the financial expertise, which he lacks and he knows construction well, being a general contractor and also doing development for other people.

I also think it's interesting that people, you know, you mentioned there's low barrier century. And when I told some people. You know, friends of mine, people that I know around town, what I'm planning to do, they look at me and say, how hard can it be? And there's some truth to it, but it's also just completely false.

So yeah, you're right. Anybody can do it. And if you're, if you kind of roll up your sleeves and do things intelligently and. Smart people you'll probably do. Okay. But it's not that easy. It's, you know, municipalities can be notoriously difficult to work with. It's not just, you know, just because you own a piece of land, you're not entitled to build whatever you want to build on that piece of land.

It's a tough process, but it's been super gratifying and fun to do something different and learn about it, which, 

[00:23:54] Atif Qadir: uh, I'll mention this before we now pivot into the big scale is there actually is a place in America which doesn't have a zoning. And building guidelines, it's called Houston. Uh, and 

[00:24:07] Sam Dickinson: it was there 

[00:24:08] Atif Qadir: for, so I think I've mentioned before, I've been traveling a lot in 2021.

I spent November in Texas and I spent like about a week in Houston and I was just so confused by that place in terms of what was built, where, and the sizes of everything. And so I think as much as we probably rail against how restrictive construction is in states like New Jersey, New York, There is an alternate reality.

And I don't know if I want to be a 

[00:24:33] Sam Dickinson: part of that alternate. Well, you know, I mean, there, there's a double-edged sword there. I have family that lives in Houston and we'd go down there for Christmas every year. And I think this must've been that the late, late eighties. And you would drive through Houston and you drive through entire neighborhoods where houses were half built and the market fell apart there.

And you know, that's part of the real estate cycle. Obviously, there's, there's a boom and bust nature. That's not just exclusive to, to Houston, but you know, when you take or take away a lot of the guardrails, you can leave to some extremes like that. Now. 

[00:25:11] Atif Qadir: So let's talk about Peekskill. So Peekskill is a former industrial city located on a major river, the Hudson.

And you spent some time in Bethlehem, Pennsylvania when you were at Lehigh, which is campus right next to the massive factory of Bethlehem steel, also on a major river, the Lehigh, uh, could you compare these two 

[00:25:32] Sam Dickinson: places for us? Yeah, I think they're both kind of fascinating in that they have. Uh, rich industrial history, obviously.

And in both cases, I find it somewhat depressing, I guess, in the sense that, you know, you had areas that were proud, industrial towns with booming businesses and that this, this is just no longer feasible in those areas, which is, I guess, part and parcel with economic development, things change and become more globalized, but, you know, driving.

When I would drive to Lehigh, my college days, you'd get off the highway. I think it's 78 and you'd probably drive about 15, 10, 15 minutes from the highway to the campus. And you would drive past miles and miles of steel mills. And it's basically imagine driving down main street and on the left side, there's residential areas.

And then on the right side, it's steel mills. It's not pushed off in the corner of the town. It's it's part of the town. The town is built around. Bethlehem steel. And I just was always fascinated. The steel mill in Bethlehem was still operational when I went to Lehigh and, you know, you could see. You can see activity, you can drive past and see blast furnaces with, you know, bright orange and red, you know, liquid steel flowing.

So it was really pretty amazing. And fortunately they preserved pieces of the steel mill. So the steel mills that are now closed and they preserved smokestacks and made arts. You know, our museums are facilities out of. I think there's a casino part of it now, so yeah, that's America, but it's uh, so the, the parallel with each scale is that, you know, dotted along the Hudson river in the early 20th century to mid 20th century, we're just industrial factories.

And the river was an important piece of having a factory for transportation. No, sadly, in some cases they would discharge water into the rivers. And so it was just a convenience aspect. And so there's a lot of really cool old industrial properties that still live in the Hudson river and a lot of these towns and, um, a lot of towns like Peekskill or, you know, Beacon's a great example to the north have been, I guess, Forgotten for some period of time, they weren't close to the city or as close as people would want to be to the city to enable commuting.

So you started to see a revival in places like beacon, because a it's a great place to escape from the city, but B it's also. Uh, really accessible location for all things in the wilderness. There's tons of hiking. There's bear mountain, not far from there. And it's not that far from the city. The peak skill train station is an hour north of train ride from grand central, uh, roughly, but these towns have all this old industrial architecture.

