#303 - Chris Hatch - Principal @ NNN Income - Born to Develop NNN Properties

Chris Powers: Chris, I like your name. Welcome to the show. 

Chris Hatch: Thank you. Thank you for having me. 

Chris Powers: If you're listening to this, you can read his bio in the notes, but we have much to cover today. So we won't start with how you got into the real estate business. We know you're in it. We'll start with Salt Lake City, someplace I've heard much about but have never been here.

It's a fantastic place—an excellent place to invest. Please describe a little bit about Salt Lake City.

Chris Hatch: Yeah, you bet. It's an effortless city to sell. It's an accessible state to sell. I'm a sixth-generation Utahn. We've been there for the long haul. It's interesting.

Denver likes to sell the idea that it's a city in the mountains and adjacent to the mountains, no doubt. Salt Lake is literally in the mountains. When you fly into Salt Lake, you can be skiing. You can be standing at the airport and then have skis on your feet and go down the hill within 45 minutes, which is pretty impressive.

It is an unrivaled situation throughout the Western U. S. of snow quality and what it offers there. It's an exciting town from that perspective. There are lots of outdoor focus and great things going on. It's a family-centric environment, and the entire community is centered around families.

I have five children, and my wife and I are raising five kids in Salt Lake City. That's not abnormal, so that's more normal than it's not, which is interesting. And it's just incredible; we love it. You get four seasons; you do get all distinct four seasons. There's excellent snow, and every 1 of my kids is skiing, which is fantastic.

We do lots of outdoor activities. 

Chris Powers: Is that why the tech industry? What do they call Salt Lake City for the tech industry now? 

Chris Hatch: Silicon Slopes. 

Chris Powers: Okay. So is that why they're headed there? Because of everything you just said? Or are there tax advantages or a better business climate?

Chris Hatch: Yeah, I think so. If you're the 2nd or 3rd rung-down developer in San Jose struggling to pay for your two-bedroom apartment, that's 4000 a month or whatever it might be there.

And you're Frustrated with your quality of life because you might have to be driving 50 minutes each way on your commute. Salt Lake has become a straightforward destination to have the back offices for many of these software companies. And what it offers its employees is an opportunity to have more affordable housing.

They can buy more houses, rent more houses, have more access to outdoors and other activities, and it's just a more effortless and cheaper climate to live in. 

Chris Powers: Has Salt Lake been growing for a while, or is this more recent than it seems to be? For a Texan, I hear about it a lot more.

Has this happened for 20 or 30 years, or maybe in the last decade? 

Chris Hatch: It's a good question. The Texan has been more in the last decade. What's more, it's explosive over the last decade. Until now, Salt Lake has been growing, and we've been on the radar.

And for what you do for a living, we've been on the radar for a long time. Promontory Point is where the two transcontinental railroad companies came together in Northern Utah. So you have three different things. You have the Long Beach Port. The Oakland port and the Seattle port, the rail line coming out of all three converges and comes together in Salt Lake, making that huge. 

We also have the intersection of I 15 and I 70 for all the traffic through South Central United States. And then we've got the intersection of I 15 and I 80. So from a truck route and rail standpoint, it's a critical point from a distribution standpoint.

Chris Powers: Okay. All right. We're going to take a break from real estate for a second. We were talking, and you told me a story. One, you said in Salt Lake, having five kids is normal. Five kids is a lot. I've got three, and that's a lot. But then you told me a story and said we don't half-ass anything in our family.

And this is a great story. So tell the story that you just told me and how you grew your family from four to five kids. 

Chris Hatch: Yeah, you bet. So we had a girl first, then a boy, then two girls. My wife gave me my wish when we were pregnant with the fourth. I had each time I wanted to wait until the child was born to find out what the baby was.

She told me that each time. On the fourth, she finally said, look, we've got two girls and a boy. You can have your wish. We'll wait. And we thought that our daughter was going to be a son. That's how we felt. So we were convinced that we felt everything that way throughout the pregnancy.

She was about seven or eight months pregnant. And it was one of those quiet moments at night when you got the lamp turned off and lay there in bed, gathering your thoughts, thinking about what happened for the day, what you have, for the next day, and my wife says.

We need to have another baby, and I heard her and said, I know I'm so excited for this baby, and she said, no, I think we need another baby. And I said, no, I'm just so excited for this baby. I can't wait. She turned the lamp on, sat up, and said, you need to listen to me.

We need to have another baby. And I said, look, you're seven months pregnant, let's take it easy, maybe some hormones, some pregnancy stuff going on. Let's take her easy. Let's figure out what, take life as it comes here. So she stays with me for the next few months about it. And then we are actually in labor and delivery, and we've successfully, she's delivered our 4th our 3rd daughter, and everything's gone great.

Doctors left the room; it was just her, me, and the baby. And she looks at me and says we must have another baby. And I said, Oh, you got to take it easy; let's breathe. Let's think through this. We just had this baby. So she keeps up on this after me for a few months.

And finally, she tells me, and this is the end all, if you're a person of faith in your relationship with your significant other, she said, I feel like we need to have another baby. And you can't deny those feelings. Those are feelings from a higher power. And I said, fine, I'll give you and God 24 hours to tell me that we need to have a baby.

I will open my heart for 24 hours. And I don't know about you, but I don't frequently have dreams. And that night, I went to bed and dreamed I was playing with a young Polynesian baby boy. And I woke up, and not only did I have the dream, I can still envision the entire dream right now, as I'm just telling you this.

And it was confirmed for me. So I woke up and said, this is what I dreamed. And my wife said, okay, I have no idea how we will accomplish that, but let's go to work. So there's a pretty hefty Polynesian community in the state of Utah. And there's a lot of cross-synergy between the Mormon church and Polynesia.

And there are a lot of people there, and we reached out to more or less everybody we knew to say, does anybody know of maybe a troubled situation or maybe a teenage pregnancy situation that was unfortunate? We'd be happy to help place a child into a home and be a 5th child and lovely home and opportunity for the child to be raised.

And so we reached out and spent a lot of time doing that. We couldn't find a path, so we finally found another mom who had adopted a baby from Tonga, and she lived in San Francisco. She's an adoption attorney. She had adopted two babies from a birth mom. And within a month or two, that same birth mom became pregnant again.

And so she called us over the Facebook video, which you can do. And so we got a call from Facebook video, and it's this lady from Tonga, she lives on this Island of 300 people called Nomuka. And she said, I'd like to come to America, and I'd like to give you my baby. And so we were on the high of highs, right?

We had a birth mom. We were excited. It was a great thing. But as any adopted, anybody who's gone through the adoption parent process can tell you there are a lot of highs and lows through this period, and there are moments where you think everything will be fine. And if you add international adoption, the variables go way up, as did ours.

