Commercial Real Estate Broker on Why the Pandemic Could Make Midwest Cities Winners

Dan Dokovic [00:00:00] You know, we're, we're, we're gonna talk a lot more in the future about healthy buildings, right? People are gonna want, they're gonna want windows. People are gonna want lights. People are going, want healthy working conditions. They're gonna want a lot more fresh air going into the building, as the crow flies on the Vance Crowe podcast.

Vance Crowe [00:00:20] Dan Dokovic, welcome to the podcast.

Dan Dokovic [00:00:23] Thank you. Nice to be here.

Vance Crowe [00:00:26] So, you are in commercial real estate, and this is the topic going on right now, not just in the United States, but all over the world, because everyone is wondering when the quarantines are lifted, will people return to the office space? Will the offices be filled again, as a commercial real estate broker, what do you think?

Dan Dokovic [00:00:47] So the, the offices are definitely gonna be filled. Again, I think there's a lot of chatter out there that office space is gonna die. But I, I think you can already start seeing it. You know, I am, I'm in my office today, and I pulled into the garage and, and the garage is already starting to get filled up. And this is, again, this is the first week after we lifted the quarantine. So I think there's two trains of thoughts. There's certain things that can be done really well from home, you know, head down work. If you don't have kids like me, you know, some, some of the more concentrated work can be done really well from home. But when you're talking about what's gonna be happening in the offices, it's the same thing that that's been happening in the offices for a long time. It's the, the creativity, it's the connection, it's the teamwork. So, you know, if, if you look at, well, who are the companies who are gonna be bringing back people into the office? It's the companies that are creating stuff. It's the companies that are building teams. It's the companies that are, that are trying to, you know, advance whatever they're trying to do, their creativity or whatever. So I, I think, I think you've seen a lot of tech companies saying, well, you know, our, our tech people can work from home. That, that is correct. But again, if you look at it from the perspective of are those teams gonna be as successful and productive as before, I would say probably not.

Dan Dokovic [00:02:20] Because we have tried this over and over and over again, and it did not work. Yahoo tried it in two thousands. IBM tried it, best buy, tried it, and everybody keeps coming back to, you need that, you need that personal close connection. So,

Vance Crowe [00:02:39] Yeah, I mean, and the tech workers are something altogether different because when you're working on tech and you're working on code, there really is just you and the music that you're playing into the computer. So I have several friends that they have either spent a lot of money or they have built their own white noise machines. They go into the office, and the act of being around other people is actually a sacrifice for them. So for many coders, you know, the idea of working from home means I can go into my dark basement, I can type on this computer, and when I need to share code or I need to communicate, I can do it in a channel where my skills are best used in a written format. Whereas when you're talking about like creatives work, the, you, it'd be really difficult to design a movie this way, because like Pixar, when Steve Jobs did that, he intentionally placed the bathrooms in a place where people would have to walk from the entire length of the building in order to come to the same bathroom. But it created those serendipitous collisions where you have a conversation and it, and it jars some new idea. And any of the work that required that, that kind of serendipitous collisions, that's gonna have to be back in an office in some way.

Dan Dokovic [00:03:48] It it is, it is. And I think people are yearning to be back in the office too. You, you know, I don't know about a lot of, a lot of your listeners, but I think what's happening is I think, well, first of all, people as people are social human beings, you know, let's, let's put a couple introverts out there, you know, that, that, you know, to decide. But again, people in general like to be around people and feed off other people's energy. And I think that's, and and I've been a bit on my soapbox because of this. I think what, what's going on is there's gonna be a huge problem with mental health because of this quarantine. People have been stuck at home. They haven't been able to see their friends, they haven't been able to see their coworkers, they haven't been able to have meaningful conversations other than through Zoom, which I think is fine. But again, when you're there in flesh in front of somebody, it's a different conversation than it is when you're over a zoom or over a camera or over chat, chat or email or whatever. So I was just reading yesterday, you know, the prescriptions for antidepressant drugs went up 34% in the last, the last two months. Yeah.

Dan Dokovic [00:05:06] So again, I'm not blaming it all on not being in the office, but I am blaming it on being cooped up inside of the home. And, you know, most of us spend a lot of time in the office, and most of us have, you know, almost office families, right? You, you have your, your off, you have your office coworker families that, that you almost need as much as you need your, your day-to-day family, you know? So I think that's, that's a big importance of what office brings to well, the

Vance Crowe [00:05:38] Antidepressants thing. Like, I, I, I didn't know that, but it makes a ton of sense to me. When, when the lockdowns first happened in St. Louis, all of a sudden you saw an explosion of people walking and biking and taking their kids out. And, and you saw this almost like a resurgence where you, you looked around and it felt refreshing and good because the community was coming together. But two months in, I now can go for a jog at 6:00 AM or 7:00 AM at a, a reasonably late time for me and see almost no runners. And in the evening I see almost no walkers. So it's like we went back to the pre coronavirus engagement outside, and then you also don't have the going outside to get in your car and then drive to the office. I would imagine that this is a compounding problem that if people aren't, if they aren't solving it with exercise, they are gonna go on medication.

Dan Dokovic [00:06:31] Well, you know, and, and you, you brought up a great point there. When you work in an office space and you are going from an office home, most of us have at least a fif 10, 15 minute drive home. Most of us take that time to decompress. You know, a lot of people put on music, some people listen to podcasts, but it is time that you take to decompress and kind of, you know, bundle up your workday, throw it away, and then you get home and you see a family. But again, you know, these last couple of months, you know, for me, I would go down to the basement. Next thing you know is the, the day's done, I will come back up. And it will be an automatic shock to your system because it's, it's not easy to switch from business stance to, to being a family man right away. Because, I mean, it's, it's, it's two different worlds. I had a, I had a funny conversation with, with people that, that, that cuss a lot, you know, you know, and they, when they're home, they don't cuss when they're at work, you know, they, they, they throw in a couple of cuss words, right? So then you have that family connection and that work connection combining when they're home working, you know, the kids are like, dad or mom, what, what, you know, what is that? You know? And, and people tell me, well, I, you know, they will typically not see this from me, but because I'm at home now, this stuff is coming up.