Old factory, some of which have been repurposed. Some that had been torn down and, you know, general motors had had a plant in Tarrytown for years. I remember as a kid driving over the Tappan Zee bridge and looking out and seeing minivans rolling out of the factory there, IBM also has 

[00:29:06] Atif Qadir: a 

[00:29:06] Sam Dickinson: offices there, right?

They do. And Armand. So they have a huge campus, uh, not on the river, but up in, in Northern Westchester. Uh, parts of which have been sold off. So there's just a lot of really cool architecture. And now you're seeing a Renaissance happening in those places. So again, using beacon as an example, because Beacon's a little further along the way, they've basically, you know, awaken to the fact that they have this old industrial architecture and put it to new uses building loft style apartments, and.

Beacons, one of the, you know, one of the fastest growing towns in that area, it has a lot of migration from people in New York city in Brooklyn. You see a lot of weekend traffic coming from those areas. So we see the same thing in Peekskill. The property we acquired was an old warehouse building. It sat vacant for 10 years at one point, or maybe even more than that.

And then the Peekskill brewery, which had been operated. Uh, down the street for a few years was growing and ended up moving into that building. They occupied two of the four floors. And part of the plan for us is to help them expand into other parts of the building. So we acquired that building basically 50% vacant, but the brewery has other plans and we got to know the brewery well and support, you know, helping them to get.

So 

[00:30:31] Atif Qadir: tell us a little bit more about the development strategy for this particular property and how you came to decide on that development strategy, because it sounds like the, uh, the big school brewery had some intentions of what they wanted to 

[00:30:44] Sam Dickinson: do to, I think, first and foremost, on the most basic level, what really appealed to us was we just like the location and the architecture.

And, uh, ironically, when we first started looking at peaks, We were there about three years ago, this was the first place we went. We met up with a local attorney and who knew the town fairly well and wanted to get some insight on what was happening. And he suggested we made the Peekskill brewery and that was a little bit of foreshadowing and not coincidentally because Pisco brewery is kind of a staple in the community.

It's a common meeting place. It's right near the train station. So people come up from the city on weekends to go hiking. They all meet at the brewery, bike, cycling groups come up, meet at the brewery. So it was a natural meeting place, you know, so we looked at it in its most basic terms as just a really great piece of real estate and a location in the Peekskill waterfront.

That's kind of detached from the downtown. Okay. So the downtown areas way up the hill and peak scale. And that's where the main street is. The waterfront area is, is less active, but obviously a beautiful location. So, you know, when you go to the, especially to the upper floors of the brewery building, uh, you have great views of the Hudson river.

You're a block walk to the river itself. You're a block walk to the train station. From a location standpoint, it was ideal. The second thing was in buying the building. We said, even if we don't find a tenant for the remaining spaces, or if we can't figure out a plan to generate some revenue with the brewery, from the other spaces, we're going to get a nice yield at a reasonable acquisition price.

So. Just with the brewery in place, we can make six to 7% yields. And so as long as we find some other uses, if the brewery doesn't want to expand, or we can't sign away for the brewery to expand the building, there's, there's upside potential to that. So first and foremost is just, you know, location and attracted basis.

Really. So those were the two really important pieces for us. 

[00:33:00] Atif Qadir: Excellent. And then how did you get involved with this particular deal? Like how did this come to. 

[00:33:05] Sam Dickinson: Yeah. So this is interesting. It was exciting when I got the call from my partner, Matt, and he said, listen, we have this opportunity, the brewery building's for sale.

And obviously knew it. We'd been booking at peak, go for awhile. And it was the first place we ever went in Peekskill. So the owner had a right of first refusal to acquire the building. Uh, but they needed a partner. So. Started a process where they met with a bunch of potential partners who could go into, to acquire the building with them.

Speed dating speed dating. Yeah. So it was important to them because they didn't want to have a landlord who wasn't invested in their business. Not necessarily just from an economics perspective, but just, uh, personally invest in wanting to see them succeed. So we knew the brewery pretty well before we actually met.

