#254: Sarah Kennington - Founder of Thirty-Four Commercial

Transcript

Sarah Kennington

00:00

I did just lose a deal yesterday. I was of tech firm and their back to my private Equity Firm in the CEO wants to create a culture, wanted to go to our building, to create a culture and bring people back at the PE firms. Like no one has ever went from purely to save cost. If you're trying to view cannot build a culture from.

Chris Powers

00:18

Someone who I am 100% with. You cannot, I will die on that Hill. Hey guys, welcome back to the Fort podcast. My name is Chris Powers, and I want to thank you for joining me today. This show is a An open-ended discussion and journey covering real estate business entrepreneurship and investing. I would love to hear from you by tweeting me at Fort Worth Chris on Twitter and if you have enjoyed this show, I would be super grateful. If you would follow us on Apple, podcast, Spotify or whatever platform you listen to. And if on Apple, it would mean a lot, if you leave a rating and review, last but not least, you can find all these episodes on YouTube. Thank you so much again for joining me and enjoy. Show this episode is brought to you by Fort Capital. Are you a commercial real estate investment broker or anyone out there with an off-market Class? B industrial deal between 15 and a hundred million dollars for Capital offers industry-leading incentives, including a bonus, the ability to co-invest and exclusive partner trips for those to close deals with us. Join Fort capitals deal. Incentive program today to be eligible for these incentives and more by going to calm, backslash connect. If you're like me, you like to wake up and get your daily dose of reading for me. A lot of that has to do with commercial real estate because of the industry that we're in it for Capital and the news is important. But if you're a busy real estate, professional like me, you don't have time to skim through the dozens of dry and add filled media, Outlets each day. That's why I read cre daily. A free email newsletter that cuts through the Clutter and delivers concise, witty commentary on the latest. Trends in transactions in commercial real estate. I discovered cre daily a few months ago and it's an email I actually look forward to getting each morning. If you're a real estate professional, you owe it to yourself to try it out and stay on top of what's happening in the industry. In only five minutes to give their free daily newsletter to try. Visit cre daily.com that cre daily.com for anyone that tried buying a car over the last couple of years. It was not an easy thing to do. Do I just got a car and had one of the best experiences I have ever had with Frank Cadillac here in Fort Worth Texas, when you think a Fort Worth businesses, it's hard to not think a Frank can't Cadillac. Well, that's because they have been around for 87 years and with history like that, they know a thing or two about how to treat their clients like, no dealer, markups over MSRP, the price on the sticker is the price you pay. So when you're in the market for a new vehicle check them out. New inventory is arriving daily from the XT 4 5 & 6. To the CT four and five black wings with cp0 rates. There is always something in store at FK Cadillac.com. That's FK Cadillac.com. Frank can't Cadillac community-driven locally different. Since 1935 Sarah, you are a badass and I have a lot of cool stuff. I want to talk too today. You have obviously had an awesome career in real estate. Do you have a family? You have started a business, and so I kind of want to cover it all today. You.

Sarah Kennington

03:35

Down, I love it.

Chris Powers

03:37

Alright, let us just kind of start out with you kind of, we just you just said something, I wrote it down. You said I did a lot of crazy things to get here. Yes, you're a Powerhouse in real estate. So let us just start there. How did you get this career started?

Sarah Kennington

03:51

And what a beginning first being called a badass. Thank you, that. That is a big compliment to me. Yeah, you are. So I thought about I am like, Luckily we have a full hour, I didn't know how much until 90 minutes. Okay, I have a crazy path and it all leads into why I started the company and all the things. So, I have kind of got a, I have got to bring it back to where I came from, if that's okay, let us do it. And I don't want to talk monopolize the conversation, so interject. But I grew up in Ohio, my family grew up in a small town, a couple hours away from Columbus. And then, my, my parents met, they have me young. And my dad was one of the first to go to college paid his way, and he became an endodontist. And I always tell people that Texas is just a totally different business mindset in the midwest. It's very much. You go to school, you get educated and then you follow that profession. So what there that, you know, doctor or lawyer Dennis nurse, it's very much, a kind of a Services, you go to school and then you get educated. So I always knew, I had a lifestyle that I wanted Very early a joke, my mom I am one of four. My mom was like you're my most expensive child. So you need to feel you need to find a way to go make this happens for yourself. So I went to school pre-med, I thought I needed. I wanted to be a doctor. I thought that was the path to success and even in high school I took off, I was in a young professionals program, I left school and I shadowed a pediatrician and a cardiologist at the end of your, you know, working you had to give a presentation on Cardiology or you know whatever you shadowed and I gave a 20-minute presentation on Cardiology and everyone was like wow that's amazing. You need to be a cardiologist, you be a great cardiologist and someone should have said, time out, you know, you need to do something where you're presenting. So I went to school and I took a course called DMZ which is biology microbiology and zoology they called it. The weed out course and it's successfully. We did me out. I had dissected cap. I cried I remember calling my mother and saying, I don't know if this is relevant issues, we don't have to be a doctor and that was I never thought I would be anything else, but because I did not do well. My first semester I didn't get into the business school right away. So kind of serendipitous thing. I went to school with Wally Szczerbiak, he was a senior when I was a freshman and Ben Roethlisberger who was I think he was a year, either year to behind me But I my roommates were went to high school with him, so I kind of knew him not well, but before, so, our sports teams were really good at that time. And I always worked in college. I have been working since a very, very young age. And I worked for our are like club sports, and I was introduced to our Sports Marketing Director, and he asked me if I would intern with them. So I started working for Miami University sports where I went to school in Oxford, Ohio. And I switched my major to basically, I think was important. I can't remember because it was so worthless to my career, but Sports maybe management with a minor in marketing and the Cincinnati Bengals because came on our campus and recruited five of us. So we thought, gosh, we're getting this amazing opportunity that I fell, but we it's amazing. We were interns who cold called individual ticket sales so and the Bangles were maybe three and thirteen at the time. So I would call people and say, hey, this is Terry Hinckley with the Cincinnati Bengals. And I mean, they were laughing at me, not even group sales, I was calling individuals to buy tickets. That's how yes that's the Bangles are desperate at that moment. But from there I learned I did not. I wanted to work for a team that was in season and I wanted to live on the beach because I figured I would live in a city, and I was going to take my last summer. To do both of those things. So I went to the Cape. Cod Baseball League. Are you familiar with that? Okay, for our listeners it's where college baseball players, basically go to get drafted. It's the number one summer league. It's a wood bat league and that's where basically Pros just come and draft college players. So I went to the Cape Cod, never lived their lives, her never even visited. Their went to Chatham live. There took my best friend with me and the internship was unpaid. And my day job was, I was a nanny for a family that actually live. I don't know if they still live there, but they lived in South Lake, and they owned a company called bars. Ba R SE, and they were a jewelry wholesale and company. And they, at the end of the summer said, can you come back next year and be our Nanny? And I said, no, I am graduating from college. I have got a like, start my life and there's like, well, why don't you come to Texas and work for us? Help us with our kids and then you can do one more summer and as an okay. I don't know why but I did and I drove from Ohio to Dallas silencing never set foot in Texas and work for them and loved it. I actually it's funny cuz I am in Fort Worth right now. I would I spend a lot of time before it worth a lot of time in Dallas, but I was I had a pool towards Dallas. Anyways, I went back one more Summer with the league. At the end of that summer, I decided I did not want to work in sports. It was very underpaid, a lot of hours, it wasn't really kind of What I thought it was and I hate to say it because it sounds so vain, but I knew I wanted to, I wanted to make money. I wanted to have freedom, so I moved to Dallas without a job in. This was October of 2003 and I didn't know anybody. I remember, I was walking out the door. My mom is kind of like, what are you doing? I said, don't worry, I will figure it out but I had four thousand dollars and in college for a thousand dollars is Lot. But when you move to a city and you pay rent you have a job. It's not. So my eye, my first job here was at 24 Hour Fitness, okay on Royal and 75, okay? And I sold memberships, okay?

Chris Powers

10:18

Which was easier to sell them, Bengal.

