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CVS is Peekskill, NY with Adam Ifshin

Chris Ressa sitting at a desk, talking into a microphone
Episode #: 026
CVS is Peekskill, NY with Adam Ifshin

Guest: Adam Ifshin
Topics: CVS, DLC Management Corp.

Transcript:

Chris Ressa 0:02
This is retail retold the story of how that store ended up in your neighborhood. I’m your host, Chris Ressa. And I invite you to join my conversation with some of the retail industry’s biggest influencers. This podcast is brought to you by DLC management.

I’d like to thank one of our sponsors, retail openings and closings.com. In today’s dynamic retail landscape, tracking openings and closings before they take place has never been more important. Having this intelligence is an undeniable competitive advantage, retail openings and closings.com also known as Rock Tracks, future openings and future closings, comprehensive, accurate and reliable the rock is your crystal ball and the key to making well informed decisions with confidence in today’s evolving retail climate.

Welcome to retail retold everyone. Today we have a very special guest is my boss, my partner, most of all a friend. He is the CEO of DLC management. Adam Ifshin.

Welcome to the show. So Adam, you are an entrepreneur. And why don’t you tell us a little bit about DLC and how you lead this organization and your take on leadership in the real estate industry today.

Adam Ifshin 1:33
Well, thanks, Chris for having me on. And I you know, it’s kind of funny to talk to you about my my biography or my CV given that you’ve known me for so long, and we’ve worked together for so long. But I think the simple thing, I two things from a personal background perspective is, first and foremost, I consider myself a team building entrepreneur, I don’t consider myself a portfolio builder or an asset aggregator I’ve always considered myself a team building entrepreneur. And I hope one day that people will remember me in the industry is the guy who built a phenomenal team that could do incredible it could overcome incredible challenges and have great success. More than being remembered for any one deal we did or asset or redevelopment we did or trend one transaction we did. That’s the first part is the second part. And maybe for younger people in the audience who don’t know me as well, you know, most people who who end up running their own business in our space.

because I really do consider myself you know, truly first and foremost a team building entrepreneur

is that has grounded me right? I am always trying to think of all of the different stakeholders and how to balance them out, and how to balance the risk associated with them out. So that’s, you know, obviously, that’s the tenants and the tenants customer, the consumer. And that’s, you know, our stakeholders, first and foremost, our team and our investment partners, big and small, and our lenders. And I think the fact that I came up doing having to know how to teach myself essentially how to do all of those different things.

Ressa 4:28
Why do you take the team building entrepreneur mentality into real estate? Why not a different venue? So, you know,

Ifshin 2:35
As an owner, redeveloper developer, whatever you want to call it, typically come up in one of two tracks, right, they either come up on the development slash leasing side, or they come up on the capital markets slash acquisition side. And, you know, different different CEOs come up in different ways. We all know people who have come up in both tracks, I think, perhaps one of the things that that makes my experience and road to getting where I am with DLC today is really that I

Ressa 3:07
didn’t have a track is that I did both. I

Ifshin 3:11
never thought of myself only as a finance guy. And I never thought of myself only as a deal guy or a developer or an acquire or leasing guy. And at times, I think it’s led for people to be like, somewhat confused, but for me,

That sort of has infused DLC in my view is not being all about the finances are all about any one deal or any one relationship with one tenant. So I think that’s the one thing I would say that is probably a little bit different than a lot of other people who you see as the CEO of a company like ours.

because I’m not that inventive. And I’m the son of a real estate broker and a son of a failed residential real estate developer and I wanted to be partners with my father, and I never thought of doing anything other than real estate. I grew up around it. You know, my father did Did brokerage deals with, you know, Harry Helmsley, you know, all of the big New York landlords Hartz mountain and the Fisher brothers and the rutan’s and the ResNet x and, you know, some of the biggest companies in the world like General Motors and but at the end of the day, who Lord knows, even to deals with Trump, yeah, I never thought about doing anything other than real estate. It’s kind of funny. And in retrospect, I missed the whole tech boom as a result of it. But I’ve always believed, I always love the concept that if you did something, and you did it well, that it could create for you a recurring, you know, income stream, I found that very, very attractive. Since I had grown up in a house where, you know, you knew exactly at eight years old, how good the commercial brokerage business was, because it was exactly the quality of what was on the plate, you know, less protein or hamburger, not a good year, Mom, you know, cried over the soup, not a good month, but like, Oh, we’re going on vacation must be a really good year and commercial real estate, having grown up in a house that rose and fell financially based on the vicissitudes of the brokerage market. And the deal volume market, I was very, very interested in how

