#957 Chris Powers On Building A Real Estate Investing Machine

Chris Powers is the Founder & Chairman at Fort Capital In this conversation we talk about real estate, interests rates, the macro environment and how to build a great asset management firm. ======================= Since 2018 Copper has been at the forefront of institutional digital asset development. From award winning custody solutions, to creating the first truly off-exchange settlement function, Copper pioneers technology, products, and services, in lock-step with a rapidly changing world. No other infrastructure provider covers as many assets, across as many exchanges, with the speed and security that Copper can offer. To learn how Copper helps the world’s largest institutional investors secure their digital assets, head over to copper.co Copper - the unfair advantage. ======================= Compass Mining is the world's first online marketplace for bitcoin mining hardware and hosting. Compass was founded with the goal of making it easy for everyone to mine bitcoin. Visit http://compassmining.io to start mining bitcoin today! ======================= Bullish is a powerful new digital asset exchange built for institutions that delivers the innovations of DeFi in a regulated environment. The Bullish Hybrid Order Book pairs the high-performance of a traditional Central Limit Order Book with automated market making. Powered by deep Bullish Liquidity Pools, backed by the multi-billion dollar Bullish Treasury. So, you can trade with certainty and at scale across variable market conditions. Learn more at Bullish.com or follow @Bullish on Twitter. Because the future belongs to the bullish. *Not investment advice. Digital assets and cryptocurrencies are high risk products. Consult your professional advisor before dealing in them. Bullish’s services are available in select locations only and not to U. S persons. Visit https://bullish.com/legal for important information and risk warnings =======================

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Chris Powers is the founder and chairman at Fort Capital. In this conversation, we talk about everything from real estate to interest rates, the macro environment, and how to build a great asset management firm. I really, really enjoyed this conversation with Chris, and I hope you guys enjoy it as well. Before we get into this episode though, I first want to talk about our sponsors. Today's episode is brought to you by Copper. Since 2018, Copper has been at the forefront of institutional digital asset development. From award-winning custody solutions to creating the first truly off-exchange settlement function, Copper pioneers technology, products, and services in lockstep with a rapidly changing

• 0:47Anthony Pompliano?

  world. No other infrastructure provider covers as many assets across as many exchanges with the speed and security that Copper can offer. To learn how Copper helps the world's largest institutional investors secure their digital assets, head over to copper.co. Again, Copper, the unfair advantage. Check them out at copper.co today. Next up is Compass Mining. Compass Mining is the world's largest marketplace for mining hardware and hosting. With Compass, everyone can mine Bitcoin. Their team makes it easy to start mining wherever you want, at home or in one of their 23 hosting facilities around the world. Through the Compass Marketplace, retail miners can access mining hardware with similar prices and purchase plans as the world's largest mining

• 1:31Anthony Pompliano?

  companies. Compass miners own their machines, they choose whatever mining pool they want, and they mine directly to their own wallets. Miners who don't want to host their machines can order ASICs directly to their doorstep. Simple and low-cost hosting agreements coupled with best-in-class customer service are the reasons why Compass is the simplest and most popular way to mine Bitcoin. Start mining your own Bitcoin today by visiting compassmining.io. Again, compassmining.io. Go check them out and let me know what you think. This episode is brought to you by Bullish. Bullish is a powerful new digital asset exchange built for institutions that delivers the innovations of In a regulated environment, the bullish hybrid order book pairs the high performance of a

• 2:14Anthony Pompliano?

  traditional central limit order book with the automated market making powered by deep bullish liquidity pools backed by the multi-billion dollar bullish treasury. So you can trade with certainty and at scale across variable market conditions. You can learn more at bullish.com or follow bullish on Twitter because the future belongs to the bullish. Now, this is not investment advice. Digital assets and cryptocurrencies are high risk products. Consult your professional advisor before dealing in them. Bullish's services are available in select locations only and not to US persons. Visit bullish.com/ legal for important information and risk warnings. Go check them out at bullish.com or follow at bullish on Twitter.

• 2:53Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 3:16Anthony Pompliano?

  Chris, how are you?

• 3:17Speaker 02

  I'm great, Pomp. How are you doing?

• 3:19Anthony Pompliano?