Dan Dokovic [00:08:05] So it, it's, it's, it's interesting how you, how you can pick up on certain things because you were working at home, right? You know? Yeah.

Vance Crowe [00:08:13] I mean, like the, all the world is a stage and, and work, the work stage that we go to, that we put on our costume, and we go and we play a role that it's expected and we know what's going on. We know that if we're making forward progress, like we took the, the play that is everyone's lives, and we said like, Nope, though it's no longer needed. Now you're only acting through this TV screen. So some people weren't putting on pants. Like, I don't know if you heard that funny statistic where they were saying shirts are going through the roof at Target and Walmart and these places, but pants are, you know, not, not all that important. I think that this is, I for one, tried to keep my schedule like laid down in stone, because if I were to get into the vortex of I'm not a part of this routine, I, I, that would've led inevitably to depression for me bad places. Yeah,

Dan Dokovic [00:09:07] Yeah. You know, I think, I think a lot of people have been trying to, some people have been trying to incorporate putting certain things of normality back into their life. So putting on a nice shirt and pants and going and sitting down and working, you know, I've, I've seen a couple of people do that just because mentally they feel much better about it. You know, they don't feel like they woke up put on their sweatpants, and next thing you know, they're, they're, you know, working. And again, if you look at it, when does working from home work, and, and this is, this is a study that has been done. The working from her home works for achievers, right? So if you look at it, okay, so if you have an achiever, they're really good at working from home, but they're also really good working from work, right? I mean, that, that's, that's the big difference. If you have an underachiever, well, they're now good working from work or from home, and then you're really in a, you know, in a, in a dizzy. So, like I said, some of these people, and like you were saying, you know, in the morning they wake up on time, they go work out, do whatever, put on their clothes, they shut themselves down, and then they're working, right? They get their mind right to work. But again, you can't, you can't expect that from everybody, you know? And then, you know, a lot of people, you know, I know, I know there's a lot of young families that have young kids, you know, they're, they're not not in school. They're running around around home.

Dan Dokovic [00:10:41] You know, you have, we have families where there's, you know, two working parents and kids at home. It, it would be almost a crime to say, well, you should have the same productivity as you were before, because it's not possible. I mean, everybody knows that, you know, everybody knows if you have a small, small child, you know, toddler, 3, 4, 5, 6, 7 years old at home, they're gonna want your attention all the time. And, you know, you're gonna have to manage work. Secondly, right? It's not gonna be your number one priority because you wanna make sure that your kids stay safe. You know, they don't walk out in the street who knows what. Right? So, so I believe that, you know, I've saw some statistics that a productivity went down about 8% in United States, 9% in Europe. But I, I, I also have a feeling that that's a, that's a kind of a, you know, cop out number. I think the productivity probably has gone down a lot more than that. It's just that we don't know it. Right.

Vance Crowe [00:11:49] So you're in commercial real estate. What is the state of real estate right now? Are people buying and selling? Are they holding what's going on?

Dan Dokovic [00:11:57] Well, so it's, it's kind of an interesting, interesting time, right? You, you look at, you look at different classes of real estate, right? You look at retail, you look at office, and you look at industrial, and you also look at hospitality and multifamily. All of those assets have their own quirks that come with this. And, and a lot of people, if, if you look at it, a lot of people are not, were not, nobody was ready for this. Even if you were in a previous recession, you would, you would, you know, you would know what to do. But this recession is not the same as the previous one, right? This one came in so hot and, and really took us all by surprise. So if you look at it, you know, obviously the, the, the hospitality people have been hurt the most. And you can, you know, I just read an article, St. Louis Business Journal, you know, some, some are arguing that it's gonna take until 2024 to get the hospitality back to the same place where it was in, you know, in 2019. So, you know, you're gonna see huge vacancies in hotels. They're gonna be struggling for a long time. So that's, that's kind of on the hospitality side, retail side. Same way, it, this has been so, so hard for the retail side because nobody was going anywhere, and the restaurants had to shut down, right? So you can already see right now, a ton of restaurants are already saying, well, you know what, we're just not gonna open our doors anymore.

Dan Dokovic [00:13:35] And that's, I think that's gonna be huge impact on retail real estate,

Vance Crowe [00:13:40] Because again, yeah, and for restaurants, it's like, it's a really difficult investment because you can't just be like, well, let's open it up and see if 50% capacity does it for us. You've gotta buy milk and eggs and cheese and bread and all these things, and if you don't sell it, then you now have taken on all that liability. And if somebody comes to your restaurant and you don't have the things that made it the reason that they came, maybe they'll be forgiving and maybe they won't. But you can imagine that this is going to really wipe out a lot of people, and they're probably sitting there wondering, should I throw the dice this week? What happens if we, you know, pull back? Maybe I should throw 'em next week. And it makes it hard to know how to navigate.

Dan Dokovic [00:14:18] Well, restaurant, I mean, and you know, this is anybody else there, restaurants are such a tough business to begin with. In, in good times, they're a very tough business. And so in bad times, you know, it's, it's horrible. So you look at, you look at a restaurant, and they're, they're doing, you know, well, in a good time, and they're doing well when you have a hundred percent of the tables working, right? But now imagine taking 50, 75% of those tables and, and putting, I saw somewhere they, they showed me that they were showing a picture. There were mannequins in the tables that were now being used. So it looks like there's people, you know, but the, you know, they, they were getting a little, a little creative, but imagine, you know, so now, now you're down 50, 75%. It is very hard to, to make it work. Now, some of the people have adapted to that, and, and they're doing all, you know, the curbside and they're doing selling groceries. And, you know, I, I've personally, I've enjoyed some of those restaurants that have done that. You know, I, I'm, I'm a big proponent of St. Louis restaurants, so I was up, out and about all the time, you know, trying to figure out how to, how to order from restaurants and what to do to try to support 'em. And in the meantime, you know, I was, I was eating better myself than I was before quarantine. It's, it's almost become kind of a like, and, and I, I, I, I'm a proponent of this, you know, you create this local economy where, you know, you can, you can collaborate and you can work with the restaurants.