And so the laws in Tonga required that we live in Tonga for a year if we were going to adopt a baby from Tonga. And so what we attempted to do is to have her come. She had decided that she was going to come to the US on a visa. And so, two times during this pregnancy, she went to Fiji, the closest consulate office, to get a passport to come to the US and a visa to come to the US. And she got denied the first time. And we were disappointed at the time. President Trump had tightened down the border at that exact moment. And so it was more challenging that we're not granting many visas. And then she went back and attempted it a 2nd time in November.

And it was over Thanksgiving weekend, and she attempted a 2nd time and got denied a 2nd time. To give some perspective, for the birth mom to get to Fiji, she had a boat that came by Nomuka twice per week. So she had to get on the ferry. And then get to Tonga Topu, the main Island in Tonga.

And then she had to get on a flight from there to Fiji, which was only every few days. Each time we go back and forth, you could talk about as many as seven or ten days to travel one way. So she got denied the second time, and I'll always remember this. We were down in Southern Utah.

We were having a Thanksgiving celebration with my wife's family. And she got denied the second time. And my wife went home to her home island and gave up on the adoption process; we didn't know when the baby was supposed to be born, but we just knew it sometime soon.

Chris Powers: And why didn't you know?

Chris Hatch: There are no hospitals right on the islands. Even in American Samoa and Fiji and some of the more advanced places, they have clinics but no ultrasound machines. So no clue. You're measuring with a tape measure and guessing. It was an exciting period.

So my wife was so depressed. She gave herself the flu and was sick. I took her to a client event in Southern California the week after Thanksgiving to cheer her up. And back to your comment, as we walked in here, we sat there and decided we don't have anything in our family.

Ever and so I'll never forget this other moment during this process. I was sitting at the Koi pond by Nordstrom in fashion island in the mall in Newport Beach. And I just sat there, and I hot spotted my phone, got my laptop out, and bought five international flights for five days away, right?

And so the idea was that my wife would take our two younger daughters and her parents, who were all flying to Tonga. And then, our birth mom would fly to American Samoa, so they would all travel together as a party. And by the time I stood up, my credit card was melted.

Almost clean off, I booked another flight for myself and my two older kids for December 21 after they left school for the holiday break. And it was a rough period there financially. But we decided we had to commit to it, and we had to go for it.

And the most unnerving feeling, besides the fact we had no idea if this was going to work, is we had no idea when we were coming home. And so my wife, while I'm doing this online, is frantically running around the mall buying things because she thinks she will be living in American Samoa for between one and three months and has no idea.

So it was a wild time, but long story short, if we fast forward, the birth mom could travel to American Samoa, and she went there and birthed the baby. We named our son Junior and wanted him to have a nice Polynesian name. There you go. Rest is history. 

Chris Powers: That's an incredible story.

And this is for anybody listening. It's who you're dealing with in the real estate world. They do not have assets. That's a fantastic story. How long were you all? How long did you end up being there? Was it one to three months, or was it relatively quickly? 

Chris Hatch: Yeah, it's a good question. She arrived the first week in December on the Island.

And then we all left together the second week of January. So my older kids and I got about a three-week vacation there, which was lovely. And then they got a little bit longer. 

Chris Powers: Awesome, man. Thank you for sharing. 

Chris Hatch: No problem. 

Chris Powers: All right. Let's move back into real estate precisely. I want to start with; what much of your persona is on Twitter and what you go by triple net income on Twitter.

So let's start with that kind of world. How did you get into it? And then we're going to start breaking it down slightly. 

Chris Hatch: My grandfather is my most significant business mentor and an oil and gas landman. And so he bought mineral interest all over the place throughout the kind of UNO base.

So the Eastern side of Utah into the Colorado side, up into Wyoming, and then started working down on the New Mexico side of the Permian. And then it was about in the seventies, he diversified and started building single tenant Texaco's on build the suits. And he built a handful of those and started building Arby's following those.

And so, as I grew into the business, my dad was a shopping center developer for Albertsons primarily and throughout the intermountain area. And so I grew up hearing about it around the dinner table. And I knew I wanted to be a real estate owner from a young age. And so a lot of my path was trying to pick the best path to get there.

So I started as a tenant rep broker in 2002 because, at that time, that was the best mentor we could find for me to work for in the marketplace. I worked for two agents in Salt Lake that were industry leaders, and I was handed off to clients like Starbucks, Wells Fargo, and Wendy's. And my job was to find more locations for them.

Chris Powers: Okay, essentially, you're a site selection guy. Yeah, correct. How would you define a great site selection person? What goes into that? 

Chris Hatch: To this day, I can tell you, I have sat at just about every single intersection in Salt Lake County for at least 20 minutes sitting at the intersection, counting cars, trying to figure out which is the more am traffic-heavy side of the road.

That's a Starbucks exercise. All right, trying to figure out which side of the road gets more traffic in the morning. You can do that in the morning or at night. Whatever you count at night is inverse. And you sit there. So hands-on is the answer to that.

Chris Powers: So, what do you look for, Arby's? How many lifted trucks drive by this side of the road?

Chris Hatch: It correlates with beef, cheddar, and truck nuts. 

Yeah, Arby's a little more complicated. That's a more demanding customer to pin down, and it's shifted significantly for them over the last 20 years. It's easier if you speak, stick to a brand that's more, just something that's been focused on over the last couple of decades.

It's much easier to find a Dutch Bros, for example, than it is to find an Arby's. 

Chris Powers: We're talking about Dutch Bros. We'll get there in a second. Do most people come to you and say, Okay, we want to do 10 Dutch bros or 10 Wells Fargo's in Salt Lake City. Find us the sites. Or are you out looking for sites knowing? Hey, this is something Wells Fargo might like. I'll call them.

Chris Hatch: Yeah, there's a perception with a lot of the younger people coming into the commercial real estate and, or just newer people into the industry that they often think that at some point. This big switch flips, and then everybody calls you and says, Hey, can you handle this for me?

It's just like the site selection thing. You have to be relevant; you have to be present. It's hands-on, and I find if you're in the path of growth and if you're tying up dirt and you're starting to work on conceptual site plans, and then you're putting it in front of customers, there's more of the back and forth where the customer might say, Hey, this doesn't work for me here, but I'd like to go down to this intersection.

But it's not so much that you're sitting in a chair, just waiting for the inbound call. You have to be out in front of it. 

Chris Powers: How do you determine, from your perspective, what would be a tenant that you want to work with? What do they need to know about the characteristics of a tenant you like working with?

Chris Hatch: Excellent question. For me, you have to find the backend. So you have to be able to sell the asset on the backend or put a long-term loan in place. That unfavorable financing, and what I mean by that is that we've been tempted and looked at several like day-care deals on build the suits over the years, and they're interesting.

They're much harder to finance on the back end. When covid hit, that asset class became toxic overnight. It's much easier to finance something like a household name that's a fast food drive-thru restaurant or an auto parts store or something along those lines. 

Chris Powers: Like a Starbucks is easy as it's like Amazon.

Chris Hatch: That's correct. 