Sarah Kennington

10:20

Tickets easier to sell them that Hosanna, but also one of the hardest sales because it's face-to-face, and they taught you that if Ten minutes. And if that person leaves, you're never gonna see them again. So is this engaging and learning why they wanted to and people have different motivations, they were scared. You know they wanted to change their lives whatever but I told myself I have 90 days to do this. It was a commission. Only job as is probably the best sales training I have ever had and I said on I will give myself because I was college educated and I thought I am should be doing something bigger but like B-day 87 someone came in to buy a membership, and they had worked at this company, and she was talking about how much growth they had. And they were hiring. And I said, tell me about it and I asked for the managers number, so I called, I called him there. And I don't know anybody in Dallas, and I got an interview. It was for it was at the time, was for Allegiance Telecom, which, and they hired me, and two days later they were purchased by Exo Communications. So I had a month. That I had hit my quota and I could every month they had quota, and they're firing people left and right and luckily I stayed on but that's where I learned a couple of things. I had a monthly quota and there was a woman there, that was really successful. I haven't seen her since I worked there, but I went to her and said, what are you doing? She said, I Network, I said, tell me about that because we would have, we would be graded on how many times would call people. We would have to Can businesses and it was a true cold calling. And I mean it was an it which I hated. And, so I became pretty successful at that at a young age. I think I was 23 and always hit quota. And then I, but I learned from that, that I wanted to be in a business that people respected. I wanted to be respected because I was kind of the bottom calling on I.T directors or CEOs or whoever And I wanted to have unlimited potential. I was at a level at the time I think maybe like a senior account executive, and they capture income for some reason it's kind of like you had a there's a regional manager, and I am a sales manager and the manager and so my level was capped and that was discouraging. And, so I Actually, we got recruited out of my job. This is there's a lot of stories here. I was recruited out of my job to do medical sales and I took that again thinking that medical might be my path, and then they ended up buying another company and transitioning, my roll out. So I only had a month there. So I said, okay, time out and I took a month off, I studied for the LSAT. Took that because I thought what I do now is what attorneys do that. I they are rainmakers some, and they negotiate for a living and that's what I wanted to do. So I took the LSAT, I got maybe a little bit above the national average, I applied all over but because of my bmz course, in my poor grades, my freshman year, I didn't get into like SMU UT I got into a school back in Ohio. I was considering it but I got cold feet about Moving back to the cold. And I started really, I am starting to get more ingrained into the house and Texas and I used to call on people like me and when I was at my former at x0, and they would tell me he was moving into building. So after I took the LSAT, I went back to my job knowing it was maybe a year before. I decided what I wanted to do. And someone was like, you know, you should consider real estate. You would be good at this and I said, okay. And, so I was debating law school or real estate, and I was talking to a commercial real estate attorney. She was a female, and she said, if I did it all over again, I think I just go into real estate. Showing not that you can take my law degree away, but I think I would do that. So I was debating, do I go to law school? Come out a hundred, fifty thousand dollars in debt or see if I can make it in real estate, and I was very immature. At the time I did not do my research on Commercial Real Estate and I took the first thing that came to me which I always advise young people not to do, okay. And I took a job at a small, very small shop with guy was a great guy. He was a kind of lamb burger, and then he started developing, and he was had another woman there, that was a broker, and they were basically okay will be a broker. So, I had my real estate license and a desk, but I did not have insurance co star. I don't really have mentorship. I know. Draw. No salary, nothing. And I just like Okay, so I did a number of odds and in things in those couple years to get me through that time. But my first deal ever, was a nail salon in Carrollton that I represented and put them in there about three months in. I would realize I would make a mistake that I need to be at a bigger platform because I needed to learn. So I spent all my time networking and trying to I made my job to get a job. I mean, I am say breakfast, lunch. Happy hour to get to more of a Established. So that's it in that time. When you say that crazy things, I used to throw parties for this guy, he owned several bars in uptown, and we would charge per head, and then he would give me a percentage of profits. Yeah, I lived in a 550 square foot like studio apartment, and maybe it was a one-bedroom, but it was so tiny. And I lived there until I was 30. I kept my overhead. Extremely low, all of just kept investing and saving so that eventually I could get to where I want it to be. But I found an opportunity transwestern at the time had just picked up policing assignment for Bank of America Plaza, which is the largest office building in Dallas and this was kind of for downtown analysis. It is what it is today. It was probably 80% least there's before hands and Putin moved out, and they were looking for someone to split their time. Time to do leasing antenna wrap. And that was my first opportunity where I worked for a bigger platform, and I got really great mentorship. I am still very close with one of the my senior Brokers is them standards Thompson, but overtime asset management change. I kind of became the lead on the building and someone left. I am doing a lot of talking to you and I reject but Someone had left in and my company at the time, put another person above me on the building without asking the client or kind of just telling the client that they were doing this instead of saying, hey, you know, what are you thinking? And the client called me at 11:00 that night and said, make a list of the companies you want to go work for and this was that, okay, so let me I have I am giving you timing, this was it. In. Just after 08. Okay. Okay, I am trying. Think about the timing. I think we are we were halfway through 9.

Chris Powers

18:01

And you had been in the industry. How long at this.

Sarah Kennington

18:03

Point? I have probably officially got in 06. Okay, so I moved in 03. I had my, yeah, well sad doing sales and I, so I was watching all these people. Just make a lot of money. I mean, it was had anything about. I mean, you're younger than me, but it was seven, was kind of big run up and then obviously, the collapse of 08. I got over to transwestern and now said I think at the end of 06, and so I had a little bit of time there and then 08 it was hard. So there were no buildings trading from 08 2008-2009 probably into 10 because of just the Capital Market situation. So opportunities are created a lot of times for Brokers when movement happens, people move ownership changes. So when they said, make a list of the companies, you want to go work for They're this was the first time there was a like a pitching opportunity and a while so it was very attractive and it's a 1.8 million square foot assignment. So I think that the time ten companies. So this was before a lot of mergers, there was three Bowtique, companies cousins was still in existence so 10. So I kind of energy. I got to see. I was basically recruited by 10 firms, and they kind of showed me, okay? If you came over Kind of understood that I would go with the building pitches happen. I wasn't in the pictures, but it was narrowed down to three streams, Peloton, and cousins just before cousins was purchased by Cushman. And when I met the guys, TD, Briggs and Joel, pustular that owned Peloton, pelton's since been sold. I mean, I knew that's where I wanted to be. I had made the decision almost that I wanted to go there with her without the building. This is it was a very stressful time because translation was trying to keep the business it was very I was 20. Eight. And it was an awkward position to be in because I you know, I wanted to go with my client so that's when I went over to Peloton and that was when I really had true, true mentorship and I worked with two guys that were building a business. They had been in business at that time, six years. So I have been in business for 5, so I kind of understand where they are, and then We I mean we really we grew that thing. I mean, I am taking a little bit of the credit but over time, I grew my own personal business when I became the head of new business, they open multiple cities in Texas service lines, went from more just leasing to Leasing Property Management, construction management Asset Management, you know, 10 or above a true, full service Boutique, and we had a big from 13 to probably 16, and we were a lot of growth and a lot of wins and really Being our portfolio of clients and being more institutional and using air quotes safe because that's what you hear a lot. You know, I want the safety of a bigger company, so I walk I watched, I hope those guys make decisions I watched what they went through and I started thinking but I do this, I kind of want it. I mean it's pretty fun. I would want to own a business and so take it back to my personal life. I was I am fast, forwarding to, I was 33 and I went to Africa on a mission trip and with one of the owners of Peloton and his family, and a couple other people that we worked with, and if you have been out human Africa, I have not. Okay, I have been to.

Chris Powers

21:37

South Africa, take that back up in the Cape Town.

Sarah Kennington

21:39

I was Big Time on my list. Yeah, we went first and did a safari which was incredible, and then we went into, we was with a group called family Legacy and it was just So, eye-opening and a game changer and just I mean if you have any doubt, I have got exist I am sorry to make this religious thing. You go to Africa and here there's just no question between the people and just the way Wildlife is fascinating, you know, this bird is this color to hide from this Predator? It's, it's fascinating and I came home. I had been kind of shuffling around in churches. I didn't grow up going to church, and I was not baptized as a child because my parents My dad won't join the Navy to pay for dental school, and they told them that we would, we would relocate, and they relocated Us in Japan. So my brother was actually born in Japan, lived on a naval base and just didn't have a, my two younger sisters. They were baptized. So I came back decided to join a church. I met with Paul Rasmussen, who is our senior minister at Highland Park Methodist, and he is amazing. He's touched my life in so many ways, but I kind of went to him. I had a meeting with him and I had a lot of questions. About Christianity and faith. And because there were some things I learned in Africa that I was, I was confused about. Yeah, the most simple way to explain Christianity to me that I wish I tape recorded and I could play back every day, but he was at, I would really like it. If you were a member of our church and I said, okay, I would love to join you guys, have you been baptized? And I said, I haven't because well, we can do it two ways. We can do it publicly, or we can do it privately, and we do it in my office and I said, I think I want to do it publicly. So we set a date. It was December 9th. Of 2013 was a nice warm but I turned 34 November 15th, 2034 2013 and 34 was always my lose my number I was a huge NBA fan as a child which you know, sparkly baby child versus my guy. I don't know why I think is just sheer.

Chris Powers

23:47

That was a good pick because he's still.