And after spending more time with them, we'd love their story. We loved how they pivoted during COVID and succeeded and kept themselves alive. And it's a beloved institution in Peekskill. So we wanted the same things for them as they wanted. And so after spending a lot of time with them, we said, Hey, this is a good fit.

They felt good about it. We felt good about it, but then it became a race against the clock because we had a very short amount of time. Under the terms of the ROFO. So right. If, uh, what was row for right of first refusal. So they had a potential buyer. And so we had to put together a deal in a matter of three months, 90 days to get the deal done, raise money, structure, something with the brewery that made sense for them and made sense for ourselves.

So we got there pretty quickly, and then it was a race against the. 

[00:34:53] Atif Qadir: Okay. And then from that point, so you closed on the deal and give us a perspective of the timeline from you, have the keys in your hand to when the project will be complete and the redevelopment done. 

[00:35:07] Sam Dickinson: Yeah. So we've, we did a lot of work during the period between the contract signing and the closing.

So we brought in design consultants. We brought in engineers, we brought in. Restaurant consultants, who are 

[00:35:23] Atif Qadir: some of those designers and engineers and consultants. 

[00:35:26] Sam Dickinson: So my partner had not had a relationship with a designer who does a lot of dining and entertainment venues and put together a lot of ideas that we can implement.

Improving the existing spaces and also building out the spaces that are not currently occupied. And so just gave some insight and some inspiration into what could be done and what kind of very rough budgets would be to do those sorts of things. And then Matt has a friend named Bradford Thompson who's, uh, James spirit of wording, a award-winning chef, and also now a restaurant consultant.

He knows how restaurants run and operate. And we had him come in to look at what the potential was for this, and also to frankly, give a rubber stamp on the operators. And so we had a sense that these were guys that knew what they were doing. They were very passionate. Most importantly, he came back with very confirmatory feedback that these guys are doing the right things.

He came back with some important changes that could be made. Not earth shattering, but things that could make the business better, but you know, as developers and guys who aren't the restaurant business, we wanted some confirmation that they knew what they were doing. So bringing in those professionals early on was not only helpful to get us confidence in closing the deal, but also to help lay the groundwork for what was going to happen.

And so getting back to your question, we have roughly a 60. Timeline that we're working on. And that is comprised of a few things. So we had some base building work that had to be completed. There were things that the building just needed that hadn't been done by prior ownership, things like elevator work, exterior work, plumbing work.

And so those sorts of things are going to get done first. And then the next order of business for us is going to be, uh, working on improving some of the existing spaces. Yeah, they occupied the first floor, which is a taproom. The second floor is a dining room and kind of a small private party room. And those just need a little bit of a refresh.

But the biggest thing that happens with them in terms of the business during COVID was that they pivoted to converting their outdoor parking lot into an outdoor. Oh, awesome. So the beer garden turned out to be massively successful, but it was done on a kind of a temporary basis. So we're going to look to work with them to make that permanent.

And that's just a huge opportunity for them to have additional space, to generate more income. So we want to make that permanent. So those are the things and the next six months we're going to be focused on. Once we get that done, things are running smoothly. We're going to look at options for the third and fourth floor, which is going to be a surprise.

I don't think it's going to be surprising to people, but we're just necessarily talking yet about what our plans are for the rest of that building. 

[00:38:32] Atif Qadir: I got it. Okay. So sequential. So when the listeners want to come up to see the project, they should come up around July 4th. Do you think 

[00:38:39] Sam Dickinson: that gives you six months?

Yeah. Well, I think there's going to be a lot happening before that and certainly the beer garden. We hope to have that ready to go and completed before, you know, it starts to warm up in this. Excellent.

[00:38:59] Atif Qadir: So I'm going to pause here to let our listeners know that we will be having Andrew reckoned strike of housing and neighborhood development services on the show. Next month, he is the second affordable housing developer we'll be having on the show. And I promise I will help you understand how to make tax credits.

Right. Again, I had two American building podcasts to check out past episodes and to submit. To the pod via any of the major listing platforms, including iTunes. Speaking of valuable real estate incentives, Redis is a new technology company that is innovating around the age old problem of financing. Real estate deals.

This machine learning driven platform is an end to end solution for real estate professionals like Andrew, Sam, and myself, looking at. The a hundred billion dollars of tax credits and other real estate incentives that are given out every year in the U S learn more about it@redis.us. And finally, I renovated my parents.