Ressa 6:19
could I build a business that was

Ifshin 6:22
interesting, and fascinating and challenging. But if it worked, you could create recurring cash flow streams, I was inherently an IBO still, to this day, far more risk adverse than my dad was. So when I set out in 1991, with him, I wanted to do something that I hoped would ultimately, you know, create durable cash flow

Unknown Speaker 6:43
stream stress.

Ressa 6:45
You say more risk adverse than your father, I might say your risk tolerant, if I were to put you in the risk bucket, at least compared to other industry, C suite people, it would feel like you’re risk tolerant. And that’s paid dividends for you over the years. What’s your take on that?

Unknown Speaker 7:07
Well, I

Ifshin 7:08
think who the quote unquote leaders of the industry are have changed so dramatically. In the 29 years since I started DLC. You know, when I started DLC in 1991, the leaders of the industry, were not CEOs of public companies with exceptional, you know, governance rules and low leverage. I mean, the CEOs were, I mean, they were cowboys, right? These were, these were people who worked on 110% leverage, and, you know, they would do whatever it takes to sign go figure a Kmart lease, right? The reality is, is that who you look up to, as leadership in our industry has changed so dramatically from the guy that always is in is in my mind is there was a there was a local developer in Westchester County, who was like voracious a guy named Bernie, rose and shine. And, you know, he was, you know, when we first looked at the shopping center business, that guy was everywhere, building everything showing up at job site meetings, and his Rolls Royce and his $4,000 suits. And, I mean, it was it was it was tight. It was like foreign. It was like, the guy had more money than God. Turns out, he’s really, you know, he had a tough time in that real estate depression, because what he had was immense leverage. But the people who, who seemingly made a lot of money from nothing, and were the people that people looked up to, you know, I didn’t know any of them in 1991. I didn’t even know that ICSC existed. I know that ICSC had a board, let alone now. 29 years later, I’m on the executive board of the entity. But those were the people who were the founders of the industry, the guys who built you know, the malls of America, the ao taubmans, the Mellon herb Simon’s the David hawkers, the Richard Jacobs, and, and all of their open air counterparts, you know, and there were so many of them. Now, I guess I look more risk tolerant because of the people who are our size, DLC size and bigger and open your shopping center. Right? They’re only a man, maybe they’re five or six groups that aren’t pure institutions that are bigger than us that are privately help. Right. And rightly or wrongly, people like me get compared to lots of public company CEOs. And we may operate at 60 or 65% leverage and they all most of them, not all but many of them operate at 40% or

Unknown Speaker 9:39
less. And in many

Ifshin 9:41
instances, the public company repayment open air shopping centers, I say this all the time. They look awfully like opening the core funds with daily liquidity and they don’t really have a lot in common with buying underperforming assets and redoing them. Now some of them do some selective ground up develop They do it very well. And some of them do some selective redevelopment. So maybe I look more risk tolerant because of the nature of what we do, and compare to other CEOs are now today, you know, managing large pools essentially of institutional money. But compared to the people that I looked at, when I started the business, I think I’m pretty risk averse. You know, you’ve heard me say this before, Chris, I think of being an entrepreneur is the first two absolute things as an entrepreneur, company owner, no matter what the business is, you have to do is first you have to build be an incredible builder, of teams, and creators and nurturers of cultures and defenders of phenomenal Business Cultures, that’s always number one, people always come first. But the second most important thing is at the end of the day, you have to be your own best risk manager. You can’t you can’t delegate that to someone else. You can’t.

Ressa 11:06
You can’t, you know,

Ifshin 11:07
hire or have a risk management committee, even if you’re public at the end of the day, I believe that, you know, one of the CEOs fundamental core responsibilities is to be the penultimate Risk Manager, for the organization for the entity, and to infuse the culture of the organization and the people with an appropriate balance between how can you be even if you’re not the entrepreneur? How can you be entrepreneurial in our culture, but how can you also be a reasonable risk mitigator and a reasonable risk manager at the same time, and I know that can sound counterintuitive, but you can’t have only risk ageing, with no governor. And if you’re so risk adverse, that it’s very hard to be an entrepreneur. And, and not be prepared to take some level of risk if you want to, if you want to create genuine wealth.