Sarah Kennington

23:48

Awesome. He just M. Yeah, he's a lot of fun, but he was just Relentless, you know, he wasn't like the most naturally talented, but he's up there with the greatest because of his hustle. And I didn't know that fine, but I just liked him. So 34 was my basketball number. My, you know, my email, is there, anything 34 things 34 but I turned 34 and two weeks later I got baptized and then I read this book called The Purpose Driven Life by Rick Warren, which I am sure a lot of the listeners have read and that was kind of game-changer, maybe because I will say, I know we're going to touch on this. I struggled in my early 30s being as well, what was I was tagged and aggressive female but after reading this book it was like, okay. God made me this way for a reason and I always thought as a Christian you were supposed to be you know volunteering in soup kitchens and just giving your time and going to church. And that's what a Christian mean. But really it's giving your god-given talents and giving it to the world. Whether that's Charles Barkley as a basketball player, whether that's you, you know, buying industrial real estate and having a podcast, whether that's me being aggressive. So I kind of have this piece that this is who I am. That was in December and then in January but the my my boss asked me to open up the Houston office for Peloton and if you recall, this was the beginning of 14, Houston was on fire, they were it was becoming really institutionally. Safe. It was a port city, both office and Industrial energy was on a high and Dallas was jealous of Houston at the time and I, that Lit this flame in me. I am said, I would love more than anything to go build. I thought, being a female entrepreneur, one of the few. So we kind of went that course, and He also was talking to another person down there. So it kind of wasn't really clear. Is it me? Is it him? Is it me? Is it him uncertain? I don't do very well with uncertainty but my life was kind of coming together. I decided to freeze my eggs. I bought a house, I would gotten a dog. I have always wanted to be a mother. So things fell through with this other person. He was talking to in Houston, and they kind of came back to me like a you have got two choices. Do you want to go to Houston and Houston are starting to create? Because of the time it took to figure this out. Yeah and it created really wasn't Houston listeners, didn't crater, but it had a rough spot. This was done September of 14 and I said, you want to stay here and grow this company in Dallas, or do you want to, you know, go to Houston? And so, I was kind of debating between the two and I bought a house and, you know, I have always and I had friends and the network here and in an Ation I am real involved with called track. I was having a drink with someone. He's a debt broker, and I was telling him the story, and he looked at me, and he goes he can't go to Houston and I go why he was your their second choice. And it just it was so blunt and I said, you're right, I should just open up my own company here, and he goes, that's exactly what you should go. Do I know? And that moment I was obviously 34 years old, I kind of all. I mean I put on the back burner because you talk yourself out of anything scary. And anyways, I just decided to stay in Dallas. I double down on my personal business doubled down and trying to help them grow, and we really did. We traveled all over and told the Or is a great, great story, and it was a lot of faith in that story too. And then, then I started just obsessing over going on my own in my head, there're some things that led me to it, but the beginning of 17 and I prayed every day and I said, Give Me A Sign. God, Give Me A Sign, Give Me A Sign. And I got a sign that I needed to go, and that's when fear takes over anytime. You're about to take a huge leap of faith, but I did it. And I think the hardest thing though, I am telling the whole story about me, one question, but if you're will get this out of the way, the hardest thing about starting a company is, what are you going to name it? Because that what you call your company, it's just like having a child that forever will impact the trajectory of their lives. And I remember my mom was like, what about stream taken? What about Edge taken? It's very hard and Could have easily called it, you know, Hinckley commercial or something named better myself, but I wanted it to be not about me more about what we're doing. So I remember, I was with a friend. And I said what about 34 commercial? She's like, I like that. And so what does it mean? I said well, it just to me it means God's plan because when I was 34 it, that's when it all kind of came together for me. And she's like, I like that. And I went and I looked 30 for.com was available. 34 commercial was not taken. And all these things just started opening up and I had to complete their. I got some great advice from a client that has talking to about maybe doing this, and she was like, don't do when you're when you leave your job, be ready to go. Don't pick these times. I thought about traveling a little bit, so I kind of spent my last, I am still very good friends with the owner. So if they listen to those, they will not be offended. But I spent my last six months, they're preparing for 34. Yeah. Um, and so that's five years ago, this month that I left, and how we have been five years in business. It's incredible. And as I said, it's a it's if you look at the Timeline it's here, it's there. It's a lot of failures to figure out what why how all the things a lot of risk taking but a lot of I always had my end goal in mind, and I am not there, it's not the end, it's still a journey but I did a lot of things to support myself, so I could be put myself in a position. Later. Where I had freedom.

Chris Powers

30:05

So I say again where I started you're a complete badass. Thank you. There's I took a few notes, there's just some things I want to unpack. Their the first is, which I am I would imagine this is kind of stayed with you. What did you learn to sell gym memberships? That, that if somebody's in realist, like, what did you learn this just transferable to basically any type of sales or anything you do like because you kind of highlight it on.

Sarah Kennington

30:30

Well the it taught me how to talk to an individual. Yeah. Because it's an individual, you know I can call you Kris and say I would like to do business. For core, and you could blame it on your CFO CEO or whatever. But if you're asking an individual to give their money for this, it's personal. Yeah. And nobody likes to be sold. I don't like to be sold even though I am a client of many, many people. So it I think, well, I think people that are in sales, they have an inherent like unidentifiable gift, but it taught me how to relate to people find out. Out why, they're here and then take like the fear out of it because even though it sounds silly for a gym membership, I mean some people might be embarrassed or, you know, I am here, because I am 50 pounds overweight and I don't really want to admit it but you're looking at me. Yeah. So it was the ability to talk to people ease their fears in front and just like us people and not even though I was so broke. I don't know how he's going to pay my electric bill and I needed the sale. I try not to eat. Don't make it about you and you make it about them. That's a and that's a lesson. Everybody needs to learn, because if you make it about you, it's.

Chris Powers

31:51

Just hard one of my mentors. John always tells me like, if I am struggling in a relationship or a friendship or something at work, and I explain to him. What's going on. He will always come back to me, and he's like, dude, you're trying to get from this relationship. You're not giving into this relationship keys. I go back to whatever you're doing and figure out what you give to it rather than what you're getting. Because as soon as it turns like what am I trying to get out of this? It's where you start to.

Sarah Kennington

32:19

Tailspin correct. And that's I mean that's been my heart is lesson in my life is obviously if you're listening you can probably tell that I am very type A and I couldn't like hate the word control freak but no rain maker. Yeah but I want this, and so I am gonna make it happen and a lot of it is surrendering to the process in the timing and the And that's a lot of what 34 means is, like, you have to just there is an ultimate plan for you, whether you believe in God, the trees Universe, whoever it's there, it's already written, and if you force it sometimes, you have to listen to those signs of like, okay, it's over here. But when it's you and mind life is harder, you.

Chris Powers

33:01

Said that you had gone to a small firm. Realize that wasn't a great decision. You needed more training. Really Like what is good training when you're getting started? Like and then you also said, don't take your first job. So if somebody is listening to this, and they're like what should I be thinking? If I am getting into this industry like what does good training look like and what is something they should be thinking about if they're going to take.

Sarah Kennington

33:24

Into this is real estate specific. Correct? Yeah okay. Well I often think that the easiest so there's no barrier to entry in real estate. It's all there's no class. You can take there is no school you can go to like okay I am qualified for this, it's relationship-driven. Hustle and it's a lot of grit. So I think when I said don't take your first, the something that I talk to young people all the time, one of my things was because it was so hard for me. I promised myself that I would always pay it back. So I talked to a lot of young people and Mentor so many but sometimes the easiest offer that just comes and you're like, oh, you're just tempted to take it is if it's really easy, there's probably a reason I always help people at take six. Months to get a job with the industry. Like someone told me that and I remember thinking six months but it does because you and you really need to identify the personality fit. So I mean, real estate is so all-encompassing, I mean, there's a different part tags multi-family office, industrial and Retail. Then there's policing side tender upside the equity side, The Brokerage side and their architecture, there's construction. I mean, there's there're millions of people in this. Why shouldn't they — there're hundreds of thousands of People in Dallas and Fort Worth that say that they're in commercial real estate. And, so I think when you're it's true that you have to you when you're trying to get in you your meeting with its I always compare it to rush. Like Greek, you kind of find your tribe. So when you're meeting with people, there's people that you're just like click with like this. This is who I want but you also have to look for what end when you the training, a lot of our careers based on reputation, Oh and the decisions we make and the people we associate with. So you want to be with good people because sadly, there's some people that have made mistakes and it follows them or a bad decision, 20 years into their career, you know, taking a fee outside of their company or whatever. I mean, I remember there was one person and it's something happened in 1984 when I was literally for years old. But that I knew that about that person because the reputation stays with them. So you really, You got to think about who is giving who's teaching you and who you're learning from and then the training is a lot of self-motivation, but you have to be, you have to your, you have to be self-motivated. That commercial real estate is not an okay. I check in at 8:00 my boss is going to tell me everything that do today you have to watch and observe and then take the time to enrich your own career, they have resources now that I didn't have their guy from my else Class was we can talk about later, which it was my leadership program started? Cre analyst? And one of the guys in my office has taken it, and then he T8 it and twice at his age man. Five years in the business what he knows versus what I knew if it's hands down so different, so I mean I leaned on like ccim I got my ccim designation that kind of taught me the math behind real estate because real takes a lot of trial by fire you learn and you learn a lot by Messing. I mean, I think my biggest lessons have been by my mistakes I have made but that it's really hard. There's not an actual like a training like, okay, I am gonna go to training for a week, some of the likely still. They have a training out in LA but you're learning Argus model. I mean, you're actually learning a physical thing, but to be in brokerage when you're learning how to talk to a client, the vernacular, the players, the people, the only way to do that is to immerse yourself into the market. And so, the biggest thing is who am I associating myself? Self with and I always someone said it to me. They said, I say either go big or go small Regional players are harder because they're, they're competing with the big boys to see bees the jail Ells. And then but the small entrepreneur like a 34. There're several examples or for Capital, your, your principal LED, and you're learning from the principles. So I think small or big is its I would go either way and it just how much Like how much are you willing to take on bite off one? You know some people want a little bit of a soft Landing before they get in and some people want to just jump right in.