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so taking a step back from this deal, talk to us about how mixing uses in your redevelopment projects work and why you think it's a good idea. 

[00:40:32] Sam Dickinson: Yeah. So we've looked at mixed use from a number of. Angles. So one is actually next use within one property. So in our white Plains project, there was a period of time where we actually looked at mixing workforce housing together with medical office, which is not necessarily conventional people have done it, but there was a lot of interesting reasons to do that for that project, because it started off as a.

Because the staff has spelled, right? So having staff nearby, you have a captive audience of potential tenants. So that, so that obviously makes a lot of sense. But additionally, one of the things we found was that we marketed the property to medical users and weren't in a position to begin development and construction of the property until we had a tenant.

So it's this chicken and the egg sort of situation. So one of the thoughts we had was if we went to a mixed use type of concept, we could have perhaps 50% of the building as multi-family. And so that changes the calculus in terms of getting financing, changes the calculus in terms of obviously the returns to the property.

So, and then it also just creates diversification, but more broadly, we do like to have. A mixture of different uses in our portfolio because although a lot of people think multi-family is the safest asset class. There's also a ton of interesting opportunities outside of multifamily. And so when Matt and I started healer Mark Wood, we didn't necessarily have a core competency that we wanted to focus on.

We just wanted to be opportunistic. And so. The medical office building that was the highest and best use and made the most sense that is now become a multi-family building because we went through a rezoning process and now it's actually a better project for that. Although it's taken a longer period of time to get there.

So while we love multi-family, I think the use case for peak scale and the investment case is equally compelling because here you have. An asset with a operator that's been in place for 13 years and has survived probably the worst of shocks that you can have to a business and COVID and income through it, hopefully stronger.

And this is an asset where we love the operator. We love the going in yields and love the upside opportunity. Well beyond. 10 20 years down the road, if there's a change in use and we can do something different with it, we'd love the location. And so we're always going to be supported by just the land value of the property.

We've looked at a lot of other things. I think industrial has, especially in Westchester where there's not a lot of industrial and there's a need for industrial. I'd love to do something there. And so we're, you know, wide open to doing a range of different uses. 

[00:43:35] Atif Qadir: I think particularly what I would say is that from my experience, multifamily is the one that tends to be the easiest to build because people understand what an apartment is, what a layout is.

But I think that also means. Certain high growth markets may be prone to swings in supply that will compress return. So for example, during the pandemic, particularly in 2021, the Nayarit residential index for class say, which is the top 20 MSS across the country was negative 22. And I think putting all your eggs in that basket of class, a luxury multi-family is an incredibly dangerous proposition.

And I liked the way that you're thinking, which is. Their skill sets are different, but also sometimes the skill sets are rather the same in being able to get a multi-family building entitled versus an industrial. And I think that it probably makes for a lot more interesting of a company and an endeavor to be able to work on different, different projects like that.

[00:44:36] Sam Dickinson: I also like the fact in, in white Plains, one of the things I like about what we're doing is. There's just been a complete boom in luxury, basically any new properties, just being branded as luxury. And we're not really doing that. We're doing workforce housing, they're smaller spaces, and they're meant to appeal to somebody that works at a hospital that wants to maybe work a 12 hour shift and come home and have a clean, safe, modern place to sleep.

But doesn't want. Spend as much as you'd spend in a luxury building. So people in our building are going to be able to save five or $600 versus a comparable studio at another building. And that's meaningful money to most people, especially people in this income bracket. If you're saving five, six, $7,000 a year, furthermore, at this point in the economic cycle, if things start to turn and go south.

We think that we're going to have much less price elasticity than other products we'll have. In fact, I think we'd be a beneficiary of people saying, okay, I can say it's five or $600 a month. We're going to get traction there. So I like the fact that we're different and doing something that has some insulation towards economics.

[00:45:57] Atif Qadir: And then you mentioned earlier some of the learnings, the challenges that you've had with getting projects entitled, and now looking back over the four years and the various projects that you've worked on, what are some of the pieces of advice that you would have for new developers on getting projects approved?