Chris Powers: It's almost like the government; it's as good as a government bond or something.

Chris Hatch: I think once a tenant has a hundred units, so on these more significant franchise deals, if they have a hundred restaurants under their belt, Or they're public and corporate, a corporate tenant with a publicly traded ticker, it's the same thing.

They're the same size at that point. Once they reach a hundred stores, they have a CFO, a CEO, and an asset management team. They look and behave exactly like a company does, and it's much more significant. 

Chris Powers: And do most companies that get to a hundred units, did they usually do that on their corporate balance sheet to get there, or are there sure developers that'll take a risk on them at 20, 30, 40 units and help them grow to a hundred?

Chris Hatch: Typically that you do see developers building for them well in advance of them being at a hundred, and the private equity side of things has changed the game over the last, this last cycle, let's call it since 2010 to now, and the private equity companies now are getting involved with brands at 20 to 30 units.

And so once the private equity company has bought them, it's not like their balance sheet becomes much better. They still are dealing with 20 or 30 units. And the truth is, you look at many of these 100 store operators right now; some of their balance sheets are rough looking at the exact moment.

So it's just expensive to build stores. It's expensive to grow. It's expensive to gain new customers. And so many of these P companies have started stepping in much earlier. Once a good P company is behind something, we'll look hard at it. 

Chris Powers: All right. Let's talk about that for a second.

So you describe what a great tenant would look like, but I'm sure everybody would like to develop for Dutch Bros, Starbucks, or Wells Fargo. How do you get into bed with these folks? How do you meet them? 

Chris Hatch: Yeah, you find the site. You find a site they need. And that is really; it's just a one-on-one thing.

You must think through who the customer is and their best stores. And then, it's finding the right site in the right spot. And most brands, once they get to, call it several hundred stores or more significant, are apprehensive about a rookie developer building for them. They get a little nervous about that.

So some of them will ground lease, and that's an easy way for you to get your foot in the door. If they won't ground lease and insist on you building a building for them, then typically, if you have the right site, they'll work with you no matter what happens or the deal structure.

Chris Powers: Okay. So what do you mean that they'll ground lease? You might find the site, but they must trust you to build it. So they'll just ground lease it and build it on their own. 

Chris Hatch: Yeah. Don't trust, or the market cycle is just more advantageous for them to build their building. So, right now, for example, we just completed a quick crack and opened a pad that we delivered the pad for them.

And then they built their building that ground lease from us. Jack in the Box will open within a few months on the adjacent pad. And they chose to build their building as well. 

Chris Powers: Okay. But I'm Chris. I just showed up at ICSC. I'm fresh out of college, or maybe not even out of college, but I'm looking to get an in at Starbucks or Dutch Bros.

Like, how do you build relationships with these people? Is it just cold-calling them? Hey, I have a great site. They end up liking it, and they're forced to know you, or there are better ways that you've built relationships with these people.

Chris Hatch: Yeah. It's just a human making the decision there at Dutch Bros.

Chris Powers: And not a bot.

Chris Hatch: Yeah. No, it's not a bot, and it's not somebody in a boardroom. Let's take Dutch Bros. That's a great one, for example; it's a pretty easy human to talk to. The culture at Dutch Bros is that it filters from the baristas in the parking lot, taking your order up to the corporate level. 

They're the same type of personality all the way through. So they're easy people and approachable to talk to; they each have a booth. Each of these retailers has a booth, so you can meet with them and talk to them. Let's see; we had four rookies at this year's ICSC event.

And two of our rookies met the chief development officer for planet fitness. And they met because they won a contest that planet fitness was doing, where they were sponsoring something and giving away some planet fitness swag. They freaked out and got excited because they won something. And next thing you know, chief development officers out introducing themselves, saying hello.

Chris Powers: That's awesome. Then how does the relation do? And again, it's just building a relationship, but you must have the chop. So it's one thing if I bring them if I bring Dutch bros one site, but how do you go from being? I brought you one site to say I'm your preferred person. And what do you have to have done to get there?

Chris Hatch: I don't have that status with Dutch bros. I often tweet about Dutch, and we have several deals with them, but I'm not their preferred developer in any of their markets. I would like that. So if you figure that out, let me know. I've just continued to put suitable sites in front of them that they would say yes to.

And if you stay on it with any of these retailers, the process for them has become much more complex over the last year and a half. As soon as interest rates started moving the cap rates, the backend exit values also moved for these tenants. And that meant that any developer that needed to be better-heeled and ready for a bit of a blip to go through the marketplace instantly had more trouble financing the deal, putting the deal together, building the deal, selling the deal, everything.

And the translation there on the ground is that if you are a real estate manager and your area to expand in with Salt Lake City, you had 12 stores earmarked to open in 2023. As we were going into the fall of 2022, you at least had three or four developers call you and say, I'm not starting this project.

So now you have to go back and report to your boss and say, Hey, instead of 12 openings, I'm going to have eight, or I'm going to have nine. And so you could imagine the ripple effect as you go through the country. And so one of the things anybody can present to any retailer today is a clear path that they're going to get the job done.

Chris Powers: And then if you take like Dutch Bros, but some of these stores that are maybe like have a more specialty build out Dutch Bros is like a, I go to Dutch Bros all the time, by the way, I get a nitro cold brew. I'm like, not one. I don't get the dressed-up milkshake-type stuff. But when I always go to them, I'm like, man, you look at what they sell for online.

That's this little 800-square-foot or a thousand-square-foot box, a massive piece of land. Cause they've got a double drive-thru and everything. But then you might go to a, we're going to talk about the conversion to Olive Garden in a little bit, but then you go to some buildings that are like 4 or 5,000 feet, maybe a lot more multi-dimensional, more tenants might fit in there if Olive Garden goes bust, which they never will because they offer great breadsticks at a fair value.

How should one consider buying a Dutch Bros versus a company with a building that is? You could see more potential tenants occupying that building. 

Chris Hatch: The most versatile building in the drive-thru world is a 3,000-foot drive-thru. If you rewound the clock, ten years, the most versatile building would be a 3,500-foot building.

And if you go another ten years back, it would have been a 4,000-foot building. Kitchen sizes have become much more efficient. And there's also just far less food being cooked on site. And so much food prepared through our drive-thru is going through a commissary.

And it arrives at the restaurant. And so it's a version of a lot of warming and then some cooking. So what's interesting about that is the size continues to shrink. It's not going up. A lot of the new fast food that's going in right now is shrunk down to 2200 feet, which is a petite size for what it used to be.

Customers are sitting in the dining room less than they used to. So drive-thru percentage of sales is much higher than it was. And it's that trend that continues to move upward. So it's easier to weigh in if you're looking at a building size and other tenants that might go in there.

But at the moment, 3000 feet is a versatile size. I also like 3000-foot buildings because they fit three-quarters of an acre to acre sites. That site size has stayed the same. So over 20 years, that site size has been the same thing. 