Chris Powers

37:54

All right, I want to talk about Bay of a tower. Yeah. 1.8 million square feet. They're going to be switching companies and you have been on the building, what? Two years?

Sarah Kennington

38:06

Yes. So.

Chris Powers

38:07

so I want you to give a masterclass here for a second of what is somebody doing two years to gain such trust with an owner? Cause you're only 28, and I am not saying that's, yeah, that's old, but I am also not saying that's young. What did you do? And then I want to get a little more into that story that's an interest at seem like a big pivotal.

Sarah Kennington

38:25

Moment. It was very interesting. So if I back up the company, the client, they still own it. But at the time there were stationed in Florida and there're two gentlemen, that were on the river, the principles of the ownership group, the German billionaire owns it, he is a second-generation, I think it might be By the third generation now. But the two gentlemen were in their 60s, and I think that a forced retirement, 65 one retired before the other, and they were my asset managers. And I remember we had a huge marketing budget. It was, I think two hundred thousand dollars that's a lot, but you don't see that, you don't see that anymore because okay, so if it used to be 100 when I bought it, it was 100% lease was Arthur Andersen before that blew up. Hey, Ames and Boone was, which was a gosh, what? They were like 250,000. Huge down, huge Law, Firm moved to Victory, Ross, Perot, took them they have since now moved to Harwood are moving. So we had the first time huge vacancies, and so they were really wanted to reinvest in and check. They didn't invest in the asset, but they wanted to really Market the property. And, so I recall that we put this whole Marketing plan together, you know, we want to have this party. We want to focus here, here's how the best spending your money. And the meeting was starting say it was 2:00 on Tuesday and my senior Brokers aren't there, and I am sitting with these two guys, and we're waiting. And then I was like, okay fine, I will present it. So I resented all their work and then my, my senior people walked in maybe 20 minutes later, but we were kind of done. And at the end I remember Ray. Because a lot of commercial real estate is You really have to be able to believe in yourself. I remember him saying, she's going to be really good one day then I mean I was living in my 500 square foot, apartment broke and scared. And I remember that being my first little bit of confidence. So I end up earning trust and then they retired. And I and then to new people came in, and they the company relocate their headquarters to Chicago. So they're to midwesterners. We had a lot in common. We just clicked, and they one of them really did teach me a lot because he understood, I was young, and I was rough around the edges, and there're some things, I didn't know, but he knew I had the hustle and it was my only assignment. So it's funny. Was it was my mostly seeing people have a portfolio and you spread kind of your wrist. This was my because I was doing memorized antenna trap as well. So he we kind of hit it off and then another person came in, but he came to me. He said, why do we have Tara Brokers this in our building? And he's like, I have never seen this before. I was like, well, the farmer to like that, they thought that they had Direct and relations, and he didn't, they don't want that, they want to. They wanted me just to be focused on the landlord said, they don't want any conflicts and so my senior partner, just focus on tuna wrap. And so they asked me to bring on someone senior, so that someone was guiding me. And, so I asked a woman in our office and I can say names like is because people will listen to us industry but as Kim Butler whose now at all. So she and I started working together and I started helping on her portfolio, and she was advising me, but then she left and that's when that happened. So they liked me, and they wanted me, but they knew I needed, I needed kind of it's because I don't, I didn't have the experience. So that's when they opened it up to the market, and they tested the market and being new asset managers. Getting to know the city. It was their opportunity to go meet all the town and hear different ideas. So there was a mutually beneficial thing transwestern at the time to get opportunity to keep it. But ultimately they decided Peloton but I will say I after that little bit of compliment I got from Ray of saying, I think she could be good. I remember always telling myself. Well, if I was in charge, I do it this way, if I would, if it was me and I kept kind of putting myself in the position. And to make decisions. And I just that's why I remember my firstborn. I am I take the lead and I kind of just started thinking that way and then I really think thoughts become things and eventually got the opportunity to take the lead. And so, I took over, even though when Peloton him obviously my partner, he was, he's 22 years old, Joel was my partner, and he was, they obviously wanted his opinion, but I Kind of guiding the way with the messaging and the chasing of the tenants and the broker relationships but that building. And how many times has it changed hands? It hasn't. It's still the same.

Chris Powers

43:26

It's not ownership. I am not leasing like.

Sarah Kennington

43:30

When I, so I got off of it when I was this whole Houston when I was going to go to Houston and the person that took over as still leasing it, I really yeah. It doesn't change very often do and it's an extremely so it doesn't have the benefit of Donna knows that areas is hard and just the, there's a flight to Quality, it's a huge building. It's not the most efficient, but it's extremely well maintained so everything. I am everything I learned about operations of a building came from an owner that puts because some people put leasing first because they want to make money. This one here, I mean Germans run a very tight ship. You could I could go literally put food on the boiler and heat off of it. Was that clean. I mean it was Immaculate. So and my all my RFP is been minimum of thirty thousand square feet. So I was like learn most people learn by cutting their teeth on little I was learning by huge important assignment. So the knowledge that I got from that building was incredible. And I say this in the loving way, it's hard, it's probably the hardest leasing assignment in Dallas because it's huge and you think about it you were like I just did a 10,000 square foot deal. Awesome. Okay, that's .001 of the building, you know, that move the needle much, but it is also an at an Arab town, that was right before, Uptown became what Uptown was. And all, I mean, we lost tenants to Uptown eventually Jackson Walker went up. I mean we were losing big tenants, so you had to hustle and Chase and drag people. So that was always my that's how I learned. I now I am kind of on more iconic assets that it's I don't want to say it's easy, but it go. Garner's more attention because it's the bright shiny penny. But I was on, I was like, do you know, that's how I learned, how I learned how to hustle because it was harder. And I also think I learned in a down Market, I the young people listening. Everyone's always afraid, although, I mean, the, how such a bad time? Perfect. The Best time to learn is when it's hard. Yeah. I think the people that learn when it's easy as bad habits form. Yeah, because you just think, oh, this is how it is. No, it's more be next. With. It's not just me, it's.

Chris Powers

45:46

Not that what you said, just that like bit of confidence, which I think if you look over most careers or most life's like these little shots of competence, it's get along the way. I remember, we had never done like a deal over 10 million, and we asked one of our mentors are done like a 5 and I can. What is it like to do if ten million dollar deal? He's like, well what was it like to do a five? Yeah you're pretty good at that, right? It was just like just add a zero to it. Hmm. And I went in when you said that about how it changed your clock, that was a moment. I will always remember. I walked out that day, and I was like, oh yeah, like that's all I needed. I needed somebody to tell me, and they told it to me in a way at the perfect time that I immediately go do it. But it's kind of like what you said somebody just telling you like you kind of got the goods. Yeah changed a whole new trajectory of where you're.

Sarah Kennington

46:36

Headed. Well exactly and then the power of your mind. It's once. To you and Joel taught me the way I just realized my opportunities were on limited, and that's how you have to say, especially if you start a business. Like, I remember because I was thinking a lot of advice before starting a business, which you should. I remember, I was listening to someone speak on a panel, and she had started a business, and she goes, if anyone ever want start business, call me. I will tell you about it. So, I called her. And we had, we had lunch and I said, well, you know, I am not going to be able to, I am not able to lease class. Hey, Office right away and I will be, you know, will just be starting out she was well, why won't you be said? Because I am you know, I am just starting out. You have been released anything but no, she goes. I would you change now, and so she's gonna keep doing what you're doing. And I think that's because you mean when we got were competing head-to-head with International companies and then why would this, why would we hire this person? You have to believe that you can and it just takes the exact amount of work on a small deal that it does a big deal. Deal. So I don't usually bigger dings.

Chris Powers

47:49

All right, we're going to spend this section on just kind of the market. What's going on? Let us start with what you just said, though. Okay, let us set the tone, and then we can get granular into Dallas, but like you're in office, right? We were both just at Waipio together. Yes, office is a, is a fun word right now and really because there's been clear Very distinct winners. And there's been right a fundamental shift. So from your perspective, how would you describe the office market?

Sarah Kennington

48:22

Today? Well, it's definitely the Haves and Have Nots so covid. Accelerated, the trends, there was a divide coming regardless of commodity, or I would say inconvenient office, you know.