Dan Dokovic [00:15:59] They can provide you some of this local produce, and they can provide you some of this local, much, much better quality food at a fraction of the price, because they don't have to, you know, involve a server. They don't have to involve a, you know, and it's gonna be, it's gonna be to see what's gonna happen with the rents. We can pick that up soon too. But again, you can create a almost kind of a small local economy, you know, where you're not so reliant on meat coming in from, you know, New York or Wisconsin on, on eggs, coming in from who knows where, you know, and you can, and you can keep the local economy going by doing so, so,

Vance Crowe [00:16:47] Yeah, the local economy, I heard a guy the other day was the former president of Coinbase, the, the cryptocurrency trading site, and then also a guy named Eric Weinstein. And they were talking about red and green zones, and about how different communities were gonna be rated based on how likely are you to be infected there. And when they were first talking about it, I was doing some outside work, and I was like, this is a joke. These guys are just being fear mongers. And then the, the, they said something that really caught my attention. They said, look, you know, the mortality rates, it's not getting 20 year olds and 30 year olds. This is not the problem. The problem is you're gonna eventually hit a point where hugging a stranger or shaking hands could be a $10,000 decision that you're making, because you, yourself will not be able to work. So if you've relocated your staff, because California has all kinds of problems, or New York, those people are gonna choose a place where the odds that they're gonna have a $10,000 bad handshake are down as low as possible. And that really made me be like, all right, what are the measures that a city could do? Not if they were trying to do security theater,

Dan Dokovic [00:17:59] But what

Vance Crowe [00:18:00] Actually would bring down your number or make it so you got characterized in that green zone? Do you have any thoughts on that?

Dan Dokovic [00:18:07] Well, you know, if, if you, if you look at it strategically, right? And, and if you look at it where we had the most problem with coronavirus, right? You're looking at very dense urban settings, right? So from, from commercial real estate perspective, even in New York, you saw that flight, right? As soon as Corona came, people were throwing money to try to go to the suburbs, or, you know, it was famously that the people were overbidding by 3, 4, 5, 6, 7 times in Hamptons to be able to rent a house, just not to be on top of each other, right? So from, from that perspective, I think what we are gonna see is we're gonna see a resurgence of the suburbs, right? Up until this point, people were moving into the cities and they were stacking right on top of each other. You know, e everybody was talking about millennials and how millennials are city dwellers and whatever. Well, yes, but let, let's think about it. If you can get everything that you get in a city, in a suburb, right? And you can have a better quality of life, a house, a yard, you don't have to be on top of your neighbor, especially if, if this virus thing continues to repeat, you know, maybe it's not Corona, but maybe it's something else. You know, you, you, you gotta think about it, you know, I think a, people are gonna be a lot more sensitive about it in the future because they went through this right Now, they're gonna be a lot more sensitive, like you said, who they hug, who are they affiliated with?

Dan Dokovic [00:19:44] Where do they all live? Because imagine, you know, all of us here in St. Louis are pretty damn lucky right now, actually. Right? I mean, we've had the luxury of living in a larger house, right? We had the luxury of having the outside, you know, my kids have been playing in the backyard for a long, long time, you know, but imagine turning that back around, and you were living in Manhattan in a 450 square foot place. I I, I think the, the, the, you know, we were talking about mental impact of it. I, I couldn't even imagine spending three months, no doubt, four 50 square feet.

Vance Crowe [00:20:26] Well, I, I lived in an apartment in DC 480 square feet, and it looked out on a brown brick wall. Yeah. And if I was in that situation, it would be nothing but hell. I remember a couple of weeks ago, I went on Twitter and was like, Hey, I think that this is going to be a real chance for people that have always viewed the middle as flyover country as like, all of a sudden the luxury of living in New York, or having the prestige of living in San Francisco now comes at the very high price. That if the, if we decide as a society that we're gonna quarantine in our houses, now you get to be all alone in your little box. Whereas there is so much space in a place like St. Louis, where, you know, it almost seems like there's no end to the amount of

Dan Dokovic [00:21:09] Space. Right? Right, right. You know, and, and, and you, it used to be a thing when you said, well, you know what? I wanna go to New York or Chicago because, you know, there's great restaurants, you know, there's great nightlife, there's, there's, you know, there's, there's, there's art, right? But, but you look at it now, and you look at St. Louis, and you can say the same thing. I mean, we have some of the best restaurants in the country, you know, every time James Beard comes around, St. Louis places on there, right? And, and you can probably get into that spa, into that place faster than you can get it into New York, right? You know, our, our culture over here is, is amazing. We have great artists here, you know, and then on top of that, you have this, you have this sprawling, you know, acres and acres of land that you can, that you can live without having to be on top of each other. And the quality of life is just great. So I think, I think people are gonna start realizing that, that, and you are gonna see people, we were talking about back at, about the office space. If, if you look at it in California, the, the rents are four or five times higher than they're here in St. Louis. And then on top of that, you're paying, you know, you're paying ab absolutely absurd amount of money to live in a, a small, tiny apartment. Well, you know, people are gonna start realizing that's not what this is all about, right?