[00:46:13] Sam Dickinson: Yeah, so I think one thing that's really important, it's just knowing the municipality that you're going into. I think it's easy to fall in love with a location and see a town. We're a city or a village that looks like it has interesting opportunities. We've spent time in a lot of other towns along the Hudson river or in Southern Westchester where there's a lot of charm and, you know, we've seen a couple of potential sites that could be compelling.

And then when we start talking to people that are active in development locally, Yeah, you get what the real story is. And so I'd rather find out early and do my homework and talk to people that are active in those markets. So I'm not going to name the towns, but there's towns lower Westchester along the river, that a very basic small multi-family project.

I can spend three years in front of a planning work. And so that's just, you know, the brain damage involved with that and the, and the costs just from a pure economic standpoint, it's just not worth it unless you're doing a huge project. You need to have. In order for that to be worthwhile. So if you want to do, you know, we've looked at things that are maybe a 15,000 square foot project where you'd have maybe 10 units or 12 units, and it's just not worth the time.

So doing your homework and knowing the municipality that gets back to the conversation we had earlier, just, you know, spending a little time watching. The meetings and talking to people that are active is super helpful. A lot of, not a lot, but there's a, there's a number of towns in Westchester now that are coming out with form-based codes.

And so they're effectively rolling out the welcome mat to developers and. Those are the types of places where it's going to be a lot easier to get your project approved. And so if you can find places that you like that have interesting opportunities, those are a lot easier, obviously. So 

[00:48:14] Atif Qadir: in Connecticut and in New York, are there particular towns that you really like spending time and that you think have opportunities.

[00:48:24] Sam Dickinson: Yeah. So obviously we're pretty bullish on Peekskill Peekskill. Uh, you know, one of the reasons we started to look at Peekskill is sometimes when you start to see a flood of activity, it's it's too. So you'd need to roll the dice a little bit sometimes and make a bet on a place that you think is on the com.

I hear Brooklyn 

[00:48:43] Atif Qadir: is really, really good these days.

[00:48:48] Sam Dickinson: We're trying to find a nev. Everybody talks about the next Brooklyn. Oh yeah. This is Brooklyn 20 years ago. I mean, it's true. Right? Like people say that all the time. So this, you know, so, you know, when you look at places like Peekskill, we went up there and we said, wow, this could be kind of binary. Right?

Like. It can be really tough if things rollover, but it could really be, you know, a home run if you get it. Right. So one of the things that I think just gave us confidence was post COVID seeing that people's behavior patterns in terms of where they're willing to live and where they want to live has changed.

And so being at a place like Peekskill, you're not so far away from Manhattan that you can't commute. It's still roughly an hour. It's opened up the opportunity for people to be further away. So we like places like Peekskill for that reason. You know, another place that we've spent a good amount of time and is, uh, is poor Chester support.

Chester is in a really interesting location. It's basically kind of right on the New York, Connecticut border all the way on the Eastern part of Westchester. So it's right on parts of it border the long island sound, but it's sandwiched between. Greenwich and Ry two of the wealthiest towns around here.

So you have a lot of kind of residual benefit coming from those towns and have a lot of spending from those towns. And then it's competitively priced relative to those towns. It's also a very short ride to New York city and it's got the Capitol theater. So the Capitol theater, you know, is it is a well-known historic theater.

Best known for its performances by the grateful dead back in seventies, eighties, tons of shows is one of the, you know, favorite places to perform in terms of small venues. So it's got a pretty rich history and they get a lot of really cool acts. So people from around the area loves to go to port Chester to the Capitol theater.

So in Porchester just put in a form based code. So now they're getting with the times it was a really tough place to do. We're still looking for something to do in Porchester. So we'd love to find an opportunity there, but we love the potential there. You know, you see what's happening in big cities, like white Plains and Yonkers and new Rochelle.

Those places are exploding and Porchester until the last year or two it's kind of been left behind. But now that with the foreign-based code, A lot of projects that are getting approved and you're actually starting to see people finally building. Yeah, those are a couple of the places we obviously love white Plains.

We'd love to find other places in white Plains. We're in an opportunity zone and white Plains. So our, our project there's actually to be an opportunity zone fund. We'd love to find other opportunities, zone projects in white Plains, same thing with Porchester with Hosey. So those are places that we find really interesting, done some stuff in your shell.