  Dude, I'm so excited about doing this. You, I already know you're an expert because you got the headphones, the microphone, like you're a pro. Let's do this maybe. To get started, I think it'd be really interesting to kind of talk about the type of real estate that you guys buy. And my understanding is that there's really kind of two different types, kind of this class B, commercial real estate. And then I think you also do some self-storage, but I may be wrong on that. It's like, talk us through just kind of the, the various types of real estate you could purchase and why you're so focused on the class B stuff.

• 3:50Speaker 02

  Yeah, it's an honor to be on the show. We, we buy class B industrial. And so there's class A and there's class B. And we really don't do any self-storage, but class A is, the best way you can think about it is it's the newer built stuff. This is the stuff that is, that Amazon's going into that's a million square feet, that the large e-commerce businesses and the large companies are taking, large clear heights. These are huge buildings that are being developed. Class B is stuff that was built in the 60s, 70s, 80s, 90s. And by nature of when it was built, one, we know it's older. But two, these are the buildings that are in the middle of the city. When they were being built, they used to be on the outskirts of the city.

• 4:34Speaker 02

  But now that we're, you know, 30, 40, 50 years later, this is in the middle of these cities and, and provide an incredible service to these mature neighborhoods around them. So I can start, like, that's a good foundation for what denominates Class A versus Class B.

• 4:49Anthony Pompliano?

  Got it. So when we think about this, why is Class B so attractive to you? When people hear that, oh, Class A, that's where the Amazons and like all these businesses are going, million square feet, like, that's incredible. What is it about the Class B inside of these kind of city or urban areas that makes it such a great opportunity or, or kind of investment case for you?

• 5:08Speaker 02

  So you hear the word last mile all the time, last mile, last. These really are the last mile. In fact, these are the last quarter mile. When you think about these being built in the 70s, 80s, 90s, they have thousands of homes within a mile of their radius. They have mature infrastructure. They have police forces and they have fire systems and they have everything you would need all around them already. Number one. Number two, the tenants that these buildings, the tenants in these buildings, they're not necessarily Amazons. These are the companies that provide the material for these cities to grow. These are the cities that provide the warehouse space for medical providers to hold medical

• 5:51Speaker 02

  equipment. These are the, these are the tenants that are often contractors doing the work on the buildings and the roads and the streets and everything that you can think of in a society. I mean, we're so, in 2022, all we want to talk about is the internet, the internet, the internet. And while the internet's a big thing, most of your life is actually denominated by the physical world around you. The studio that you're sitting in, the materials that you're using, the food that you eat, the healthcare that you get. And so when I think about Class B industrial, a lot of these businesses that occupy these properties are the true American businesses that keep America running.

• 6:30Anthony Pompliano?

  Yeah, it's fantastic to kind of hear it articulated that way. When you start to think about investing in these assets, I think what makes you all so special is you've really built a machine. Take us back to when you started Fort and kind of what was the initial starting point? And then how did you actually like tactically build this into such a machine where now you can scale so aggressively?

• 6:53Speaker 02

  Yeah. I think something that's been important to me is I wanted to build a business that could survive me. And that meant there had to be a machine in place that if I fell over tomorrow and never came back to earth, there was something that that would survive me. And so what was important to me really early on, I had a mentor tell me, and this is the case for any business, is your job should be to make yourself less and less relevant to the business, or you're not really building a business that has enterprise value and durable value. You're building a business that really revolves around you, which isn't a bad thing. People make a lot of money building businesses around themselves. But I didn't want that. I wanted something that when I was out doing whatever I'm doing, there was something working.

• 7:35Speaker 02

  And so I think it first started as a mental decision that that's what I'm going to do. I don't think a lot of people even get there. But once you get there, you start thinking about your day to day business as, how do I do things that make myself less valuable to the business? It's not that I'm not valuable to the business, but I truly could fall over tomorrow and never come back and deals would still get done at Fort. And then really starting to look at businesses that have done it incredibly well. I think one of the things that if I had a strength is, and I would encourage more people to do this, is look at companies that have already done what you want to do and then try and emulate them and do the things, you know, their best practices. Everybody's different, every culture is different.

• 8:17Speaker 02

  But there's a lot of blueprints out there because real estate is an old industry. It's the largest industry in the world, like you said. You know, you don't have to look hard to find companies that have done this. So my goal was how do I build a company that can find deals, underwrite deals, buy deals, manage deals? Lease deals, everything without me being involved in any one of those things. And that really became the core focus of mine and I eventually hired a CEO. So I'm now the founder executive chairman. I have people that run every one of those things I just mentioned, leasing acquisitions, financing, kind of you name it. And the biggest thing is they're all incentivized to do their job, do it well, do it with the team and keep the company growing.