Dan Dokovic [00:22:46] Yes, you have beautiful, you know, coastline, but there, there's a lot of beautiful places here in Missouri that you can be, you know, and, and, and a lot of different things that you can do to be active outside, et cetera, et cetera. The thing

Vance Crowe [00:23:00] That, that I really had no concept of until, so I moved away to the coast. I wanted to live in California and New York, DC and I did, I lived in all these places. I did not realize until I moved to St. Louis, when my commute, you know, across 15 miles or whatever it was, 15 minutes.

Vance Crowe [00:23:18] And you, you go back and you visit Washington, DC and you realize, like every single day you are in a dance with millions of other people who all have their own intentions, who all have their own desires, and that has nothing to do with you. Yeah. And so you don't have a community feature. You are just an anonymous like thing getting in other people's way, and they're getting in your way. And you, all of this time that you have to give over just for things like commutes it, once you get out of it, none of it makes any sense why you would be in it in the first place. Like, right.

Vance Crowe [00:23:54] How much money are you willing to, to make in order to have a drive where you sit for two hours?

Dan Dokovic [00:24:00] Well, on top of that, imagine the stress of it too. It's not, it's not that easy driving in some of those big cities, you know, I, I know, you know, you wouldn't come catch me dead driving in New York, you know, I would much rather sit in somebody else's car, right? It, it would just be horrible, right? And so over here, you know, you take it for granted. You get into your car, you turn on your music, and next thing you know, you're cruising down the, you know, there is some, there is some, you know, places where, where we have some jams, but nothing,

Vance Crowe [00:24:32] Nothing like, so Dan, if you're, you got, you got people that are coming to you. I mean, the thing that's interesting about you in particular, real estate agents in general, is that a lot of people that are risk takers come to you, particularly in a moment like this. There's a whole bunch of people sheltering in their houses. You got some high risk takers. What is the risk of, say, buying an apartment complex right now, and they, the, the government says you don't have to pay your rent anymore. Is that a real risk right now?

Dan Dokovic [00:25:01] So, and I'm gonna, I'm gonna speak from my own experience because we, we are, we are owners of real estate also. We have currently, we own about 1.6 million square feet here in St. Louis. And so, you know, from, from my perspective, we're buyers in this market, right? Even though you have that risk of not receiving the rent, we believe, or I believe that that will come back, right? People are gonna start paying rent April and May on our portfolio and loan, we've connect collected about 92%, and that's office and industrial. If you look at across the country, all the REITs are trending about the same on an office side, industrial side, the collection is about 92, 90 3% on a multifamily is about 90% on retail. Like I said, that's, that's really where people got hit. It's right around forties on collection. So wait,

Vance Crowe [00:26:07] Wait, wait, wait. So the other ones are trending 90, and then you go down to 40, and the real estate

Dan Dokovic [00:26:13] You's

Vance Crowe [00:26:13] A bad

Dan Dokovic [00:26:14] To about 40% on retail side, you know?

Vance Crowe [00:26:17] Wow.

Dan Dokovic [00:26:18] That, that is a, that is a, like I said, you know, you, you have restaurants, you have mom and pop retail shops, you know, you have boutiques. None of those people were able to afford paying rent. And I think, I think that's where the change comes along, is how are we gonna shop in a future, what the retail is gonna look like, and the, you know, and then how we're gonna work in the future, and then how we're gonna receive goods in the future, right? I think that's, that's a big, big shift. So going back to it, would I buy, yes, we're buyers in this market, even though we don't, you know, even though there's certain rent collection issues right now, because yes, people are gonna pay in the future, but what are they gonna pay for, right? So you look at it, are people gonna pay for, let's look at the office space. Are people gonna pay for a white stark box that I can put 400 cubicles in, and that's it, right? No, right. Office space is gonna become more, you know, about experience, right? If you're gonna have people in the office, you're gonna want those people to have experiences like you were talking about jobs.

Vance Crowe [00:27:42] Wow.

Dan Dokovic [00:27:42] They're gonna have to, they're gonna have to hit each other. They're gonna have to have collaboration. You know, we're, we're, we're gonna talk a lot more in the future about healthy buildings, right? People are gonna want, they're gonna want windows. People are gonna want lights. People are gonna want healthy working condition. They're gonna want a lot more fresh air going into the building.

Vance Crowe [00:28:04] Yeah, I was just thinking about that. When you, when you think about lights, right? Like commercial real estate, you know, there are very, very few windows you can ever open up because it's too big of a liability, right? But now all of a sudden, if you have a building with windows in it that you can open the value of that just went way up.

Dan Dokovic [00:28:22] Well, and, and, and your, and your mechanical systems, if you can pump in more fresh air through your mechanical systems, it, so the biggest thing that's proved about, about this coronavirus is that fresh air is, it's really an enemy, right? So what the, what the doctors say, go out, get some fresh air, right? If you're in a building, pump as much fresh air into the building as you can. So in, in some of our buildings that we own and manage, we've started pumping in a lot more air, you know, replace the filters. We're using different type of filters that we replace that catch, you know, a lot more bacteria than just a typical filter that you would use in your house or whatever. So certain things like that, you know, is really where you, you know, looking at a future of real estate, it's gonna have to be healthy real estate, right? Because people are gonna request that, and they're gonna value that. If you just have a box where you're trying to put people in, it's not gonna work as well, right? There's not gonna be just that, you know, you, you look at it back in a, back in the day and you look at what was the relationship between a landlord and a tenant? So a landlord says, tenant, pay me my rent and I'll give you the space. And tenant said, here's my rent, leave me alone. Right? Future's not gonna be like that, right? Future's gonna be a lot more collaborative between landlord and a tenant. They're gonna touch points on a lot more avenues than just, here's your space.

Dan Dokovic [00:29:58] You know, it's gonna start looking a lot, a lot more like a hotel where you go to work, then it is gonna look like a, a just a box with cubicles and, and computers, right? So do

Vance Crowe [00:30:08] You perceive it'll be a lot more like Uber style offices where you can just kind of rent or come in and out? Or will people want their own secure place where, where they can keep their own stuff and know how it's being treated?