Chris Powers

48:38

where inconvenient office.

Sarah Kennington

48:42

Parking in a garage. That's Three blocks away from your building or walking or isolated on an island. Not you can't walk to lunch. Don't have the amenities there. So there's always been that's always happened. But there was a, you know, there's a, there's a market for low priced real estate. So it would just get like if you were a low-cost alternative that usually least But now that we're fighting employees to come to the office were really fighting with like, we're competing when I say fighting. I mean, competing with people working from their homes. They employers really need to offer a great package. So, and now there's a focus on ESG. So there's the flight to Quality is there covid? Absolutely accelerated. It, I think going in to next year. So Dallas, Dallas is not going to be hit like the other Mark. I mean, The first time I mean, San Francisco New York this. It's San Francisco is really struggling. I know, but.

Chris Powers

49:52

Don't keep going, but.

Sarah Kennington

49:54

We're a little insulated in Dallas and so the fundamentals are different. We have still got people moving in or super diverse, but the most Fortune 500 quarters other than New York, you know, we're not industry-specific, you know, like Houston's oil and gas or energies, because the dependent on energy cannot fight. Now I feel bad. I was really picked on Houston, kid or Chicago Insurance. You name it, d.c. Politics government, you name it. I always say every city has an identity and that was what were? This is real estate. Like the most. That's our lifeblood. So we will office be okay. Yes. Will there be a lot of buildings going back to the lenders? Yes, but that is not the class. That's not the class. A Beautiful well-built. Well least you know, Blue Chip roster building that's you know, your Standalone Suburban the Suburban. That's not tied into an office park with, you know, walking trails and places to eat. So it's they hasn't had but I think and of course I am biased. But the notion that office is going away, is ridiculous. Yeah, and my husband said it in the beginning and 20 he said, this is just like 911. Everyone was like, no one's ever going to fly again airlines are done. I mean we know that didn't happen so people are scared. I did just lose a deal yesterday to. It was a piece of tech firm, and they're backed by a private Equity Firm in it. He was in the CEO wants to create a culture, wanted to go to our building, to create a culture and bring people back. But the PE firms, like, no, let us just never went from purely to save cost, which I mean if you're trying to you cannot build a culture from.

Chris Powers

51:40

Someone to I am 100% with you cannot, I will file.

Sarah Kennington

51:43

Die on that hill, right? But what covid did is we gave all the power to the employees and that doesn't work. I am not for people listening if you're an employee, you don't. It's not saying that you don't have rights in, which isn't that leadership? Doesn't respect that but you there're leaders for a reasons. There're Boards of Executives for a reasons that make decisions because you have a company of 40,000, you can't take 40,000 opinions, but what we did was there, everyone's so afraid to, like, to mandate you're coming back that they Lose talent that they just kind of handed over the keys to his Island. But now the controls coming back hybrid is absolutely her. Stay are already here but nobody, I mean, we're not because of Technology, 25 years ago. You could not work from home. Now you can, but you have to have, there's got to be accountability, there's got to be collaboration. So I think people that further invest in get in front of it, get in front of the environmental aspect. They're going to be the winners but it's just like, its basic fundamentals. If you invest in your asset and you make, then you create awareness, you're going to do well. But if you're just a one-off buying something and letting your asset not stand with the times, it's not going to do well.

Chris Powers

52:58

Okay, so if I was a, what we're going to talk about the haves, I think I want to have an interesting discussion there. But if we're talking about the Have Nots, I am a landlord I got to have not, and I am calling the best leasing agent Dallas. I got obviously, it can go back to the lender, but even the lenders, probably like, I don't want this thing because is there even a price for this, besides the dirt? What are you telling me, is anybody cause? I mean, I know you have positioned yourself on more, iconic Class A things, but I am sure you get calls. Yeah, Sarah, I need your help. What can I do? Is the answer. Like, I don't even know what to tell you.

Sarah Kennington

53:38

Well, I doubt you're asked me to fold it. It's totally depends. It, where are you located? What you're doing? Are you come on? I gotta bake.

Chris Powers

53:48

Am not in a good spot. I am on Desert.

Sarah Kennington

53:51

Bill. Well, then I would, we creatively called an Adaptive reuse. I think you have. I think some people have to get it, get creative. I think that there're some buildings around the airport that week. We should maybe consider it more of a logistics Hub and maybe like.

Chris Powers

54:09

I keep them out the two to three.

Sarah Kennington

54:10

Story. Yes it would be more. Flex is, the problem is, is what is your basis? So I am kind of skirting the question that I don't have the exact answer, but if I, if you have something that's decent, it has good bones. I would say you got a double down, you have to have your vacancies, ready, covid. As has made this phenomenon of no one wants to put their own money in anything, but we want the landlord's money. But for the landlords, that are making their vacancies look, Look great and someone can come in and say I can Envision this, okay, I will take this in it. All I have to do is get a permit because the permitting process will especially Dallas, but really all the cities is so delayed, so reinvesting in your vacancies. Checking the box that amenities, they have a place to eat and have a place to park. Are they safe? Like, do they feel safe? When they Park in? They're coming to the building. All those things. If you can, like everything that you can control, you have got to do that. But if your basis is here and your head and that You have to, you have to look at as the math equation because you have to look at your basis. How much money is it going to take? Because construction prices have gone through. So there might be a situation where going back to the lender is easier and saying, I am going to cut my losses and start over with something for us. If it's in a fun that has you know, a diversification of asset that might be the best bet. But if it's I got to figure this out, it's like, okay, well, we got to control what you can control. Can't move the building. We can't, you know, recreate the highway systems, we can't, you know, Troll all the retail around it, but we can control we control that they can seize have look great. It's got to be a great tour path and then you have got a tour path. It's.

Chris Powers

55:52

What, oh, how you arrived at the?

Sarah Kennington

55:54

Build? What does the, what are they? What is their first thought? Because you only have one first impression. So when they drive up, how do they feel? Where's their parking spot? What do they see? And so, that's whereas a broker, you're so important. Everyone thinks leasing is not important. Even though they say, is the fundamental of all State preach. I mean, it's already we get, we are the bottom of the barrel, but we're the most important. So, I have seen it, I when I represent is, I have seen it on deals where the rafters it was offer. And they didn't like how the leasing person treated him, and he was like, he was so angry. He was like, and he didn't go that building anymore, just because of the way he was talk to ya. So controlling what you can control? So important, and then just grinding because there's a market for everything. There's High price, there's low price there's Middle Market, you know, I mean, doctors are the worst. That is an, I am not gonna, I am not paying rent, and I am not paying fifty. Five triple net, I am not doing that, and I am in real estate. So there's a, there's a market for that and showing the tenants the path to create what they want. Yeah. Whether that's open getting people back so it's expensive but if you do it, it's worth.

Chris Powers

57:08

It. Yeah. And I think they're mean, I think there's just gonna be a lot of people that are going to go out. I don't want to just keep pouring money into the right-field. The question really is even if a bank owns, and I am a bank now going, hey, what should I do? Yeah, I guess it's, some pricey answer is hey, reinvest in the building, you can get somebody in here for a dollar, a foot a year, or you tear it down or but there's so many of.

Sarah Kennington

57:32

Then. Well, I think it's going to be a wave of this stuff. I agree. But those in the bank situation, there are people like you and me that are live and You in the market. And they take a GP position because that's eventually something that I am very interested that can come and know how a neighborhood functions. Because these Banks, they're looking at spreadsheets and numbers and not the nuances of a deal. I mean, real estate is just not an Excel sheet is the personality. Its people. It's, it's psychology. So it's there's going to be a lot of opportunities. Especially with the big portfolio, my husband taught because he owns real estate. He always, It's like I am going to buy what is too small for them that they want to focus on these big, big boys. I know that you have a similar business model, but let us go by this that they're not that they're too big to focus on and I can go create value in there. So there's a lot of opportunities like that where we're looking at something, I never want to be there, but someone smart that comes in because we Dallas has a lot of really, really talented real estate owners that come in, they have got great Equity relationship, and they come in, and they turn the building around. Yeah, so I think if you look at some Struggling. Like someone's what is it? Someone's trash is another man's treasure. I mean that could be just because their bases wasn't great. But along the tooth they need to get rid of it. I mean there's I can name a million examples of that out of class A and Class B or even see that someone has turned and made it. Now I wish I would have thought of.

Chris Powers

59:01

That and there's Class A and then there's class double-a.

Sarah Kennington

59:05

There. Yeah. Well now, because co-star monopolize the market now, it's I don't know what we call it anymore. There're five stars and four stars three. I grew up.

Chris Powers

59:12

Would be like the.

Sarah Kennington

59:13

Crescent. The Crescent is a double a crescent was like the Bell cow of Uptown, they're always the leader, but now the new developments granite's. Going up on a tower Kaizen, just completed the link which I was, yeah, I was a part of an amazing building. There's McKenzie all of us so Uptown, there's one of those consider double-a. Okay, so in Lisa's, that's what we're negotiating, like to be consistent with class, double-a standards.