• 9:02Speaker 02

  And you know, our friend Charlie Munger says, or maybe it's Warren, show me the incentives, I'll show you the outcome. And that's really been my entire focus over the last five years is replacing myself and building a machine that could live on beyond me.

• 9:15Anthony Pompliano?

  So when you think about this and you get started, I think it's a really important point of like, hey, I want to build a machine that survives me, right? I think that that's like a great call out. When you get started, is it just like, hey, we go do one deal and you are basically 100% of the team and over time you just organically grow? Or is it something where in order to do this successfully, you actually raise outside capital from like an equity standpoint, you say, okay, to do this correctly, you have to start with the team and almost lessen the dependence on you on day one. Like, how did you think about kind of where you get started with how dependent the business is on you? And then the transition to where you are now, where it's basically not dependent on you at all?

• 9:55Speaker 02

  Yeah. So as I recall, you worked at a hedge fund, am I right? Or a big financial firm? So you'll relate to this. A lot of people start in the deal business or the investment business because they're good at investing in something. But being really good at investing in crypto does not make you good at building an organization that has an HR department and an accounting department and all of these people. They're actually two completely different things. And very few people actually realize that. So I'll now I'll speak about real estate, but you can relate this to almost any investment type of firm, no matter what you're doing and investing. Most people get in, they're really good at doing deals. They start, they do three or four deals.

• 10:38Speaker 02

  Maybe they hire an assistant and a couple wingmen to kind of help them do deals. But the key thing here is the person leading the charge is really a deal person. They're great at investing in real estate. They're great at finding deals. Then all of a sudden they look up one day and they're like, oh, man, we have five deals. All of my time is consumed now managing these deals, managing the few people that I have. We don't really have a culture. We have no processes. We're just deal people. That is where most people stall out.

• 11:07Speaker 02

  Or they don't really know that they're trying to build a company. So they stay that way forever. They buy a deal, they sell a deal. There's an inflection point that happens when you go, I don't want to be just a deal person. I want to build a deal company. And the backbones of any company pump are the same in a lot of companies. You have an accounting department, a finance department, an HR department. All the things that are like, I don't want to say the boring parts of the business, but they're the administrative parts of a business that make businesses run. And in fact, they become the largest part of the business. So my point in saying all this is there comes a fork in the road where you say, do I just want to be this kind of deal shop with a few people? We don't really have a ton of processes. We're just doing deals.

• 11:51Speaker 02

  And if I go away tomorrow, the whole deal, the whole business goes away. Or do I want to build a company that does deals? And making that distinction is a critical juncture in the road. Not a lot of people do it. And that requires hiring a person or partnering with a person like my, who's now my CEO. All he worked on for six years is actually building a company. And we just so happened to be buying a bunch of real estate. But there was a conscious decision. We're going to get really good at doing deals, but we're going to build a company.

• 12:22Anthony Pompliano?

  So when you think about this, let's talk about operationally, like what that entails, right? So yourself and the now CEO, when you think about the activities of building the company, is this the activities of hiring, building systems, you know, performance reviews, incentive design, like those types of things? And then you allow the quote-unquote "employees" to go ahead and actually execute the deals, but you and the CEO weren't actually looking at the deals? Or like, how do you think about, you gotta get deals done, right? And given that, kind of, you were there on day one and obviously have an interest in real estate, how much of your time maybe did you devote to actually getting deals done and kind of building a track record versus the company building? And then it sounds like it's basically evolved to, I don't know how involved you are in the deals today, but most of it is probably company building activities?

• 13:06Speaker 02

  So when we started, again, I didn't, when I started, I didn't really know there was this fork in the road. It kind of hit me like a ton of bricks. The truth is, there was a period of time where we actually had people that left our company that said, "We feel like y'all are more interested in building a business than actually doing deals." And there was probably a two-year period where it probably looked like that. We spent a ton of time on just like company building. We had done a lot of deals. We were still doing deals, but not a ton. But there was a conscious decision that my partner and I kind of split for a couple of years, not split away from each other, just in the company, where I was focused on finding deals, bringing deals in, working with brokers, kind of doing

• 13:47Speaker 02

  business development activities. And he was back at the office, setting up processes for how we do due diligence, how we source opportunities. He was helping build our tech stack. We have an operating system that our whole business works at. We, how our marketing department works with property management and works with our acquisitions team and works with the press. How our accounting department takes in financials monthly from properties, gets them ready to go out to investors. I mean, all these different things that are happening. And he was really critical in going, "I know all the parts of the business. I know what every team is doing, but how do they all work together?" Because again, we didn't want to create this business where it was all these silos, where like acquisitions didn't talk to finance.