Dan Dokovic [00:30:21] Well, so that's, that's a, that's a, that's a good question there because we were trending back to, you know, you think about WeWork, right? We were trending to a place where you can, you know, have a bench somewhere and you can, you know, register that bench to you, you know, three days a week or something like that, right? And, and you're gonna see a lot more going back to the private offices than you did before. You are gonna see a lot more going to your private stuff than you did before. Because imagine I'm using the same desk as you using as 15 other people are using. Well, I'm not using it or you're not using it. I mean, imagine the, the, the, the germs, the, you know, and people are not gonna take that lightly anymore, right? You're gonna either have to have somebody every time somebody leaves this affect that space very, very thoroughly, or you're gonna, you know, just decide to have a space for dedicated space for somebody, right? So really what, going back to the whole whole thing about the office space, if you look at it, I think people are focusing on the wrong thing. There was, there was a Jones Lang LaSalle did this, and, and you can do it in any different shape or form in St. Louis here, I would say you can do it at a lesser scale. So 2 20, 200, right?

Dan Dokovic [00:31:57] Two is utilities that you pay $2 that you're paying in a square foot per utilities, 20 is $20 a square foot that you're paying for your office space, right? And 200 is what you're paying for people. Why are people worried about two and 20 when really the cost of the biggest cost of their business is the 200. And really what you should be spending the most money on is that 200. You wanna make sure that that 200 is productive. You wanna make sure that that 200 is healthy. You wanna make sure that that 200 is knowledgeable. Don't, don't think about the office space. Really think about how do you make that 200 productive, because that's where you make money, you

Vance Crowe [00:32:42] Know? Well, and that goes straight to your point on the art of how you put together people in a room is what matters there, because then you're adding to the 200 and not just the cost of the, of the office space. That's

Dan Dokovic [00:32:55] It. That's it. You know, if, if you look at it, the office space and utilities here in Midwest are cheap, right. Focus on people, right. That's, that's a big thing. I mean, I think, I think companies are starting to figure that out, and I think it's gonna be more so even in the future. So when you're talking, what does St. Louis do? I think St. Louis needs to continue to stay on a track of attracting these companies, you know, that, that, that want to invest into that 200 that want to invest into their employees, because this is a perfect place to do that, right? You have cheap real estate and you can invest more into the people. So

Vance Crowe [00:33:35] Yeah, I mean, I would make the, the case of, hey, you know, like, just like we did before, St. Louis is a great place to be, blah, blah, blah, blah, blah. For all of our reasons, I love the art museum. I think it's a national treasure that people don't, people should travel from all over the world to come to this museum. But if you were trying, if you were in the role of government, or you were advising the St. Louis, either city or county government, what are rule changes that they could make? Or what are situations that they could create that would make it much easier for these businesses that are gonna reshore manufacturing from other places, or people wanna get outta their dense cities? How do you make this the place that people wanna come to as they're moving

Dan Dokovic [00:34:16] Business friendly? That's number one. You look at the, you look at the places that they have blown up over the last decade, right? You look at Nashville, you look at Austin, what do those people have, or what do those cities have that we don't have? Is, is that climate of being business friendly? I love St. Louis, but again, as, as somebody who deals with real estate and somebody who has to bring people in, we have to deal with all kinds of municipalities here, right? Then we have to deal with the counties, then we have to deal with all kinds of regulations. So think about it, if you are going to Nashville, you know, you only have to deal with one, right? You don't have to deal with, I I, I can't even keep track. I maybe, you know, how many municipalities here? We have lot.

Vance Crowe [00:35:06] Yeah.

Dan Dokovic [00:35:07] You know, but again, you don't want to have to have a huge red tape to be able to establish business here in St. Louis, open up an office and go hire a bunch of people, right? So I think that's, that's number one thing. I think we were on a, on a right, on a right trajectory with, you know, trying to combine the St. Louis City and the county. I know that's a huge, huge task. And, and I know it's, it's, it's highly political and that's why some people don't even want to touch it. But again, in order to see better, stronger St. Louis, I think you're gonna have to do something like that.

Vance Crowe [00:35:50] Yeah. If I were a politician right now, I, I would be doing everything I could to say we are going to make it. So if people are gonna change their lives, they've made a giant decision that we want it to be easy to buy houses here. We want it to be easy to transfer commercial property. We want getting a business license. You know, I heard the other day from a guy in Illinois who said, right now, if you wanted to start an LLC in the state of Illinois, there's no one taking those applications and saying, yes, we approve. Right? This is no good. Like, during the crisis, what you want is people to be able to make businesses. And, you know, if you're not gonna give them the right to do it legally, they'll just do it illegally, right?

Dan Dokovic [00:36:30] Yeah. You, you just have to, I mean, people are, if, if you think about people, they're so resilient, right? You know, you think about even these hard times, people are starting businesses. I, I I would say personally, these hard times are the best time to start businesses. And if you look at it through the history, the hard times is when the innovation is as the highest. The hard, hard times is when some of the best companies are formed and started. So if you take that away, like you were saying, if you can't even incorporate, I mean, what what's the point, right? So yeah, I mean, make it, you know, you look at it from your personal life too. Why do you do certain things that you do? Because it's easy. You know, why do order an Uber? Because it's easy. You know, you don't have to take a phone call somebody that somebody puts you on a phone call on a, on a hold. They have to find where the Netta cab is. Then they have to say, well, where are you going? How are you gonna pay? The reason why Uber is Uber is because it's so easy to order an Uber and get it to your wherever you need to go. Right? Same thing with business. If you can streamline how businesses come to your community and what they do in your community, it came over, right? So,

Vance Crowe [00:37:50] Yeah, I mean, like, if you can make it so people don't, I mean, I would move if, if, if it meant that you could go to a place and they made business doing so much easier, why wouldn't you move? Like why wouldn't you go to the place where the government takes the least amount from you? It's the easiest to work with. Like, they're basically there to facilitate a transaction. You know, what little they need to be a part of it. I, I wonder, are there cities right now? Do you know anybody gearing up to make big changes during this virus?