Chris Powers: Johnny, do you sit in these places? I feel like I grew up.

My grandparents would take me to McDonald's and throw me in the jungle gym with the nasty balls that had just been caked by thousands of kids probably puking on them. And I just lived in those balls. That's over. Nobody's building jungle gyms inside their units anymore.

Chris Hatch: Yeah, that's correct. It's very infrequent that you see that. And what's interesting is that the concepts that you see more diners sit in are more like a Chick-fil-A or a Culver's, and It's more of an experiential fast food environment. But fewer customers are sitting in the lobbies, just the usual middle-of-the-fairway fast food retailers like Burger King, Wendy's, and McDonald's.

Chris Powers: Yeah. I want to take a step back for a second. So we talked about site selection—traffic matters. You just said something interesting about if you're doing a 3000-foot building, you like it because it works. Three-quarters of an acre and acre. Is there anything else like site related that matters?

Zoning, you got to have it zoned, but typically frontage on significant retail it's probably already zoned, which you want. 

Chris Hatch: Yeah. Every drive-thru user worries about one thing when they look at a site. How do my customers get into the drive-thru? That is the number one thing. Every one of them, flag and brand, thinks the same thing.

How do my customers get into this drive-thru? Ingress is the most essential feature of any site. 

Chris Powers: Okay, can you go deeper on that? Is there something you could pick up just by looking at a vacant land site to think they will hate this? Do the people need help getting in?

Or is it always, hey, we can figure out how to get them in? 

Chris Hatch: A raised median is typical on a more significant highway site or some state road scenario. So what that means is you only have a right in, right out. So suddenly, that site is dinged versus if it had full access.

If you could make a left-in, that's a big, that's a significant change for retailers. That's one thing to look at right away. And then another question is that most of the astute retailers will then ask whether there are plans to add raised medians in the future. So some of that is being spent up front with the DOT you're working in and just sitting down with them and saying, what are your plans for this intersection and the city?

Sitting in a corner is always an advantage to sitting mid-block. And can I access the corner if you are mid-block or two, three, or four pads off the corner? Cross-access is always a better thing than no cross-access. 

Chris Powers: What's cross-access?

Chris Hatch: As a developer, when I can get a legal right to cross the other properties, I have access to additional ingress-egress points.

Chris Powers: So you might be building a Burger King, and I can cross Panda Express, crispy creams, and Arby's to get to my Burger King. Cause God knows that's like everyone. 

Chris Hatch: Yeah. And what's interesting is how much time in our lives. And I tweeted about this yesterday, but everybody thinks development is putting buildings up super fast, and it's so fun.

And it's fantastic. And the sad reality is it's reading, a hundred-page document after a hundred-page document. And cross axis easements are a great example of that. When you show up, and you see a pad, if the seller of the land doesn't already have a cross axis in place, and let's say it was a CVS on the corner.

And then there was a band express to use your example, and then a multi-tenant building, but there needed to be cross access to your fourth pad. Getting that cross-access might be the most challenging part of the entire development process. 

Chris Powers: And real quick, go back. What is a raised median again? 

Chris Hatch: The raised median is when there's just an actual curb in the middle of the road where you cannot cross.

Chris Powers: Oh, I got you. 

Chris Hatch: I need to remember we're in Texas. So like your trucks, you guys drive over everything. 

Chris Powers: Those are like ramps. We play off the job.

Chris Hatch: So that's intimidating for cars and some trucks, and depending on what it is, sometimes they'll actually do a six-inch, like an actual gutter, and a curb into and have a gutter there into a medium. 

Chris Powers: Yeah. It's a lifted truck, or you might see a cowboy just on his horse, just flying down the center median. As you'll see often, Walgreens might be across the street from CVS, or is there any time, like if Chick-fil-A is going somewhere in their lease, are they usually putting, hey, we don't want a chicken store anywhere else in this development, or like what type of competition hurdles do some of these tenants put up, if any?

Chris Hatch: Yeah, this is the number one sale point for why you would do industrial, is because you don't have to deal with any of this. Exclusive use provisions are one of the more challenging parts of a shopping center development. And I define shopping centers as, unlike traditional anchors, without parcels out in front of it.

Think of a shopping center as anything more than one pad. So we have two pads or more. And so that could be a grocery anchor shopping center. It could be a three or four-pad development. It is so brutal because many tenants will restrict five different uses. For example, McDonald's restrict smoothies, and I know that McDonald's does smell sell smoothies, but at the same time, are they a competitor to Tropical smoothie?

Are you going to go to a tropical smoothie or McDonald's if you're going to get a smoothie? And I don't think that's the case. It's a different customer pattern. So you have to be careful when you're doing multiple pads in a shopping center or multiple properties in any shopping center environment to make sure that you're defining your exclusive use so that your tenant can Run a very successful business plan but at the same time so that you can work through the remainder of your acreage.

Chris Powers: All right. You've done a lot of these deals. Every company has little provisions in the lease, but you probably did things in the first few deals you don't do now. Is there anything that comes to mind when I say here are some best practices for structuring these leases so that they are, maybe not more favorable, but at least protect the landlord may, be more than a novice might do on their first deal?

Chris Hatch: Yeah. The strip mall guy tweets all the time. He hates options, and I 100% concur entirely with his opinion. Options are one of the most painful parts of the business. What's also interesting is I'm mainly building single tenants, so often, my primary term is ten or 15 or 20 years.

And then, the tenants will ask for 2 to 4, sometimes 6, 5-year option periods. And a five-year option period is just worthless. My debt has usually rolled. So typically, you will finance your property, and your debt will roll when the primary lease term is up.

And then, as you roll into five-year option periods, you have nothing. You can't have; there's little to refinance. There's little from a collateral standpoint, from the bank's perspective. And so you get dinged as far as loan proceeds go when you roll through those five-year option periods.

We have done several renewals recently where it's a 20-year term, and then we'll provide two tenure option periods because that gets you more time. So that's been one of the clauses we like to use. We spend much time and energy ensuring it's an absolute net lease.

So this is interesting because there are so many different definitions of what that means in retail. When I say absolute net, I'm trying to pass through every single cost of the tenant and have no management obligation whatsoever. If it's a single tenant or multi-tenant, I want to have a total recapture of all of my management to run a shopping center.

I'm not trying to turn my management into a profit center. I want to cover and run the cost-efficiently. 

Chris Powers: We'll spend a little time on this. We've been talking a lot about the development side. You also own a brokerage company where you are also helping developers that do this kind of stuff.

But when we were talking, you said one of the reasons why you all are good at that, and you said, if I have leasing guys going into a meeting with a developer, you show up to the meeting with a developer hat on. Take the ball and run with what you meant there. 

Chris Hatch: Yeah, you bet. It's a regular thing for us to go together and for me to show up with leasing and the perspective that I'm offering in any meeting or meeting that we have internally at the office that our client isn't necessarily privileged to on every one of those.