• 14:31Speaker 02

  Finance didn't talk to construction management, construction management didn't talk to property management. And so then when it gets into how we do deals, it's not really siloed. The truth is, when you're doing a deal, every deal requires, has financing requirements. You have to raise equity, raise debt. It has leasing requirements. Who are the tenants? Who are we going to lease to in the future? What does the market look like? Marketing, how are we going to market this property and get it out to the market? Accounting, what are all the accounting functions needed for this property? And so where a lot of companies, the only people that sit in investment committee are the quote unquote acquisitions or investment professionals. What we realized really early on was it was kind of crazy to do this whole deal.

• 15:12Speaker 02

  And then half the company was surprised at closing going, hey, guys, here's this new deal we've been working on for six months. And so now at Ford, at least, if you go to look at our deal team and our investment committee, the head of every department's in there because they're all going to be impacted. And so that again is just something over time that while it sounds simple and practiced, if you go ask a lot of, maybe I would call less mature real estate companies, they're nowhere close to being able to do that.

• 15:38Anthony Pompliano?

  Yeah. When you think about this, you mentioned a operating system, which sounds like it's some sort of technology product that you guys have built in-house. Tell us a little bit of more about that. And do you consider yourself a real estate investment firm, a technology firm, a little bit of both?

• 15:52Speaker 02

  Yeah, I would say a little bit of both. I think we're a real estate company and we're looking for every advantage to use technology to basically operate more efficiently. So we're not in the metaverse. We're not doing all these crazy technology things. But we are using technology to do jobs a lot better. And so an example of the operating system is how we, is how we work. It's how the process of the company works. And at Ford, you actually can't do your job outside of the system. If you try doing things outside of the system, you're not following the process. So one example would be when we go to buy a deal, we have a process in our Ford operating system called Deal Launcher.

• 16:34Speaker 02

  There are 300 jobs that need to be done across the buying a piece of real estate. All the due diligence we have to do, working with the bank to get loans, raising the capital, preparing the subscription documents, getting everything over the title company. All this stuff is redundant. It happens each time, but it's basically a checklist. And so we go in, we press one button and 300 jobs, we call them jobs, get distributed to everybody's inbox. And depending on who you are and what your position in the company is, it says, do this thing. And there are some jobs that, once they're completed, trigger another job to happen. So, you know, you might not, um, you know, do something at a bank until you've at least gotten a bank term sheet.

• 17:19Speaker 02

  So as soon as we check off that we have a bank term sheet signed, we press complete, maybe a new set of jobs launches. But we're not having to guess what we have to do each time. We've built into the system, basically this checklist that works with us. So that's one example. So we're never dropping the ball. And when you imagine having three, four, or five deals that you're buying at one time, there's thousands of one-off little, what we call jobs happening. And a job is just something that needs to be completed. And we don't ever want to miss those things. The other part is this, if somebody leaves our company, and what you often find at a lot of companies that don't operate like we do is you're like, well, what was that person doing? You can go dig through their email and you can find all that they had going on.

• 18:04Speaker 02

  Maybe there's a CRM and you can go look at everything they had going. But the new trainee or the new person that's going to replace them has to kind of like learn this whole world of what this person is up to. At our company, you would just log into the set of jobs that that person had ongoing at that time and go, okay, here's like the 30 things that they were working on the day they left. And it's easy for somebody to pick up and read through that and figure out what they should be doing. And the last thing I would say is each job is very detailed. So it would say, hey, call title company, get earnest money over. Okay, check. I mean, these are small things, but there's a million little things that happen.

• 18:43Speaker 02

  That's what great companies do well. They do a million thing, little things really well, not five thing, five huge things really well. All a great company is, is an amazing process and operating system as far as I'm concerned.

• 18:55Anthony Pompliano?

  Yeah, that's a great mental framework. I think you mentioned earlier incentives. And one of the things that's very unique here is that most people who are good at deals and like doing deals, they understand how to kind of operationally get the deals done. But also there's usually great financial incentives at place for getting those deals done and doing them well. You see this in fund managers across asset classes and then also just individuals who do them as kind of solo investors. How do you think about incentives inside of an organization like Fort where you're really building a company? But also you're almost competing with opportunity costs for the individuals who run either departments or work on individual deals. Are there any lessons learned there over the years of kind of how to design incentives correctly?