Dan Dokovic [00:38:20] You know, there, there's, there's a lot of progressive cities out there.

Vance Crowe [00:38:24] And,

Dan Dokovic [00:38:25] You know, going back to the one thing that, that, that people don't think about. And, and for some reason governments don't think about, just like people don't about it. You know, in St. Louis, for example, we have this, this tax 1% head tax, right? And the other day I was watching on TV and, you know, they were arguing, well, if you are not able to work in the city of St. Louis, are you still, you know, are you still having to pay that?

Vance Crowe [00:38:55] Yeah.

Dan Dokovic [00:38:55] Are you still having to pay that tax? Right. You know, and they were going back and forward and there's gonna be lawsuits. Right? Now, to me, that's, that's, that's counterproductive a hundred percent, right? Think about it, just like any business, if you can scale your business, you can make more money. If you can scale your cities or your counties, you can make more money. But you're gonna have to cut somewhere in order to do that. You can't say, I'm gonna scale it, but I'm gonna charge all kinds of taxes on everything. Right? That doesn't work. Right? Because you can't scale it that way. So I think the cities that are gonna do it, the the best is they're gonna figure out that just like a business that does it the best, you know, Amazon, for example, their perfect reason, you know, perfect case study for even for governments to look at how do you scale a business? I mean, they were making tiny little profit margins on sell, selling you and shipping you, you know, needles for free, right? So you, you, you sit down at home and you say, okay, I'm gonna buy a needle. And Amazon sends you a needle through Prime, and you don't pay for shipping. Well, you know, they make a tiny little profit. But again, you multiply that, you multiply that, and, and the same thing that you have to look at on a government perspective. They need to act more like business. How do we attract more and more businesses to St. Louis in order to scale our government, our county, our everything? So,

Vance Crowe [00:40:24] Yeah. And it seems like now, right now is the time because, you know, a month into Coronavirus, you had the problem that people still didn't know what was gonna happen. And we still don't know what's gonna happen, but we have a lot better signal that we're going to come out of it. We're going to have business again. People are going to return to work. So now is the time to be pulling anything out of the way that would make it possible for people to move here and start businesses.

Dan Dokovic [00:40:50] Well, and, and you'll see this, you'll see this too. This is the time that that good businesses prosper, right? This is the time that leadership goes right on top. If you have a leader in your business and that leader is ready to lead, they're coming right on top, right? And that should be the same way with the government. If you have good leadership, this is the time when it comes on top, right? This is the time that, that, you know, maybe may, maybe leadership makes unconventional decisions. This is the time maybe where you pivot a little bit, right? I wanna see that from St. Louis County and from St. Louis City. I have not seen it yet, but I do want to see it. I wanna see that pivot where the leadership says, you know what? This is a great opportunity for our county, for our city to do something. Let's do something that's maybe, maybe crazy, you know, maybe, maybe unconventional, but it'll put us out there and we'll do something with it. Right? You know, we have, we have so many talented people in the city and the county, you know, you know, I I, I see a lot, you know, you know, there's a lot of talk about Dorsey and, you know, and, and Square and, you know, I mean, here's a great, great opportunity. You know, you have, you have great minds here in St. Louis that love St.

Vance Crowe [00:42:18] Louis. So for anybody that doesn't know what Dan is saying is that Jack Dorsey's actually a St. Louis native. So the, and not only did he start Twitter, but he also started Square along with a guy named Jim McKelvy, who's here in St. Louis. And they've been trying to reshore some jobs from the coast to end into the Midwest. Because what you end up finding out is while all the coders are out in the west coast, you're paying them more, but their cost of living is more. So you can cancel that out and actually give an employee a way better quality of life by bringing coders here. So they were doing that before Coronavirus, and I hope that afterwards we just scale it infinitely.

Dan Dokovic [00:42:54] And, and again, let you know, give those those two guys, you know, give them some buy-in into the government here, right? Let them help. Because obviously they're the ones, they've started so many successful businesses, they know how to do it. They can help St. Louis be even a better city, right? I mean, there's so many things that we can do as a city or as a county to be much better, but I think we need to bring in the brightest minds to help us do it. We're not gonna do it just through politics, period. So,

Vance Crowe [00:43:29] So you're now back in the office. You guys are running ab shifts. The, the business market seems to be plugging along. You're, you're making sales right now.

Dan Dokovic [00:43:39] The the sales are going on, the leasing market has, has caught cooled off a bit. We are seeing a resurgence in a leasing market, though. People are starting to get outta their homes. People are starting to look for the office, the offices that we're seeing there. Trading again, is where people want to create that next level environment for their employees, right? And so, you know, this recession is gonna be different than 2008. I think we're gonna see a much, much faster bounce back. Really? And you

Vance Crowe [00:44:21] Think so?

Dan Dokovic [00:44:22] I think so. I think so. See, see, what's, what's going on is the, the problem that we had in real estate in 2000 8, 9, 10, it was fiscally cost problems, right? You had people creating these CMBS tranches, you know, there was, there was financial engineering, everybody was greedy. We got to that point by doing bad, right? This recession, you know, is not as bad. Now, I'm not saying that there were not people out there doing the same thing prior to it, right? There was, there was bad actors in this recession. You'll seal them fail here shortly, and there'll be people on the sidelines ready to pick it up. But there's still a ton of companies out there with really good balance sheets. You know, if you're looking around the country on the residential side, you can already see that the residential real estate is bouncing back. People are still looking to buy houses.