Cause we don't bog them down with all that detail, I'm constantly providing a developer's perspective. And so it's as though 1 of their development team members is sitting in our office all the time to some level. And our leasing team might be working through it, and they might have.

They have a vacant pad and the opportunity to develop a two-tenant building or a single tenant. And 1 of the things, for example, that I could point out to them right now if that were in Utah is we're waiting about 55 to 60 weeks for lead time for electrical gear on multi-tenant buildings.

Versus a single-tenant building, switchgear is about 60 days. Knowing that is a huge savings of time and energy going into the brokers because as they communicate back to their developers, the developers might be aware of that, and they may not. And not to say that I know more than our clients are way more informed and have lots of knowledge to share with me.

It's just another set of eyes. It is what it is. 

Chris Powers: And is there anything different? If you show up as representing the tenant versus representing the landlord.

Chris Hatch: The tenant side is unique because it helps the tenants understand the landscape the developers are trying to work through.

We are often working with various developers on our tenant rep assignments. And so we have lots of developers over there. Some of them are seasoned folks. Some of them have yet to deliver as many buildings. And so it's just working through the process and then ensuring that we're tracking with the developer timely and following up to ensure that whatever our tenant's expectations of timeline are hitting what reality is.

Chris Powers: This was a huge thing that got asked on Twitter. But it's just a joint discussion, especially for single-tenant stuff. Why would I not buy a treasury? Why would I buy a single, tenant triple net deal when I could buy a treasury right now? 

Chris Hatch: I can't tell you how frequently somebody asked me that on Twitter.

And it's incredible because I don't know how often I've sat with a buyer or investor into a single-tenant deal, but it's several hundred. And never once in all of those transactions have I ever had a single buyer or investor into a Single tenant and once asked me the question of why would I go into a financial product over this?

They don't even discuss whether I should invest in the stock market or bonds. I want to buy another building. That's typically what the entire dialogue is all about. I have made this money over here doing whatever or selling a building, a piece of land, or my business.

And I would like to have cash flow, and I'd like to buy a single-tenant building. That's no maintenance, no management.

Chris Powers: So it's just a longer time horizon.

Chris Hatch: The much longer time horizon; typical for us to sell an asset to a family that might have 21 other single-tenant properties that they own.

And this is the 22nd, so most of our time is spent when we get a client like that just trying to figure out what else they own, especially if it's a newer client for us and what their portfolio looks like. And similar to the way a financial manager might balance your financial portfolio. If they've got five burger tenants, let's say they own 20 buildings, five burger tenants, ten auto parts stores, and five gas stations.

We suggest we diversify away from that and start buying coffee or some other product type not recommended.

Chris Powers: Okay. You just answered my question. So If you own 20 or 25 of these, you tend to care what industry your tenants are in. There's nobody that's. I don't care if they're all Burger King.

It's all just a check. 

Chris Hatch: It's historically there. We always get calls from customers; maybe their dad or grandpa was the Kmart developer. And so they have 30 Kmart still in the portfolio that has now become other things, or maybe they were some grocery store chain, and they've bought a portfolio of 12 Safeway's through the Midwest or wherever it might be.

It's a common theme to have somebody clustered in one tenant. When we're doing the advising side of that to give them recommendations, they still need to diversify their risk position. If Safeway's in your portfolio and Safeway went bankrupt, that would be a massive problem for you.

So we're looking at tenant and type of use both.

Chris Powers: Do you only like it when you develop? Are you continuously developing to recap then and hold, or are you developing to flip? Like, how do you, for somebody that's in it, what you want to hold on to? How do you decide what goes in your portfolio?

Chris Hatch: We now decide that we're capitalizing on the deal.

When we decide how to fund the deal and what debt we will put on there, that's the moment we decide what our end goal is. And that decision is balanced in many different ways. One is looking at the asset's horizon and when value will be maximized.

If I finish building, a build a suit, Wendy's, for example, it's likely not in the exact moment today because nothing's selling at the exact moment today. But when it's a favorable cap rate market. And somebody will offer me a cap rate at the back end. That's the highest value I will get for 20 years out of the asset.

It doesn't make much sense to hold it. If I have partners, there's no reason to hold it. 

Chris Powers: And on that topic, like the 1031 money run dry by this point. I knew that when rates started going up, you all's asset class still was the asset class that was moving because of smaller buyers, lots of 1030 ones.

Has that slowed down? Is the market quiet right now? 

Chris Hatch: We sold a Cafe Rio in August of last year. Cafe Rio is a hundred-store Tex-Mex chain based out of Salt Lake City. So we sold a Cafe Rio in August last year for a four-and-a-quarter cap. We closed a Dutch Bros in Denver at a 3.95 cap in the same month. And then the money shut off. It was gone in September last year, not just for us. I just felt like, in September, the money was just gone over. There was no 1031 money, about six months from the time they started raising rates. 

Chris Powers: Yeah. Okay. Fair enough. All right. We're going to get into some fun stories, but before we do that, going back to the you're a site selection person.

We've talked a lot about triple net income. I want to talk a little bit. You're doing multifamily development. Why did you choose to get into multi, and what's going on in the Utah market and the markets you're in? 

Chris Hatch: Yeah. Utah has a similar phenomenon going on with California.

People are relocating to our state that you have and others. And we have had a lot of that immigration. We also have a lot of natural growth back to the five kids in my household, which is normal. So we're just growing, and our pace of growth is higher than it's been for a long time. And our housing is Grown quite expensive.

We have housing problems similar to many other cities. The one unique thing, though, is that we have far fewer multifamily doors constructed in Utah per capita than in some of our surrounding states. And so, there is a great business case for building multifamily housing.

And our focus is a walk-up product, a residential suburb-type product, and then we're also building some podium products and building townhomes for rent. And so there's a good business plan for that. We have moved more into that because I'm a site selection person.

And so we wanted to diversify more into the residential space. We determined that it would be better to run that ourselves and continue to try to drive through stuff ourselves and be good at everything. We got a little concerned we were going to be spread too thin. So we partnered with a best-in-class operator in the Utah market, a local home-grown product.

And so we've partnered with their development team, and we're working on several projects during the kind of 2017 to 2021 period. It was tight, and finding good multifamily sites took time. But because we're site selection people, we had access to many sites. And so we didn't have a tough time finding plus sites.

So we focus on the absolute plus gems we love. 

Chris Powers: Okay. So what checks your box for a great site in these markets? 

Chris Hatch: We are moving forward on a project in Riverdale City, a bedroom community. It's located about 40 minutes north of Salt Lake City.

That's an exciting opportunity because there just has been hardly any product that's been constructed over the last 20 years in the entire sub-market. Oh, so we're almost one of the only offerings. We're under construction on a project in Chubbuck, Idaho. Chubbuck is a sister city to Pocatello, Idaho, and south-eastern Idaho.