• 19:39Anthony Pompliano?

  And how much of it is based on one's individual contribution versus maybe like team value creation?

• 19:45Speaker 02

  Yeah, I'll give you three quick examples. The first is we implemented a rolling bonus, which you find at a lot of companies is everybody waits till the end of the year. They get their one bonus and then they're out. We said, how do we want not just give one bonus a year? Where we can give lots of bonuses, but how do we create an incentive to where people aren't waiting for that one time a year before they leave? Well, first of all, you have to create a great culture. I think that's first and foremost, but assuming you've done that, we started what's called the rolling bonus. So Pomp, if I gave you a hundred thousand dollar bonus, you don't actually get it all at once. It goes into your bonus pool. And every quarter you get 50% of whatever's in that bonus pool. So you'd get 50,000 the first quarter. Assuming you would earn no more bonuses the next quarter, you'd have 50,000 left in there.

• 20:30Speaker 02

  You could take out 25 of that. So you're always get half of what's in there. So there's a rolling bonus. So there is no, there is never going to be this one time gigantic payout at Fort that you take your money and run. That doesn't exist. So that's maybe one incentive that keeps people more aligned. Number two. What you find, especially in real estate, is you hire all these acquisition people and they get this huge sum of money every time a deal closes. But then they don't have to operate the deal for the next five to 10 years while you own it. And in fact, there's this whole team that's doing all this work on the deal, but there's no one-time bonus for them. So what you find is it kills culture when there's a few individuals making a lot of money. And whether you could attribute value to it or not, the team often looks at it as

• 21:15Speaker 02

  that person made so much money by playing golf with one guy one day, got a deal done, made hundreds of thousands of dollars. And who knows how the deal is actually going to perform. So what we said is, there's no more acquisition fees all going to one person. There's 15 people that work on deals when we close. Everybody's going to get a piece of the acquisition fee. So that's maybe another example is, how do you not create situations where few key individuals make all the money and it kills the vibe for everybody else in the company? The third, and this is, you know, I think this is attributable to almost everything in private equity. All of our members on our team get a piece of the promote and it vests over five years.

• 21:56Speaker 02

  So of course, if a deal buys and sells within five years, it fully vests. But if it doesn't, they earn a fifth of their promote. Whatever, if I gave you a hundred dollars worth of promote, you get $20 of it a year until it's fully vested in five years. So there's nobody that could come join the team, get in a bunch of deals and take off. Everything vests. And the way our policy works is as long as you're leaving on good terms and you're not leaving for something you did illegally, you'll fully vest in whatever you have. And whether you're with us or not, you're still a promote holder. So we just tell our people, long-term, you will get cash-rich, but you'll get promote wealthy here. You're not going to ever come and work for Ford, have a banger year where you make so much money that you could possibly leave. But if you talk to our people that have been with us five to 10 years, they've become very wealthy.

• 22:41Speaker 02

  They're in 30, 40, 50 deals, getting a point here, a point there. And I think that's what people want long-term is security. And you know as well as I know, when you give a lot of people a lot of cash, they blow it. But when you give people a way to kind of build wealth, they don't have any choice and they actually thank you down the road.

• 22:58Anthony Pompliano?

  Yeah, it's so fascinating to kind of see how you're basically giving people the upside, but you're structuring it in a way where it does align the incentive for a kind of more long-term thinking. One of my questions, hearing you describe some of the incentives that you've set up is, what is the conversation with the acquisition people who say, hey, I could go somewhere else and just get that one-time big payment and keep majority of it for myself, rather than kind of share it with the team? Is it that self-selects people out of the process and only, you know, certain types of people come work at Fort? Or what has that experience been like, where it's obvious why it's a good thing for kind of the rest of the team, but what about the people who, if they work somewhere else, got those big payouts?

• 23:39Speaker 02

  Yeah, I would tell them, and we tell this to people all the time, there's definitely a place you can make more money. What I think people learn as they move on in their careers, look, if you're 20 in your 20s, you don't have kids or a family yet, it's easy to be greedy and bounce around from place to place. But I would tell anybody, no matter what position or what you're being paid, the more you bounce around, everything is compounding in your life. Every time you stop a job and start a job, you've stopped compounding in one way or the other. You have to get to a new company, meet all new people, get them to trust you. All these things have to develop that take years. They don't take weeks, months, they take years. So, the second part is, if you build a reputation that you're just going to hop to whomever's going to pay you the most, that becomes your reputation.