Chris Powers

59:39

Okay. I want to focus on that. Okay? Because I don't really, honestly know a whole lot about it. I just know, they're really nice building, right? So I come to you. I am a developer. Yes. And I am going to build the next amazing building in Dallas and I want first, I want to pick a leasing broker, right? Why am I, what are you telling me at the onset? But while I have got a set of plans that I am like, okay, I am going to work with you, obviously track record. Everything. Like are you involved really early on and It's my?

Sarah Kennington

01:00:12

Preference, okay? Because tell me how you work? Well, the earlier you can get is the better because like, you know if you let an architect Lee, the process that's going to be really pricey. So a, where are you going to spend the dollars that have the most impact and be? What are the like now? The people making decisions go from CEO to HR Director. So, it's, it's a vaster. It's a bigger group of people making decisions used to be. You could say, where's the CEOs house? Okay. Well, we're going to be one of Three buildings. But now it's the were really thinking about the people, so just having that constant exposure with tenants and how are they thinking? And they're thinking not just about their producers or their high-level Executives, they're thinking all the way through, how they recruit, how they keep their administrative status staff happy. So, I would like to be involved from the beginning, like, the link, actually sold that land. I brokered the land. I represented, the former owner and sold it to Kaizen. And then luckily Kaizen asked me to Be on their team. So we went from land sale, that doesn't happen. A lot of Farmland sell to they were kind and had me involved in picking out the finishes and helping design the building all the way to leasing it up. Well, that would be my preference. That's a lot more work and you know, we only get paid when things are executed but you I think you're built your, you set yourself up for more success. That way if you get a leasing in at least an expert in early.

Chris Powers

01:01:41

And on a deal like that. Where is the money being put into? Like I know it's that mean you walk into some of these buildings have been in the McKinney and all of and I have been into the link but sounds like I need to.

Sarah Kennington

01:01:54

I will take you through. Let us do it. Is there.

Chris Powers

01:01:56

Space still available? I don't need.

Sarah Kennington

01:01:57

Any, but we just signed a deal yesterday is our last big deal. We have 2500 square feet, I think 5,000 square feet left. So that's been a big man. All every lease was signed.

Chris Powers

01:02:05

This year as a building done.

Sarah Kennington

01:02:06

Yes. It was a delivered November of 21 or 22. Gosh, time is almost Urging. But yeah and unbelievable. It's been a fun that was a fun.

Chris Powers

01:02:16

Okay so like where there are people putting the money into these class, double A?

Sarah Kennington

01:02:20

Properties. So one of the things as a developer's, you got to remove all of your obstacles of saying, no, especially with how sophisticated are our Market is with Brokers. Do you obtain during have fewer options? Because it's the tightest. And then so the best markets are Uptown person Center Legacy and then you have got Suburban markets, which will have a little bit more options but You're going to focus on where the amenities are, what the whatever, what they're going to see on a tour path and then what are you putting into their space so that they can kind of just take it over? Are you finishing out the restrooms? What is this healing look like it's you know, called The Base building delivery? So that is and some developers skimp. Some go all in which is you want to get the highest branches, the way to go outdoor space. Case covid, really accelerated that everyone wants just a way to just get fresh air even though they might not leave their desk and a 5, just knowing they have that option. So whether it's patio, that's a mixed use tying in, kind of like some green space to the apartments, or the retailer or whatever, the other use is, but Fitness conferencing lobbed, like the lobby experience the ability to get coffee. The ability to walk to restaurants. Or having key restaurants on site, because that's what a lot of office developers. Do they just come and focus just on the office portion? And then the retails an afterthought? I actually learned from my experience, at least. Also, least the union, and they were retail first office second because they were retail developers, it was amazing. The tenants mind shift because they're like, oh wow, there's a Tom Thumb there, I can chop. So and then the floor plate side, it's a must for plate-sized how efficient are your floors? Maximizing the views. What's.

Chris Powers

01:04:14

That point? So how efficient our floors?

Sarah Kennington

01:04:17

So, how much of your floor plate, is common area versus what is actually usable? So, it's rentable versus usable and obviously, tenants want the most runnable, but in the calculation of the building measurements, you're often putting amenities in. So it's just push-pull of like, why won't the amenities? But I don't want to, I don't to pay for it. So it's a balance of just maximizing. And that's what Great Architecture, Firm can help you with. But like the link, for example, they hired Boca, pal, did an amazing job, and they challenged mocha, and they said, we don't want just your typical Square. We want to be iconic in the skyline, so we have kind of curved building and regulated, tenants are the because the tenant represent conditioned basically from hearing feedback from tenants in there, oh gosh. We don't want any curves wants us this perfect box but Polka did an amazing job. It's super efficient and you can actually really maximize your space and you get an architectural a really cool office space or and the building in the skyline. So that's, that's one of the I mean, there's so many things and, you know, the thing about development is nothing is perfect because there's no perfect piece of land and less, you know, you have got 50 acres and you're going in creating but usually if it's Urban your Limited by the site, Ingress egress, what's around it. So you have to work with what you have and maximize it that way, but people want a minute, he's, they want outdoor space. They want a lot of natural light. Yeah, they want. They want to place that their employees went. Wow, I want to be, this is where I want to be. I want to work for my want to own a come here and if I, if I don't come here, I feel like I am missing out.

Chris Powers

01:06:06

Where do people waste money?

Sarah Kennington

01:06:10

Okay. Well, it depends on whom you're talking to a lot of developers would say, they waste money on the marketing of it. Me who's marketing it? I will like dollars there but there're ways that you can creatively. Creatively do that building too much, parking is something everyone's really cognizant of because parking is.

Chris Powers

01:06:31

Expensive and do they do that because they want to do that or because the city makes them do?

Sarah Kennington

01:06:35

That. No, because the tenants are. So we're so reliant on cars here in Texas and I think you know, developers on either Coast or like wow they're way over building parking and if you ask them to Architects they think we're over building. It's just it's it has to be this number because you want to attract great quality credit tenants, and they want to be able to provide parking for all their employees but you don't want to over build it. So there's if you provide too much parking there's always a price point that you're going to. You're going to see different tenants. So like call center tenants, are not going to be able to afford the Uptown Towers. But the call center to its mean, more parking. So you need to provide enough parking to make the tenants have but not too much. So that you're, you know, you don't want to jam people in there's a density issue. So parking is a big study that you know 3 / thousands kind of the magic number getting all of built to 2.5 other. I think people are building to because there's float their sick days and especially for having hybrid you can walk in a half these garage especially Suburban garages, and they're not there they're empty so you can ever spend an Excavating is expensive, but you also don't want, you know, a 20-story garage, right? So you have to have the balance there. Yep.

Chris Powers

01:07:53

When real quick on marketing, like, how, what was your marketing?

Sarah Kennington

01:07:57

But the link? Yeah, you don't have.

Chris Powers

01:07:59

To come. If it is this marketing being, hey, throw parties put out, build a website. Throw a flyer like what is marketing? I.

Sarah Kennington

01:08:11

Mean, I would say, oh, so it's different, I would say, pre and post covid. Okay, so covid has changed the way. We interact is broken. It's we're much hell, yes, it's harder to get people, which is good away from their families and you really have to do something amazing. And they're going to say, okay, I am not going to see my kids tonight to go do this with Sarah and her building or whatever. So you're getting less than the in person in the who they want more of a one-on-one. So, you're not throwing a party and like, No, 400. Other competitors all together to come get a fifty dollar gift card. Those days are gone. Kaizen is approach is more High touch. So, it was a lot of. I mean, they put would play golf with Brokers. We would go deal specific. Then my experience on the union. So if we went back, we were trying to our we sign. Our first deal in 15th. We started that in 15, so we were competing with PWC Tower, which Park District. So we had a well-known, Trammell Crow MetLife. You know, as good as it gets all Cloud, warm Park, probably considered the best real estate valves versus a group out of Arizona, not known off the beaten path which is now like in the middle of everything developer. So we spent at the time this was 15, a hundred thousand dollars which now would probably be to learn fifty thousand dollars on a video that said, this is what a day and day in your life look like at the union and it was, they still have. I think you can still go to the union dollars.com and see the Video. But we literally hired, actors. And, and they, we film them. And we, I sat in a movie production studio is called green grass studio, and we built this and it was are selling. And that I think I was the first time that we saw other markets. There mean, if you go to New York, their marketing is unbelievable centers. And you know, interactive I mean you can they probably do virtual reality, we're not there yet, and we're running were well in our Urban environments where there's less than Land. But I think that is really impactful because then that you're taking what our job is always to take the guesswork out of it. They want to know where am I gonna Park? Where am I going to eat? Where am I going to sit? What am I Poise days? Like in the more that you can tell that story especially while you're building it? Because Dallas is it has to see it. Touch it, feel it to believe it. I think a lot of that is because we're all lineage of really. If you think about it, we're all like ancestors of people that work for Crombie, and we all these people that I have the S&L crisis in the 80s when developments were stopping because you know, Banks were not lending. Now, we're trained to be like, I will believe you when you do it, right? And so creating that story in that sense of place, you know, I mean Grant obviously is just an amazing job of that they have released their about 65% the least two major tenants and that buildings, they're Excavating they have they're not vertical. So the way you tell your story and the Dollars that you spend? I think up front are really, really, really impactful because they want to just let anything, you know if you walked into a showroom. Wow. Or, you.