And in that sub-market, there has not been a project over there hasn't been a project over 100 doors delivered until a recent project was just completed. That was a 300-door project that has leased up phenomenally, and we are under construction on a 200-door project. And that's important because the amenity deck that they were able to offer and that we can offer is much better.

It's far superior to the existing legacy product in the market. And so in that environment, what we're delivering is an opportunity for, it's just a better mousetrap, right? You're leasing space at the end of the day and have a better-looking offering for the customer. 

Chris Powers: Let's spend some time on, we can call it story time, but just some interesting things we've talked about.

One of the things we talked about that was exciting, and you said it is something that you've had experience with is what we would call a family breakup. Please describe the situation and what you all do to help families dispose of assets. 

Chris Hatch: Again, this is a common thread.

And many people on Reach Wit talk about how they never want to pass any assets off to their children and how that causes problems. And It's an exciting thing. Initially, when my dad suggested I should go into brokerage, one of the things he recommended to me is you're going to see the way lots of people do things, and then you're going to decide what works best for you.

And this is great; this part of the advising we do as brokers brings those words to life because you watch how some families deal with assets. And it's just interesting. So we're working on 1 for a family group we've worked with for a long time.

And it's just interesting. Sometimes people want to, but they don't want real estate owned by them or with their partners who are their siblings, and they don't want to be frustrated too; why am I not getting a return? Please pass the potatoes. And it's just, it's tough. It's a challenge.

And so it is challenging to work through that because you have personal relationships that are pretty intense. And on top of that, you're just trying to do what's best for the real estate and what's best for the partners involved. And sometimes, it's also hard to pick out who's in charge.

Chris Powers: What is often the best? Is it to do nothing? Go slowly? Is there one strategy that fits all, or is each situation different? 

Chris Hatch: Any time you're looking at disposing of any portfolio of properties, you're always better to hit the brakes, move slowly, think methodically, and work through those in a timely period.

You often see, and I don't, most of the stuff we're working through has tenants in place. It has, on any family breakups we've ever worked through, they always have tenants in place. Typically it's not vacant buildings. You're selling occupied buildings. So you have something that's got great value, and whether you sell it today at X cap or whether you sell it tomorrow at X plus two or minus two or whatever it might be, it doesn't make a ton of difference in the big picture of things.

If you're looking at the grand scheme, I do think that. Most of my clients that seem like they're a little bit better suited to hand assets off are usually owning single-tenant portfolios at the end of their careers, and they typically have single-tenant portfolios by the number of how many kids they have, for example, with five is planning on handing assets to my kids 5.

Buildings of 10 or 15 buildings make more sense than 12 or 7, or 3. So try to ensure you have an identified plan that everybody understands. What ends up happening, though, almost every single time is the matriarch or patriarch, or both will pass away. And then whatever was stated is just thrown in the garbage can.

And it's start over, and it's any person's guess as to what will happen next. 

Chris Powers: And how can they, because it wasn't legally documented? 

Chris Hatch: Yeah. So you watch it, it's just interesting. You watch these folks build a portfolio of assets, and they do it over decades and spend so many hours.

It's their entire persona; it's who they are for many folks. Imagine who Chris's powers would be without class B and class C shallow Bay industrial, proper? It's challenging, and then they're gone, and their heirs don't seem to care very much about what that was for them or anything else.

And I wonder if it's a care thing so much as other things motivated as well. But one way or another, there needs to be more time spent. Hey, we should keep this sentimental value. So a good example of that is I've been working on this in-and-out deal for this whole calendar year, and hopefully, we can get our city that we're working with to approve our site plan, and we can have a ratified lease by the end of the year.

And I've tweeted about this. I don't; I will never sell that in and out as long as that in and out is owned and operating. It's a trophy tenant to own. It's a trophy for me. I love in and out. I'm like a super fan. And so I don't have any intention of selling it. However, I could see I wouldn't even be cold on the ground, and my kids would sell it in five seconds.

They don't care. It's just money.

Chris Powers: Daddy used to take us. We'd sit in the drive-through and listen to music while they made fresh potato pie or fries. 

Chris Hatch: Yeah. The Arby's that I've tweeted about some times, my grandfather built in 1976 in Salt Lake City, its Corporate Store 174, and it operated from the fall of 77 until December of 2022.

And that is a site where we are in the city right now for a permit for a 237-podium apartment building. My intent here is that I'm locking up that property for another 30 or 40 years. We've chosen a HUD loan process because nobody can dispose of that asset.

It'll just be locked for 30 or 40 more years. And it's the first asset our grandfather built in our family. There's just no reason to exit it. Let's just cash flow, and let's all move on with our lives.

Chris Powers: Did Arby's not want to renew? 

Chris Hatch: Oh, they wanted to renew.

Chris Powers: But you wanted to build.

Chris Hatch: Yeah, they wanted to renew. Chick-fil-A wanted the site. Others wanted the site, but it was time for a new, higher, and better use. We'd looked hard at the fast food deals. It just wasn't; the metrics weren't there. 

Chris Powers: We're eating more fast food, and this is an expanding industry in many worlds.

You hear like the Internet's making other things, everything else shrinks, but the food industry is hotter than ever. Is it just because Americans now eat more fast food, or what is pushing all this? 

Chris Hatch: Yeah, it's easiest to ask the rhetorical question and ask yourself, in the last seven days, have you eaten anything that was prepared by someone else? And then you started thinking about how many times in the last seven days, how many times per day, how many days did you eat something that was prepared by somebody else? And it's surprising to most people because it's higher than they think.

The other exciting part is if you go on any meal delivery services, Grub Hub, Bopper Eats, pick Seamless. You go on there and look at the names of the restaurants that are populated in the list that are recommended for you, and what's interesting is there will be at least five or seven, and you will read the name, and you'll think to yourself.

Wait a minuteI've never seen a physical storefront for that tenant. Who is that? What's interesting is a lot of those times, those are being prepared out of one of these fast food restaurants in the kitchen of the fast food restaurant, or they're being prepared out of some food commissary that's in one of your buildings, or it's just really the food rolls become fascinating over the last few years.

Chris Powers: Yeah, if I'm ordering a Chipotle, I don't care that it came from the Chipotle store. I care that it's a Chipotle when it gets to my doorstep. So that's the rise of clouds, ghost kitchens, and things of that nature. Alright, there was a tweet it said No other broker in history will have added more value to a single tenant pad if this goes through.

And this was talking about a red lobster. That turned into an olive garden. 

Chris Hatch: Yeah. That's a bit of self-promotion. John Andrini sold me the deal. So he was self-promoting his deal as he should. 

Chris Powers: Yeah, that's fine. What's the story there? 

Chris Hatch: Yeah. He sold me a red lobster, and I closed in March 2020.

I want to remember what March 2020 was. I remember. When you buy a national tenant like that, it's not uncommon for the rent check to take one, two, or sometimes three months to get to the right place. They pay you, but it's just a large corporation. It takes a while. You have to verify.