• 24:22Speaker 02

  And there's a lot of companies that just won't hire you over the long term. And again, there's nothing wrong with chasing the dollar, but that peters out the older you get. And the truth of the matter is, you know, you look at like a Goldman or maybe a Blackstone, like there are cultures where you just go, everybody knows the incentive is just make as much money as possible, burn out whenever you burn out, and move on to the next thing. And we just kind of tell people upfront, that's not what you're going to get here. And so if that's what you want... Go somewhere else and I would like my, my thing I always say in culture is culture of a company is what you're willing to accept. And a great culture repels away the people that don't deserve to be there and attracts the people that should be there.

• 25:06Speaker 02

  And it should naturally kind of do that. And so what we tell anybody is if you want more money, there's a place to go. What they often find out is they chase something that seems too good to be true. They're bouncing around jobs and then they look up five years down the road and they've done all this kind of moving around and chasing the dollar. And they're actually not that better off in the long run. They haven't let things compound. And when they show their resume to employers, it's like, hey, look at me. I bounce around every two years looking for the next paycheck. That gets old after a while.

• 25:39Anthony Pompliano?

  Yeah. Talk to me a little bit about your relationship with investors. So it's very obvious that you've been thoughtful in terms of the incentives for your team. How do you think about kind of investor relations and are you doing anything unique there from an incentive standpoint?

• 25:54Speaker 02

  We'll raise $200 million this year from over 700 individuals.

• 26:00Speaker 02

  We have, we, our incentive is to treat them amazing. Real estate is a really expensive game. And so we realize, everybody says, oh, your tenant is the customer. I actually believe our investor is the customer. Here's why. I think anybody, and people say this and they're like, oh, it sounds so cliche. I would rather lose my money than my investors' money. And I think any great GP, no matter what industry you're in, that is the way they look at their business. I don't want to lose my money, but I damn sure don't want to lose my best friend's money or somebody else's money. So we'll start there. Second is we try and treat everybody the same. Because a lot of people that start as small investors become big investors.

• 26:41Speaker 02

  So we don't pick favorites. We don't treat the $5 million investor any different than the $50,000 investor. We try and treat everybody great. And the third is we try and provide them a great service. Obviously, returns matter. That matters first and foremost. If you have returns, you're going to get more investors and people are going to want to invest more with you. That matters a lot. But what about all the other things? Are you getting K ones in on time? Are you reporting or are you doing great reporting? That is consistent. Um, is there a phone when somebody calls? Is there somebody they can talk to immediately? Is there? Do you throw events for your investors to get to know each other and for them to get to know you? How do you communicate? Are you? How transparent are you? And so for us, the incentive is to treat them. We know that our investors are ultra high net worth.

• 27:26Speaker 02

  They're investing with companies all over the country. Some of them, you know, the Goldman's of the world, all the way down to small Fort Capital in Fort Worth, Texas. And we just kind of wake up every day and say, how can we make it to where they can't tell the difference of who they're invested with, whether it's Goldman or Fort? And the truth of the matter is there's not a whole, you don't have to spend all this money to treat investors really well. It just has to be a priority to treat investors really well.

• 27:52Anthony Pompliano?

  So when you start to think about kind of the thoughtfulness that goes into this, you got the team, you got the investors. Talk to me about actually the types of real estate. Obviously there's class B, you know, industrial real estate all around the country, but it seems like you have a very kind of specific focus. On that and is that just a proxy of you've thought a lot about your business and kind of what you want to do and also what you don't want to do? Or is there something else driving some of the decisions on the actual site selection, the assets that you guys buy and hold for long periods of time?

• 28:23Speaker 02

  Yeah. So this is my favorite thing to talk on. We don't do development.

• 28:29Speaker 02

  Imagine if you were building a office building and you broke ground at the end of 2019. You thought everything was great. What's happened to you? That's totally out of your control. Covid, inflation, supply chain issues, uh, the office for some places of the world and maybe never coming back because of issues. My point in saying that all is in development, you take on all this risk that you can't control. Cities that have shut down and employees that aren't there to give you permits or inspect the building. And so I developed early in my career and that was like decision. Number one, I'm not developing. The day I buy a class B industrial building, I know what my basis is and I know what I have to do from day one.