Vance Crowe [00:45:20] Thats the craziest thing of all

Vance Crowe [00:45:22] The neighborhood where I'm at. I think, I think housing prices have gone up some like 10, 15% just in the last two weeks. Like, yeah.

Dan Dokovic [00:45:31] Yeah.

Vance Crowe [00:45:32] It was crazy how much, like I, and I have some friends looking for houses and I was like, well, are you worried about putting your house up in the market? Like, how many people? And they're like, no. As soon as we even started like looking at sites for listing our house, we got so many ads driven towards, anyway, the, the,

Dan Dokovic [00:45:48] Yeah. Yeah.

Vance Crowe [00:45:49] It seems like residential in the suburbs is doing really, really well.

Dan Dokovic [00:45:52] It, it is doing well, you know, and then people again, you know, going back to it, you wanna find a home that you're gonna be comfortable if you're stuck in quarantine, you know? So, you know, I mean, people are gonna probably look for more pools. People are gonna look for, you know, outdoor nice, you know, larger yards, yada, yada, yada. But going back to the commercial side, you know, you are, there's so much money on the sidelines right now looking for distress. I don't think that there's gonna be as much distress as everybody wants, right? Because I don't think it's gonna last as long as it lasted last time. That's

Vance Crowe [00:46:34] Really hopeful, man. I, I,

Dan Dokovic [00:46:35] The banks are in a better position. I think the businesses are in a better position. There's a lot of liquidity on a sideline, you know, this, this, this government, you know, this this government program that, you know, that they're coming out with and, and pumping the, the money into the economy. I think that's, that's been very helpful. I think it's gonna continue to help people. So I, I think, I think we've done a lot more better things this time around than we did last time around. The government acted very fast, you know, even, even thinking about it, you know, this paycheck protection program, you know, it came out fast even though a lot of banks, a lot of, a lot of SBA lenders didn't know what, what the heck they were doing. They did it fast, they funded fast, right?

Vance Crowe [00:47:27] That was nothing short of genius. Like, it, it was very fast. Whether or not that was the right thing to do or put that much money into the economy, you know, you and I both know Travis Liebig with St. Louis Bank, that was absolutely mind boggling how the, the government used the private sector to deliver those PPP like is unbelievable. There's no way you could have gotten a government organization to have delivered the money that fast. Right?

Dan Dokovic [00:47:54] Right. Right. And that the thing that's, that that was a great move on somebody's part to, to use the private private sector to send this thing out. And, and I think, I think banks were incentivized to do it, which made it even better, you know, because banks, you know, they were worried about when, when this thing hit, everybody was worried about their revenues, right? Well, this was something that brought up banks revenues too, because they were able to issue loans that they knew that the government is gonna back up or, you know, buy 'em, right, right along.

Vance Crowe [00:48:26] Well, Travis said, I don't know if he wants me talking about what he tells me when we're not on camera, but what he said, which I thought was really interesting, because of the way that PPP rolled out, a lot of the money came through community banks and people that had normally just been like I bank with the first bank that I walked in the door with, he said like, now we have a chance to start relationships for people to wake up and think about, like, what is a bank? It's not just the place where I cash my check and store my money. It's got all these relationships that I think that the, one of the biggest things that will come out of that PPP program is people will have a very different relationship with their bank. Right. Because it's gonna matter if you can get somebody on the phone now.

Dan Dokovic [00:49:06] Well, and, and, and this is a great commercial for banks like Travis's and, and, and, and the community banks, us personally as a business, we were not doing business with big banks. And that came, stemmed outta the last recession. You know, when you're looking for a bank, you gotta look at a bank where you have a personal relationship, you know, the person behind the counter, you know, the person who is running the bank. Because when tough time comes around, that is the people that are gonna help you out. It is not going to be a call center in who knows where, right? So what, what we were privy through through this, this pro process of the P-P-P-P-P is that a lot of businesses that, that were banking with a larger, you know, larger banking institutions, they could not get their money fast enough. And people who are banking with the local small community banks, they got 'em like, you know, a month before, right? So, yes, I think, I think, and I'm hoping this actually that this is gonna happen not just with community banks, but it's gonna happen. Like with were talking earlier with the whole local economy, that it comes back to the local, to the people that you know, and then what you're really doing is you are really affecting everybody in this little microcosm, right? You, I'm helping you, you are helping me. You know, it's, and it's, I think everybody's, everybody's livelihood is much better that way, right?

Vance Crowe [00:50:39] So, so Dan, you are considered among our like, group of friends, one of the premier entrepreneurs, a guy that came from another country and, and made his way. If you're thinking about a young gun, 20, 21 years old, they've got all sorts of ambition. They've got no money, but they want to find a way to, to get into this thing called real estate. What would be the first couple of steps on that path that somebody could take?

Dan Dokovic [00:51:06] Yeah, my my biggest thing, and, and, and this is going, this is gonna go around and around, but my biggest thing is hard work. You can be as talented as you want to. You can, you can be smart as you want to, right? But again, nothing, nothing beats hard work. I, I'm, I'm, you know, I came here to the United States because of basketball, and so I've been, I've been living my best life watching the, the last dance on ESPN. You know, and, and you look at Michael Jordan, you know, there was a guy that was very much, you know, he had predisposition physically, right? He had good muscles and everything else to play basketball, but what set him apart from everybody else is how hard he worked, right? I mean, when people were walking off the court, you know, wanting to go, you know, relax or go party, he was going back to the gym and pushing people back to the gym. Same thing with entrepreneurship, same thing with work. You gotta put in the time, you gotta put in the work, in business and, and, and, and anything in life you gotta read. I go, I go through, through a month. I mean, I, my, my wife is, is hating me because if you look in my nightstand and if you look in my office, there's books everywhere. There's magazines everywhere. I'm just a constant consumer of information, because what does that do?