You and I worked on some things in new Rochelle together. New Rochelle is another town or city actually with a form-based code. And so they make it really easy to. Yeah, projects approved. They're starting to see a lot of construction. They've approved over 6,000 units. I'd say maybe a third of those have been actually built so far, but a chunk 

[00:52:09] Atif Qadir: of that is with a RXR, right?

[00:52:11] Sam Dickinson: Yeah. So RXR was named the master developer and I think they're doing over a billion dollars. New projects there. So, you know, it's, it's interesting and transformational for a place like new Rochelle, which for a long time, just with. And for decades, you didn't see anything happening. And now it's really booming.

I mean, you know, seeing a lot of buildings going up all over. 

[00:52:35] Atif Qadir: So it sounds like some of the things that you've mentioned or beautiful, interesting historic buildings as assets, really strong infrastructure in terms of transportation and access in and out of places and Uranus to a major metropolitan area.

And then also. Relatively welcoming or a changing in title. Scheme in terms of, uh, city, government being more welcoming to developers. And I think that some of those dynamics exist, uh, not too far away on the Delaware river between New Jersey and Pennsylvania. So I spent a little time there. Those are towns like Frenchtown, Milford, and Stockton, New Jersey, new hope, upper black, Eddy, and Pennsylvania.

And I think that that's just an example that there, the dynamic that you described is something that. Probably find all across America and little pockets of places that I meet. A lot of those requirements that you're talking about, which I think makes the idea of developing really fascinating. 

[00:53:35] Sam Dickinson: Yeah. I think it's interesting that you mentioned those towns you've mentioned are not household names, right?

When you look at suburban development. So th the fact that we're talking about that in itself, I think is pretty fascinating. There's just been a, a much greater willingness to look at all sorts of areas. When I think about development in the New York city area, you know, we're obviously focused on Westchester and for people that don't know Westchester, right?

Westchester is kind of 30 to 50 minutes north of New York city, 30 to 60 minutes, something like that. So it's a true suburb, but once you start going further, It's like north of interstate 84, right. You're going to places like Fishkill and those types of, you know, those places are booming now. And I think it's interesting that that's part of the conversation as are the places that you just mentioned.

The 

[00:54:25] Atif Qadir: reality is that for the number of times that people have told me before the pandemic, oh, I just bought a piece of property in Hoboken or Jersey city. And I'm thinking of doing like a four year. Yeah, you are. And I think now that people don't, obviously don't have to go into Manhattan five days a week or two, a hive clip that places like these, you realize that the quality of life is so amazing.

For example, you mentioned a theaters and dining, all these other things. Make it such that being two and a half hours away, two hours away, isn't a big deal. If you're only going into the city once a week, that's it. So, or zero or weekends, 

[00:55:07] Sam Dickinson: which might be, you know, on that point, I have friends that are looking to buy homes right now.

And there's absolutely a willingness if even if you're going three days a week or two days a week in this. It changes the, the mathematics in terms of where you're willing to live. You know, people can tolerate doing two or three days with an hour and a half train ride each way, which is, you know, that's not a short train ride on 35 minutes by train to grand central, you know, so it's totally true.

I mean, you know, that's definitely changed the. 

[00:55:41] Atif Qadir: And I think in that regard, it's positioned Sam and your firm extremely well for the years ahead. So thank you so much for joining us today on the American building podcast, Sam and listeners. If you want to hear the behind the scenes stories of how I conic buildings in our country, we're designing.

Subscribe to this podcast on Spotify, iTunes, Google anchors, Stitcher, or wherever you like to listen, rate and review us on iTunes to help us reach a wider audience and follow us please on Instagram. And that's at American building podcast and we all know real estate is a tough industry to make it. So how can professionals as.

And make a name for themselves in today's world. Hear from me, the team at Michael Graves and Redis, and many of our spectacular guests, just like Sam, on what we did to make it where we are. Grab our exclusive guide seven tips on how to stand out in your field@americanbuildingpodcast.com. Finally, we live in the richest country in the history of humans.

We must reach out beyond the boundaries that we see and the boundaries that we create in order to help build homes and communities today, Sam and I have made donations to autism speaks, which gives hope and support to families that are dealing with the challenges of autism. I encourage you our listeners to support their worthwhile work as well. My name is Atif Qadir and this has been American Building.