• 29:10Speaker 02

  I learned that from Sam Zell developers, especially in California, where you might conceptualize a deal and it's not built and ready to be occupied for eight more years. I mean, so much can happen in eight years. I mean, Bitcoin can go from a hundred dollars to $50,000 in eight years.

• 29:28Speaker 02

  A lot changes. So I had to throw in the Bitcoin plug because I'm on the pump podcasts, but that has nothing to do with Class B industrial. So first and foremost, I want to be in development. Second, I want to be in Sunbelt markets. They're low government, they're pro-business, they have great weather, they treat people really well, they're low taxes, they're everywhere people want to live. Despite what the media says, watch where people are moving and they're not moving just because of the tax rates. They are waking up and realizing that these are the places on the earth we want to live. We're treated well, we're treated fairly, and we have a government that actually wants to see us succeed. That is not going to change. And you throw in a pro-business environment, it's a miracle. What we're seeing in Texas and Florida is an economic miracle.

• 30:13Speaker 02

  The third being, these are easy to manage buildings. These are big rectangles. They've already been built, they're very easy to manage. You paint them, your biggest exposure is, is the roof working, is the foundation working, are the HVAC systems working? That's all very easy to understand. There's no guessing. You just go get an inspection report. Second, can I lease these places? Well, right now, there's virtually 0% vacancy across the country in any market that matters in industrial. So now it becomes a game of where rental rates headed, and how do you determine where rental rates are headed? One, there's public market comps, but two, you can look at, again, population growth, job growth, wage growth, what areas of town are growing,

• 30:55Speaker 02

  what are not? Where's infrastructure going, where it's not? All these things are not rocket science. You just have to kind of follow the data and you can make good conclusions. And the last thing I would say, and I could go on and on and on, is COVID taught us one thing, and when we think about capital flows, to run the world, you basically need two things, rooftops and industrial facilities to make product, warehouse product, distribute product. You don't need retail centers, you don't need office buildings, you don't need hotels. Those are all nice to haves. So even during a global pandemic, there were two property types that mattered, housing and industrial. So when you think of what's going on in the boardrooms right now of all these pensions of where they want to allocate money,

• 31:37Speaker 02

  Industrial and housing is looked at as the least risky asset class on the planet. And for those vibes or those fundamentals to wear off, it's going to be a long, long time.

• 31:47Anthony Pompliano?

  I have two more questions for you that now I'm just asking things that I'm personally curious about. So I apologize for being so selfish. If you had to point to one organization, whether it's a real estate company or any other organization, you say that is, you know, kind of a North Star for me as I build Ford. What would that business be?

• 32:06Speaker 02

  Yeah, that's a great question. I think it's probably like a Starwood or a Blackstone. I've been pretty vocal about that on Twitter. That's kind of a really big North Star. I love how they've set up their business. I love how they attract talent. I love how they use their data to make informed decisions. But really, you know, they're capital raising machines. And when you have a lot of capital, you can do a lot of things. So that's probably the easy answer right there or something like that.

• 32:35Anthony Pompliano?

  Yeah, that's a great answer. And then what about legacy? Like you talked in the beginning about building a organization that would survive you. But the day that you unfortunately, like I pass away, what do you want that legacy to be? Or kind of, how do you want people to remember yourself and Ford?

• 32:53Speaker 02

  Yeah, a couple of things. Our mission statement is to be the best real estate operator in the world. If you operate, again, we're not putting rockets in space. We are, we are buying buildings and leasing space. So what's the alpha? It's how you operate. It's how you manage expenses. It's how you drive rents. It's how you drive outcomes. So that's our mission and we really stick to it. We think if we do that, our returns will be great. Our, the people that we hire will be great. But at the end of the day, I really want to create a company that the best people in the world come, want to come work for and feel like because they're there, they're getting better. Not just their bank accounts are getting better, but they're getting better as people.

• 33:35Speaker 02

  I mean, we lose so much sight that business and capitalism is just about money. And don't get me wrong, I love making money. I'm not going to sit here and be the guy that say, I don't do it for money. Everybody that's in business should be doing it for money and they should. And apologize for that. But when you've been around long enough and you see people and you see how I've got people with me that have now gotten married. They have kids and you see how the business impacts their family and you see how that they grow as people and they mature as people and they treat people better over time. Is I just want to be a place that the best people in the world want to come work for, not only to get better financially, but to get better as people. And so our purpose statement is to create a place that inspires the best people in the world to show up.