Dan Dokovic [00:52:38] That helps you be better and helps you advance and helps you see the differences that other people that don't read, don't see, right? So you, you constantly have to be consuming information, and especially in real estate, because if you're like me, I came here to the United States with nothing really, you know, I came, I came to play basketball, right? And, and then, then you look at it, well, how do you, how do you, how do you beat somebody who's local in this game called real estate? It's not, you know, it's not by kind of, you know, cocooning yourself and, and you know, using your, using your strings with people that you know, et cetera, et cetera, because you don't know anybody, right? You're, you're a foreigner in the United States. So how do you do that? You gotta, you gotta be smart, you gotta work hard, you gotta work smart. You gotta, you gotta find these niches where people don't want to, you know? So what do we do on Bamboo equity partner side? We invest in real estate that's between one and $10 million in purchase price, right? Why do we do that? We do that because big funds don't want to do that because it's same amount of effort to close in a $50 million deal as it is on a $5 million deal. So, you know, what the big funds do is they raise, you know, half a billion dollars, they go ab by it, by, you know, billion and a half of real estate.

Dan Dokovic [00:54:10] And, you know, they make a ton of money. But in the process of that, right, they're not making the prudent decisions. What we do is we're buying much smaller real estate. We do much smaller funds, and we're very successful at it because of that. You can't, you can't say that you're gonna buy. Now, I, there's one, there's one difference, Blackstone, right? They're, they're, they've got it covered. They, they raised billions of dollars and they're very successful with that. But my feeling is the more money you raise and the more money you put out there, it's harder to be successful because you, you forget what you are in the business for. You know, you start becoming a financial engineer instead of starting to being a real estate owner and developer and whatever. So again, focus on niches niche that other people don't wanna focus on because it requires hard work. So,

Vance Crowe [00:55:05] I love it. That's a great answer. And as you look around at the world, just to kinda round out the interview, what do you think the world's gonna look like in two weeks?

Dan Dokovic [00:55:15] Two weeks, same as it does today? You know, it, it's, it's hard to break habits. It, it, it's very hard to get people to, to move away from their habits that they formed. And now we're literally formed some habits. We were in this quarantine for three months now you create a habit by doing so, so what's gonna happen in the next two weeks? It, it's not gonna change as much. What's gonna happen in next two years? I believe that it's gonna change a lot because we're gonna be a lot small, smarter from this experience. I don't believe, I don't believe we're gonna get caught. Like we did get caught this time around with, with a virus. Now maybe there's something out there that we're gonna get caught. Maybe it's gonna be a natural disaster. You know, a lot of people are talking about, you know, global warming and is this, you know, is, is this really happening because of we're not taking care of our, you know, habitat, right? And so, you know, is that gonna change because of this? Probably not as much, but maybe if there's another disaster or a hurricane or earthquake, well maybe then people are gonna start thinking about that. So I think, I think as humans, we're kind of very narrow minded and we go in the direction that we are pointed to. So in these last three months, we were pointed in a direction, we're gonna fight that direction, but then later on we're gonna find something else. So,

Vance Crowe [00:56:43] Hey, I, I mean, it's interesting to me because everybody comes on, I ask them this question, and I would say 90% of people say there'll be no difference in two weeks. And, and it's interesting because if you look back to two weeks ago, I'm not so sure I could point out that much of a difference. So I don't think people are wrong, but there are giant moves happening, right? And they're probably these tiny little changes that are happening that two weeks from now or two months from now end up being this big thing. But it's, it's, it's imperceptible as far as I can tell.

Dan Dokovic [00:57:15] Well, it's just like anything in life, you gotta build small steps, right? Nobody, you know, went from here to, you know, over there. You, you

Vance Crowe [00:57:26] Have to build not stably anyway, if you do

Dan Dokovic [00:57:28] Not stably, right?

Vance Crowe [00:57:28] Yeah.

Dan Dokovic [00:57:29] And so you build small steps. You know what, what do we do currently in our business is we're building small steps in this bad time, right? I mean, this is considered a bad time for real estate, right? But what can you do in a bad time? You can build small steps to improve yourself. You know, you can build small steps to, to maybe affect the change two years down the road, right? And that's, that's, that's all you can do. You really shouldn't be doing anything, anything crazier than that. You know, as long as you're doing that, I think you're gonna be successful. You know, make small, make a lot of small steps and fail. Right?

Vance Crowe [00:58:07] Amen. But if you fail on a small step,

Dan Dokovic [00:58:09] If you fail on a small step, it's not a big deal. Right? Right. If you fail on a big step, well, you know, then it might take you, take you some time to get back on your feet, right? So

Vance Crowe [00:58:19] Dan, I am so grateful you were willing to hop on. I've been dying to have a conversation about commercial real estate, but I wanted to get far enough through this thing that, that we could have some answers and you delivered. So Dan, if people wanted to get ahold of you, find out more about your, your real estate company, your fund, how could they do that?

Dan Dokovic [00:58:36] So the, the two best ways is, is our website, if you go to bamboo equity.com, and also on our, on our sister company, Inca Commercial Real Estate, you can Google that or you can just put it in a,

Vance Crowe [00:58:52] I'll put it in.

Dan Dokovic [00:58:54] Sure. And again, you know, you'll, you'll find out a lot more in there. You'll find out, you know, some of our, some of our pieces of, you know, literature out there that are out there about the future of real estate, future of office space, et cetera. And so kind of spent some time through our websites and, and see what's in there because there, there's some good pieces of information there. So.

Vance Crowe [00:59:17] Well, thank you so much for stopping by. It was great chatting with you, Dan.

Dan Dokovic [00:59:20] Thank you. Appreciate you and stay safe and we'll hopefully we'll, we'll see each other soon.