Hey, we own the property. And a lot of the tenants also pay via electronic funds transfer. And so usually, the accounting departments get a little bit particular about having that paperwork in by a specific day, the month before. So it just takes a while, long story short. And so he sells me this red lobster.

I called him on a Saturday morning when he had it listed. He listed it. I got a CREXI listing alert Saturday morning. Call him within 10 minutes. And I said, do not call a single other person back. I promise you I will close this deal. And he said, no problem. He had me under contract by the end of the day Sunday. So he had a lot of buyers on it. 

Chris Powers: And hang on real quick. Why were you so confident that this was the deal you wouldn't let go? 

Chris Hatch: It's an acre and a half out parcel, and red lobster was on a ground lease paying 46 000 a year. I've written a blog on this.

So the exact numbers are in there. They were paying 46 000 years, an acre and a half. I knew the worst-case scenario was they go bankrupt, and I get the pad back, and I can run it for much more money. So I'm hoping that the worst-case scenario happens. So I tell them I'm going to buy it. We also had some 1031 money active during my 45-day identification period.

And it's about the right amount of money to buy this building. So it was timely. Okay. So I get it under contract. We bought it in March of 20. April 20. No rent shows up. We weren't even in the office at the moment. We took about three weeks there when people didn't come to the office, and everybody just returned.

So by May 20, I walked over and asked my property manager. Where is our rent? And I don't know. I am still waiting to hear from him. We've been calling. We can't reach anybody—June of 20 rolls around. No rent. And so it just, it became clear. There was nobody at home at red lobster, which was interesting.

It's imperative to point out that red lobster was never required by either Bannock County city of Pocatello state of Idaho to close ever, and they didn't close. They stayed open. So I'm calling the manager and talking to him, and he's, Oh yeah, I'm going to get a huge bonus this year.

And I'm like, Oh? Why? We were doing two and a half times the sales this year that we were doing last year. And I'm like, lovely, excellent. So meanwhile, my loan payment is going through each month, and I now have to move funds from one account to another to cover loan payments with that partnership.

Fortunately, they had another property, so I didn't have to call capital. But I wasn't expecting Red Lobster not to pay rent. And so we start the eviction. And finally, somebody shows up a human being about six months later, and we're pretty far into the eviction at this point. A human being shows up and says, what are you doing?

And I said I'm evicting you. And the human said, why? And I said because you're not paying rent. And they're like, and it's COVID. And I'm like. Your store is doing two and a half times the volume this year that it did last year. I'm sorry you operate in multiple states. It isn't. I own this location, but only some of your locations.

So I said, look, I would be happy to have a conversation, but I'm annoyed that it's taken this long for you to get on the phone with me. And so we go back and forth and continue the eviction process. And we ended up evicting the tenant. They tried to settle with me on the day of the final hearing.

It took a while to get the hearing scheduled because, with COVID, everything was backlogged, the courts, all of it. They try to settle with me the day of, and I decide, no, let's go to court and see what this Idaho judge says. And it was over in about five and a half minutes, right? It was just boom.

You're paying legal fees. You pay all the rent by you're out of here. And just like that. What was fascinating is I handed it off to my leasing guys, and within 30 days, we had a deal going with all of the gardens, and it's a ground lease. And so it was a fun deal because the garden just opened.

So the city of Pocatello and Chubbuck got an olive garden, which is terrific. And it is lovely. It is great. People love it. In Pocatello and Chubbuck, they're thrilled that they got an olive garden, and I'm thrilled that I could be a part of it. And John was alluding to the fact that he's got some additional activity possibly happening in some periphery properties.

He may be ready to announce, but there are some oversized forthcoming items. 

Chris Powers: And I get, okay. So that happens. And to wrap that story up, they get evicted. You put a signup, and you start getting calls on the property. How did you determine whether there was anybody besides Olive Garden, or they were the first ones that came up?

Like, how did you know it was going to be Olive Garden? 

Chris Hatch: Yeah. Our leasing team knew that we were going through the eviction process. They knew that we were likely to win. So they were already starting to field inquiries on the property, and they had three or four prospects, but Olive Garden was the best credit.

And on that entity with those partners, they wanted credit. Everybody was geared on credit, and we had been through a rocky road, right? I bought the property, and we only collected rent once we won the lawsuit. So we had to fund low-pay loan payments for a couple of years.

It was a while. Wow. So it's tough. So the leasing team wanted a stable tenant. And so we put in Olive Garden we. It was almost two and a half times the rent, which was lovely on a ground lease. We had to put a couple hundred grand into the deal for them. But it was an excellent ground lease for that.

And then we just walked permanent financing on it, pulled a little bit of money out, and bought another piece of land to build something on. 

Chris Powers: That's awesome. I was going to ask you that question when a red lobster is going to an olive garden. Are you all doing all the construction work, or does the whole garden usually do it?

Chris Hatch: Yeah. Again, some of that depends on the timing of the market and what's happening. Right now, many more tenants prefer to ground lease corporate tenants. Part of the reason is they have more cash on their balance sheets. And so there's no reason for me to borrow, especially now when my lending rate is too high.

 So there's no point in me borrowing right now. There is cheaper to use the tenant's money. 

Chris Powers: All right. Let's talk modular for a little bit. When people hear modular, they think, I'm going to. It is way better, and I'm going to save a lot of money, it's built in a factory. You did a modular Starbucks. I've moved to a building that wasn't entirely modular but under the same ethos, which will be great.

What do you think about modular? 

Chris Hatch: We've just completed a second Starbucks, and I've done one Dutch Bros modular. And the modular process is challenging. It's like starting your Development 101 education all over again. Part of that is you're building shells so that whatever's vertical coming out of the ground is all approved typically at the state housing department.

So it's not approved by the city. The state approves it. Usually, the state has a third-party inspector. That's the way it is for Utah. So there's a third-party inspector. And so the modular plans are drawn with your modular group. That's manufacturing your modular unit. And then those plans go to the state. Then you submit the state plans approved with your civil set and your elevations that go to the city or county or whatever municipal authority governs your property.

And what's interesting is you spend at least a month or two just convincing the planner that they don't touch the building. On all three buildings, we had planners, multiple people come back and redline the state-approved drawings, and we had to remind them those are state-approved drawings.

It's not your department, just people who know the process. That's part of the problem. Another part of the problem is that you have an architect in-house with your manufacturer and your architect on site. That's doing all the time and responsible for all that work.

Contractor-wise, your contractor, whomever you hire, has to prepare a site, and once your building gets there, they have to tie the site in. And so that means their contract is less than if they just built the building. So they're, no matter what happens, they're frustrated because they're earning less money.

They charge up for that. And so you get a lot of that: they charge more for their services than they otherwise would, especially in a hot construction market we've been in for the last few years. And then, the building will show up on-site, and some random thing will be wrong with the building.