• 34:17Speaker 02

  And as you and I know, all business is is people doing things. And the byproduct of what those people do are the products that we consume as, as, as, as customers. But it doesn't, it doesn't exist without the people. And I think a lot of businesses lose sight of that and they treat people like widgets. And if you treat people like widgets, that's the culture you're going to get.

• 34:38Anthony Pompliano?

  Yeah, I mean, it's so inspiring. I, I, I literally could talk to you about hours for this of just.

• 34:43Speaker 02

  I would love to do it.

• 34:45Anthony Pompliano?

  It, it, it just feels like, um, you know, kind of my takeaway after talking to you a little bit here is, uh, there's a thoughtfulness. And I, I always say that, uh, there's a critical thinking crisis, uh, kind of, uh, in the world or in society. And usually I'm thinking about things outside of business, uh, for the most part. But I do think kind of, uh, increasingly that the critical thinking crisis has seeped into the business world. And not because you have to have some contrarian view of the world or, or anything like that, but it's just, what business are we in? What business do we want to be in? How do we want to do it? And then what are the kind of most important things to work on in order to be successful in what, uh, you know, our mission is? And it feels like, uh, although it may not be the sexiest thing and people want to go do deals and all that.

• 35:30Anthony Pompliano?

  Many of the things you're talking about, the incentive alignment, the company building activities, the relationship with the investors. Those are kind of all the things that you have to do that earn the right to build a, a great organization like Fort. And so it's just really cool. And I think, uh, inspiring for a lot of people, especially, uh, folks who, who want to build big companies. Uh, to kind of hear somebody who, who's done the work and, and thought critically about, uh, what that business is. Where can we send people to find you on the internet or find out more about Fort? And some of the, uh, the either opportunities you guys have or just the business that you're building.

• 36:00Speaker 02

  Yeah, you can follow me on Twitter at Fort Worth Chris. Uh, you can check out our podcast, the Fort Podcast, uh, with Chris Powers, real original, or you can go to our website, www.fortcapitallp.com backslash connect. And you can, uh, sign up with us an investor or you can learn more about what we're doing if you're interested in investing, uh, in industrial real estate.

• 36:26Anthony Pompliano?

  Awesome. And then I got to ask you one last question. One of our sponsors is Eight Sleep. You got a lot going on. How, what's your sleep schedule? You get eight hours?

• 36:32Speaker 02

  I have an eight sleep.

• 36:34Anthony Pompliano?

  Yes.

• 36:37Anthony Pompliano?

  Mateo, Alex and the Eight Sleep team will be so hyped. This is now becoming a problem because I ask the question almost always. And, uh, now too many people are saying they already have one, but it's so.

• 36:45Speaker 02

  I got one because you, because you posted about it.

• 36:48Anthony Pompliano?

  Oh my God.

• 36:49Speaker 02

  I swear.

• 36:50Anthony Pompliano?

  Now I feel like, uh, I'm, uh, helping people sleep more. Do you get eight hours?

• 36:54Speaker 02

  I get eight hours and I go to bed on negative six and then it kind of rises up there. Last night I was kind of cold, but, um,

• 37:00Anthony Pompliano?

  Negative six? Oh, you, man, you're tougher than me. I don't, I don't, negative six is a little too cold for me. I'm like more like negative four, negative five, but still negative six is awesome. All right. Well, the fact that you've got one makes my whole day. Now I liked you already. Now I love you.

• 37:16Speaker 02

  I love you too, Pop.

• 37:18Anthony Pompliano?

  Awesome, Chris. All right. Well, thank you so much for taking the time to come do this and we will definitely have to bring you back as you guys kind of continue building Fort. And, uh, I think that everyone loved it. So I appreciate your time.

• 37:29Speaker 02

  I appreciate it all. Uh, I'd love to be back on and I'll hit you up next time I'm in Miami.

• 37:34Anthony Pompliano?

  All right. Sounds good. Talk soon.

• 37:35Speaker 02

  See you, buddy.

• 37:37Anthony Pompliano?

  Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you subscribe on Apple, Spotify or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to pompscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three week intensive training program with over 50 events packed into that three week time period. Go to pompscryptocourse.com to learn more and I'll meet you guys for the next episode.