Chris Powers

01:11:22

Know, when do you start telling the story? So, like, okay, on this, on the link plans are done, like, when are you able to start leasing?

Sarah Kennington

01:11:30

Well? So the link is a really unique case, because, so we broke ground in nineteen, and we were vertigo. So again, the, I believe it when I see it, so it was Like they went, they Kaizen, did a phenomenal job, they have a great relationship with a group out of Florida. They went on a speculative basis, which is it's going to be hard to do for the next couple of years. And no one believed that we were actually everyone's like I will believe you when you start building some, when we were going vertical, nobody was driving our garage. And I think, aren't we, poured our first floor of office? Probably summer of twenty and that building is, there's six, brokerage firms right around there. See, be gentle, you know, everybody that's where I am going. You just drive by not, wow. You see the progress on the link or resul Court, whatever buildings being built the time, but no one saw it. So, we're taking videos, I was personally dropping off gifts, that Brokers house, anything like to. So, to see it. Obviously, there wasn't a lot of leasing happening at 20. That's when we started the tenant like our anchor tenant. I think our tour was in November of twenty. So our lease up was a little bit delayed because of covid, but our perform we crushed her For me I think the performers probably twelve thirteen fourteen dollars over and rent Artie. I obviously was a little bit higher because construction costs kept up so it will end up being a great success. Story covid, probably helped us because we were the only ones coming out of the ground delayed other proposed buildings. So if an ottoman covid we would have least soon because people would have seen it but covid delayed it because it is a small size less than an acre and it's not, there's some mixed use Trent like the mixed use tenor. Ali, let me back up the mixed up. The mixed used. Developments they usually get their anchor tenant. Okay, so when it comes to takes about, it's usually 34 years before it's delivered, then there's a lull and then there's activity again because the smaller tenants want to be able to see where they're going. The big tenants know. They get to control Destiny and obviously the first in gets the best deal. Yeah. So normally on the union we signed our first lease the Monday, after Thanksgiving a 15. I remember that was and then the next one was a month later and that Element delivered. In the beginning of 18. And if I was a little bit in the middle of 18th, I think about that. That's a three year. So and so.

Chris Powers

01:13:55

It's at 10 it was in the market, what three, four years. Yeah.

Sarah Kennington

01:13:58

Right and douses sophisticated real estate market. But if you're talking, the big cities, I mean they're waiting, you know those you know you hear about the Puget Tech leases and Austin and different places their way of.

Chris Powers

01:14:11

a they need a sub leasing agent right now. It's like oh if you need to open an awesome doctor.

Sarah Kennington

01:14:16

Her calling me my numbers on the website. Listen, I think he does. He subscribes.

Chris Powers

01:14:22

How often did somebody sign a lease 34 years in advance? And by the time it's ready, it's like this is irrelevant to what we need now. Not I know it's law. Firms and things is probably easier but where they outgrow it or maybe they just take it and go get more space.

Sarah Kennington

01:14:36

Elsewhere, that I mean, if you're outgrowing it already, you're in a good position because your business is very successful and then you have got leverage to go to another land. Or to help you out of that. The when you're the reverse and it's too much and it's a problem, we're seeing a little bit of that. Now obviously there's a lot of subways space mostly in the Suburban markets because the corporations that haven't been dated employees coming back or just or various situations that doesn't happen, often two years after her, but explosive growth is we have seen that a lot of our first tenant at the link is actually a Fort Worth based company PMG, and they, yeah, Do digital marketing, and he's had explosive growth. He went from 15,000 square feet, thinking, he's going to need 25 signed a 50,000 square-foot and then decide another 4475. So that's a good problem to have. But you with those big corporations, you have planning, you have like head of HR counting debt and you're working with an architect. So that your bulletproofing that you're not having obsolete space and you're relying on The Architects that study all the time. And their job is to predict. What is the workspace going to be like in 3 & 4 & 5?

Chris Powers

01:15:53

Years? And how long does it take to sign these leases a long time? A year.

Sarah Kennington

01:15:58

Am I would say from tour? Sometimes nine months. Sometimes a year, if you're lucky like we just that the we just had McGuire Woods. That was the fat. One of the fastest, fastest Law Firm I have ever worked on. WE they I just had a baby, but they toured it when I was at home with the baby. So I wasn't initial chores. August, but we signed the lease. Whatever, what's, where we know December first? It was signed it yesterday, and that's.

Chris Powers

01:16:26

Fast. Boom, baby. He heard it here.

Sarah Kennington

01:16:28

First. Welcome home our Woods. Well, I am sure. Yeah, maybe you will scoop, Steve Brown with this podcast.

Chris Powers

01:16:37

Okay? So it takes anywhere from a few months to a year. And if you're nine months into a lease and it doesn't get done, it doesn't get done right like from your perspective, is there a point where you're like this isn't going to.

Sarah Kennington

01:16:52

Make well. So I think that's, that's what comes with age and wisdom is. So I don't know if you're, if you're asking from like a broker's perspective, what you end up getting really good and is where to invest your time, because we call it chasing rabbits and the beginning of you just chase rabbits like, oh, this is so exciting. I am gonna come to go. This direction, you're not qualifying and you're doing your all. We have is our time, and there's a rhythm and Deals and you got to take people for your word. I do think or shifting because of the age of people that are coming in coming, in to kind of what I call power, or leadership positions because we had a big like, the about a 15 year, age Gap. So my age people that are coming like, you know, the head of CB is 41 years old. We're a little bit more open with And so there used to be kind of like a hide the ball scenario where? Oh, don't tell it. Like let us lead everybody on and think they're all getting the deal. And then also we're going to sign and three. People are gonna be upset that isn't really happening anymore. It's more like this isn't your deal or your number to wait in the wings. So you kind of we I think communication is a little bit more open. Yeah. Because of just the advancement of people and technology and weren't, you know, we're not faxing things anymore. You know, and just buy a choice if A group is looking at three buildings and to get the know, we always know which one wins. So, but there's always like surprises and hurts and but it is usually because it wasn't meant to be in there. Something better coming along the way but I so any time we have a big, you know, loss, or we didn't get this or this fell through or some betters waiting around the corner, but you have to, you have to have experience in time and wisdom to know that and you have to have the resilience to keep going.

Chris Powers

01:18:43

It's on a building like the link. Yeah, it's fully least. There's nothing much for you to do for the next few years, right? Except is that true? You just keep in touch with the tenants? Like what? Yeah. What do you do? Once a brand-new building is fully.

Sarah Kennington

01:18:56

Lace bill? Yeah, you have of course, keep the tenant relationships up and more. Once I am Once the lease is signed, They Don't Really deal with me as much. It will be more of the owner but there's always, I mean obviously we have two more vacancies to fill. Okay, there's tiny and that men will get least and then you I mean, For the ownership stake. I pray that everyone just as great and happy and there's no Subway says happens, but you never know. I mean yeah. Like PMG could need five more floors. And I am so sorry. We don't, we don't have five more floors. I am sure Cosmo. Go build you another building, so there might be. Yeah, the one thing that's consistent about real estate is that nothing's consistent change. Always happen. So you just maintain relationships and yeah, I mean, I have a portfolio out in Las Colinas that I have been involved with for 13 years at 600,000 square feet. Who's 100% the least four years? Now, we got some space. You just you know things change a company. Got bought Goldman was there, they moved downtown. So you just kind of maintain the relationships, make sure everyone's happy and then when your time you obviously have the relationship with your client and then when the time comes, you're ready for it.

Chris Powers

01:20:05

Okay. Last question on this in Office Buildings. Yeah, we started with be of a tower that is same owner. Our very little turnover and leasing. Like how does of an existing building? What needs to happen for leasing to turn over? Like, what's your pitch to people? Okay, so I can give me your business, baby.