Right? We're just finishing another couple of touch-up items on the Starbucks drive-through, only that I just finished it opened on Tuesday. There are a couple of touch-up items that we need to have done. They're within the scope of the manufacturer. The manufacturer doesn't live in Utah.

Their headquarters are somewhere other than Utah. Their tradespeople are outside of Utah. So who fixes those things? They were all things that should have been done on the building, but who's responsible? And it's just a cluster. So on all three of ours, we didn't save time or money, and they were harder to do.

So we have retired from the modular business. 

Chris Powers: Yeah, you answered the question. You're saving money for all this. 

Chris Hatch: No. And it's interesting. If you had a consistent, exact, precise footprint, you were knocked out; you could save a little time in the long run. 

However, in each state, you go to, you have to get up to speed with that new department of housing, which takes time. So I know, for example, there was a considerable backlog when Dutch was trying to enter Texas with modules, and it took months and months to get through the system.

Chris Powers: All right, this one's for me. We're going to bring it home on this one. You have five children. You took a 30-day vacation with your family for the last two years. And when I was texting you, I was like, how do you even plan one of these? One, let's start. Why do you do 30-day vacations with a family of five?

It's very cool that you do this. 

Chris Hatch: A couple of years ago, my wife was getting panicked because our oldest child was 12, and she started doing the math, and it was like we have six years left, and our daughter has left the house forever. She's going to hate us. She's going to move on. She's going to have her own life.

And I'm like, okay, let's take a break. Yeah, let's cool it on that. And my wife said we need to do something and bring these kids together. It is all during that period when covert is hit. And so the entire way we reviewed travel, summers, and time with our children changed during that period, as it did for many people.

So we just said, look at the end of the day, aren't we better off to spend a big chunk of time with the kids? And so we decided let's go back East. And initially, we started with, let's do a back East tour. So Eastern United States, North-eastern United States. And what we ended up doing is we did a week in.

That morphed, and then we actually did one week in Washington, D. C. and then rented an Airbnb in Brooklyn for 30 days. So we were gone for 37 days. And it was a wild experience to be gone for that long. We did a couple of weekend trips, one to the Hamptons and another to Philadelphia.

And it was so much fun to show our kids all these beautiful sites and the Liberty Bell. And we watched, started, and did the July 4th fireworks on the lawn at the mall in DC, which was terrific. And there, kids could walk through so many of those critical structures that are important to America.

And then we lived in New York, an entirely different environment from Salt Lake City, my goodness, it is just as different as you could ever have, which is excellent. 

Chris Powers: And what's the range of ages again? 

Chris Hatch: So, currently, we're 14 to 5. 

Chris Powers: Okay, When you're taking that age range, how do you break up your days?

Does everybody go to everything?

Chris Hatch: That's a good question. It was complete contact. So we were in a brownstone in Brooklyn and like a house. So we had a townhome. And I would take my oldest on an early morning train and drop her off at the dance. So we enrolled her in dance classes for most of the time.

We're there. So my daughter spent much of her time dancing in Various dance studios around the theatre district and just hanging out and learning from some of the best dance instructors. She's ever had in her life. For my son, we found a college soccer player who did soccer training for him 3 or 4 days a week at Brooklyn Bridge Park on the pier. 

So we were literally out on the pier. The backdrop is downtown Manhattan. And I'm looking at the time at my 11-year-old, 12-year-old. And I'm like, I hope you can appreciate this because this is the most epic thing.

Yeah. And then, our little girls, we enrolled in a gymnastics class. And so three days a week, they're over at gymnastics. And as usual, our little guy was just carded all around everywhere.

 Chris Powers: Dude, that's awesome. So you said it's a vacation, but we're also going to live there and do things that people would do if they lived there.

Chris Hatch: That's right. In New York, we said. Let's live there. Let's act like we live here full-time and see what it's like.

Chris Powers: What would if I was if your kids were sitting in here right now? What would they say? The experience is like living in Brooklyn. 

Chris Hatch: Each one of them would tell you probably first.

Here's the best food we had. My children all love food. So they would tell you that they'd all tell you about their different experience and what it meant to them. And it was so much fun. And what was also a real benefit of having a daughter 1st, and a very responsible daughter at that, is that she is fantastic.

She would watch the kids. A couple every couple of nights, my wife and I would leave, and we'd go into the city and have dinner at some amazing place and have a nice date night. 

Chris Powers: So awesome. Okay. Then I have to ask about Europe. Did you, because in Europe you only stayed in one place for 37 days?

Yeah. And I have so much respect. Anybody listening to this, it's a parent of lots of kids going for 30 days with an age range like that. Okay. How did you break up that trip? 

Chris Hatch: Yeah. We did a week in England. We did a week and a half in Italy, and then we did two weeks in France. And we traveled there because we decided we couldn't stay put the whole time.

Yeah, the same thing. It also morphed. We were searching for an Airbnb to live in Amsterdam for 30 days when we started. And then we figured we would do weekend trips, and it morphed from there, and it morphed to us moving around, which was a little different. But you have to stay flexible, which is the biggest thing.

Whatever version of constant in your life does not remain constant when you move around. And then, if you move around with that many people, it most definitely does not stay the same. 

Chris Powers: Do you have a travel agent, or are you all just doing this? 

Chris Hatch: No, just us. A highlight of that is we were driving to Cinque Terre to hike there on the western side of Italy. We were leaving Venice, so we were in a rental van that I was driving down the road, and as I was driving down the road, I got an Airbnb cancellation for the Airbnb we were supposed to stay in that night. It was fascinating; it's just Full triage mode like we're trying to figure out where we will sleep.

What are we going to do? Where are we driving to? We don't have any idea. And you can't panic in those moments, you just got to stay calm and collect it and try to come up with the best solution you can come up with. And it can sometimes be better. And sometimes it's more entertaining. 

Chris Powers: So what'd you do?

Chris Hatch: We ended up at the second town. On the North from the North, I am trying to remember the town's name offhand, but we're in the second town. And it was so funny. We were sitting there eating dinner. Right underneath this Airbnb that we had just rented right day off, we're sitting there eating dinner, and towards the end of dinner, a DJ is setting up and a little square there, and we're right down by the water.

So there's a square there, the water and a little harbor, and this guy setting up, and I'm like it's like a lot of equipment he's got over there. He's got some serious speakers. And so by the end of dinner, he has a yeah. Full techno, and it's so loud you can't hear each other talk across the dinner table.

You have to be almost screaming to hear each other talk. And then I looked up and realized our Airbnb was right. There above our restaurant. And so we go in, so we finished dinner, and we, walk around the square for a minute, and it's wild, people are dancing and being crazy, and we go into the Airbnb, and it's so loud in the Airbnb, you still can't hear each other talk.

So anyways, that was entertaining. When did the DJ quit at 1, 2, or 3 AM? 

Chris Powers: Y'all don't have fast anything. Chris, this was a great conversation. 

Chris Hatch: I appreciate it.

Chris Powers: Thank you very much.