Sarah Kennington

01:20:27

We have got all my secrets, I hope none of my competitors are listening. Well, the office Builders our list, so that's the flip side of this is right. This is it. I am pitching you guys. So usually there has to be an opportunity, you know, either the building's trading, or someone's getting really long. The tooth and they have missed, you know, Miss. feels or someone moves firms and it opens the door. So there's usually something and so that's what we evaluate is. Okay, where's the opportunity? And so there're buildings on the market, have a great relationship with investment sales. Brokers, we follow, who's buying, what? You, help people by. But, 34 commercial, I mean, or principal lead, we're not relying upon anybody. But ourselves, we have outstanding marketing, we have great relationships, we Hustle. So when you hire us, you get us and like the information isn't coming from research to apartment for someone that's never done, a real estate deal. That's, you know, evaluating the job growth, and we all have information, I will have access to information each and every one of us. It's what you do with it that counts. Yeah and I think the fact that we don't I don't want to grow why I have been very strategic about who we associate with where we invest our time. Culturally. I am very slow to hire. You know, covid slowed me down a little bit but, and I was also focusing on getting Property Management going and the other service line so that we could be truly competed as a full-service and provider. But we're, I mean, we work hard. I think that's like we, we also had to work from home, and we're dealing with that. But, you know what I am saying? But if you're back, if you're getting up, get dressed and, and every day, A, I am not if your whether you take if your dream big or small, you have to take baby steps together. So, every day we, this is the fundamentals like, and we go around every which, which building hasn't had success? Where do we need to focus more of our energy? Where do we need to create brand awareness? So it's really like a lot of blacking blocking and tackling and hard work and for some reason people don't want to I am not saying my competitors but just there's been a shift of, I think working less hard. I think young people now, value lifestyle over, you know, their paycheck which is fine but it's more of you. If you, if you want a certain lifestyle, you're gonna have to work for it.

Chris Powers

01:22:55

Right? Well your culture is certainly going to have a lot of you in it and if it has a lot of unit it's going to have the rainmaker thankfully the hustle. All right let us bring it home on. Kind of what you Said you have mentioned just a second ago. You said I wasn't on a tour because I just had a baby, you, you have a family, you're having kids, you're building a business? Yes. How do you kind of do it all? Because that is one thing I admire a ton about you.

Sarah Kennington

01:23:25

Thank you. People always ask me that. I got a text on the way where home is in a home tour and like what are you doing? Like you don't have enough going on. I think when the feelings of being overwhelmed come, there're waves of them. Am I doing the right? Right thing. You have to, you have to put it, put it away and know that everything you're doing. Comes a minute and a day at a time. Yeah. I think there's some quote by Abraham Lincoln that says the best thing about the future it comes at a time so when I get in over my head like I have bitten off more than I can chew. Or I haven't grown my company enough for my gosh. I you know something with my kids. I just okay like God, I think God gives you everything that you can handle. There is a reason that I have a lot of children. But I went from, I quit, my former Peloton, single, and in five years, I have learned from zero to five children, I haven't birth. I have acquired three by marriage. We built a house. We built another business, and if, and we have done a lot in five years, and I think, if I can do all that in five years and still get enough sleep and be happy and not, I am a can do anything but Don't let me, I have a lot of help. I have a fantastic. Manny, I have a weekend. Any, my assistant helps run my life. So like anything, I think whatever you prioritize, my therapist is big on him. He always hits home, godself marriage children, everything else. So while my career is a huge part of my identity and probably before I got married was, was my identity, which is good. Bad. Yeah, I know that it's not my number one and when I Bolin in, when I can and add and I surround myself with great, great people. And that's the thing is, is by me letting go of some control and some of the things that I do, I am giving other people opportunities. Yeah, and I try to do that, but it is a mean, is a lot sometimes I it's a lot. I mean like I was just saying you I have five children and Ed just getting ready for Christmas. My sister and I have a spreadsheet. I am not kidding you. We have a spreadsheet of all the gifts we have to.

Chris Powers

01:25:46

Buy Santa has to.

Sarah Kennington

01:25:48

Buy into, has to buy them but whirring gift exchange. I also I have huge families on both sides, the kensington's and the Hand glazed. I mean nieces nephews. So gift exchange. I have got trainers here. So we have a spreadsheet, and we started behind last month and wrap will be rapping. I mean we I am super Eyes and driven. I got to bed at the same time every day. I get up the same time every day and I think about think I started think I had a planning meeting in August with my assistant and my husband. I said, okay, we have got Halloween to think about Caroline's, birthday, Christmas. Like we have got to throw our company Christmas party. What, let us back into what decisions? You have to make now. So that I am not pulling my hair out in November, so I always and then as soon as that guns and I start kid birthday, so I have got February birthday. At March birthday and April birthday at Gymboree, you know? And as a parent you got to make. That's the one thing you do for them is you make them so special and their day. So not the one thing that you do, many things for them. But I think I just think ahead and I get organized and when I, when that feeling comes of, this is too much. I just, I pray about it and surrender it and because I, I mean, I did stay home for 10 weeks. I mean, I worked from home and I have the baby, but I had a lot of fear of those. I am missing out, was I doing this? And I just kind of Surrender didn't pray to God and said, Okay God you're you know, you're in charge of my business and you know where I am supposed to lean in and lean out. And I think surrendering a lot of that control is what enables me to keep going and take on more because I you know, then I am all in tearing and doing these things. But I also have gotten better at saying I would say no to some things but I do believe that my purpose in life is to I mean I really am I helping others know. I am obviously I my career is for me. But I am an example in the market, I am a female that had children late inner life, I have multiple children. I run it, you can do it. Oh yeah, it's just hard and it's, but I think, you know, being a father and owning a business and then it's hard, even if your wife stays home and mean anything worth doing is hard, it's just, how are you prioritizing it? And when are you tapping out and saying, okay, this is too much. And I do, I travel, I think, people think I traveled too much, but that gives me the fuel and the energy to keep going. Yeah, isn't taking those brakes and coming back and Like, because as the end of the day, I am a competitor in nature and I want to win, always, but too much of that can lead to burnout. For sure.

Chris Powers

01:28:20

I think about it often it sees if said it'd probably look at the third time lately, but it's easier to build a life that you don't want. Then to build one that you want. It's tough to build a.

Sarah Kennington

01:28:32

It is life, I know, but I prayed and prayed for this life and so sometimes when I think I don't On it, I have to remember, this is exactly what I want, because sometimes I am like, man, I would love to be back in my old house for us, single just watching Netflix with my puppy, but this is what I wanted, and this is where I wanted to be. And I sacrifice early for later gains and that's what I wish. People would do more of is when you're 25, you don't need to be rich, you don't need, you know, like having money later is great because you maybe house to pay for children to provide for, you know, education. But when you're a young, Give it your all because it will pay you 10 folds in 10 years, that was always my mentality was, you know, sacrifice now for reward later and I kind of still install them that way but now I am like, well when is my reward? Come I am approaching middle age so.

Chris Powers

01:29:27

I don't have forever. Entrepreneurs are award kind of keeps getting pushed. Yeah.

Sarah Kennington

01:29:31

Keeps you young though? I don't know. It does. You will work forever? I think working gives you a purpose and I love it. Yeah I love being A mom. I love my children but I love working and I love the balance, and we have our routine, and they know when I am there and what I am not, and they love, you know.

Chris Powers

01:29:51

Well thanks for being a great.

Sarah Kennington

01:29:52

Example, my preacher that's a whole lot of fun. Oh good, I hope people get some value in it and always available. If someone needs.

Chris Powers

01:29:59

Some coaching, how can people get in touch with you or your company?

Sarah Kennington

01:30:04

So, we're actually redoing our website. So I am hoping this comes out when our website is done but 34.com. It's 30 and for spelled out. There's a hyphen between all of our contact information is in there. Cool. Yeah, we're growing. Our 34 is our services and then if we owned buildings, that's in a different entity. But all my information is there. And.

Chris Powers

01:30:24

What do you around to? Once you say, yes.

Sarah Kennington

01:30:26

The biggest Dallas office owner, the right? Let us do that. But a date out there, I think if you put the data out into the universe and.

Chris Powers

01:30:36

All right, well, I would say by 2034 There we go. That's a long day, but I think you could accumulate a lot of office between now and right. As you have 12.

Sarah Kennington

01:30:45

Years, A guy like.

Chris Powers

01:30:47

That. I mean you might put that bat down by then.

Sarah Kennington

01:30:50

I do is one of my I would love to develop a building at some point that its development is.

Chris Powers

01:30:55

Hard, hard, hard sport. But it's a.

Sarah Kennington

01:30:58

Whip. It's a full one of my clients said, it's a full contact.

Chris Powers

01:31:01

Sport it is. Yeah. And it's getting it just gets.

Sarah Kennington

01:31:03

Tougher. Yes it does. Is that science? One different stuff. Yes.

Chris Powers

01:31:08

Alright, thank you so much. I am enjoyed it. Thanks so much. Everyone, it's Chris here again. Thank you so much for joining me on this journey. If you enjoyed the show, please follow the show on Apple Spotify or subscribe on YouTube. Thanks again, and I will see you on the next episode. Chris Powers is the founder and chairman of for Capital LP, all opinions from Chris and guests of the fort podcast are solely their own, and do not reflect the opinions of for Capital LP. This podcast is for informational purposes only and should not be relied upon for Real Estate. State or investment decisions. State or investment decisions. The fort with Chris Powers is produced by straight up podcasts. The fort with Chris Powers is produced by straight up podcasts.

#254: Sarah Kennington - Founder of Thirty-Four Commercial - The Queen of Office Leasing

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