Ressa 12:09
That’s unbelievable insight. So I think the listeners will, will enjoy that. I think the other thing, before we get into the story about the deal, you’re an entrepreneur, but CEO of 120 person company, in today’s world, maybe even

pre COVID 19 What is

the CEO doing today? And, and maybe what you know, describe some of the interactions between you and myself potentially, in some other C suite members that DLC so people can get an idea of you know, from an account into a leasing person to the difference in what’s happening, higher up the food chain in organizations.

So I think that

Ifshin 12:58
I think the first thing to take a step back is is that you grow and you change as CEO, just like anybody who grows and changes and develops. And I look back on the CEO, the CEO, I was the first 1015 years of DLC, and it’s not a pretty picture, to be candid with you. And I think that

Ressa 13:20
how I think about

Ifshin 13:23
what my role in the organization is, is very, very different now than it was even five or 10 years ago, I’m much more focused on team building, culture, building, culture, defending and infusing people with responsibility and knowledge, so that they can accept responsibility, and excel at the opportunities that having that responsibility presents for them. I’m not as young as I used to be. And you know, the days of, you know, me single handedly dragging any given deal or transaction over the finish line I’ve learned as a negative is actually a negative outcome for the organization. I think that one of the things I am proud of is that talking to you today, I don’t think that I’ve ever granted more responsibility and spent more time teaching as a CEO than I have in the last six to 12 months. And I’m not that young anymore, and 55, almost 55 years old. I’d like to believe that that’s the way of the future and the path forward is how many great talented people can we develop a DLC and can I have a hand in? Because one of the things about our businesses, it’s infinitely more complex than it was five years ago, 10 years ago, 20 years ago. And as business gets more complex

Ressa 15:00
You have to have better

Ifshin 15:03
ever better communication, collaboration and team cohesion, three C’s. And you have to have better people who you were prepared to give more and more responsibility to, you know, as you know, over the last

Ressa 15:20
year,

Ifshin 15:23
we parted ways with a couple of people who I think were very, very strong, individual performers. But we ultimately determined that they were not good team players, and they were not good at allowing the people coming up, who were reporting to them to grow and develop. And those were very, very hard decisions, not decisions that we took lightly. It’s incredibly important that we continue to develop more and better talent, and we give people meaningful roles and responsibility. And one of the things that’s gone on in this crisis, which I think is just fascinating, is, even though we can’t teach in groups, or small groups, or one on one, I tap into zoom calls on all manner of different issues across all different parts of the organization from a count Junior and mid range accounting people collecting rent, and doing cash flow projections, to asset management, in their communications with lenders, and, and, and with our investment partners to, you know, harping on with you and people about specific tenants.

Speaker 4 16:35
And I see, it’s, it’s

Ifshin 16:38
almost surreal to be able to sit into your house, get on video, read emails, and watch people grow in front of you. I will the number of people in our organization

Ressa 16:55
who have stepped up, be on

Ifshin 17:00
not their capabilities, because they’re clearly capable, but who are learning and growing even through this process. That is the thing, that in the face of just some unbelievable challenges that we all face. Now. That gives me great hope. Those three C’s communication, collaboration, cohesion, I, they’re better now than when we were all in offices every day or at projects every day or meeting in, you know, remote locations every day. The The reality is, is that I think most people in the organization, I think would tell you that they feel they have a stronger connection to me now than they did eight weeks ago.

Ressa 17:44
And I’m very proud of that.

I think that, you know, we’ve spent an inordinate amount of time with by you focused on team building and focused on our culture. And I think it’s times like this when it it comes through. This is the final exam for how good your culture is. It feels like it’s coming through that people you never you might never have thought are stepping up. People who always step up or stepping up more. And it’s amazing to see. So I

couldn’t agree with you more. Speaking

of that, I don’t want to be, you know, I don’t want to be tone deaf to what is going on in the world. You’ve been a part of the savings and loan crisis in the late 80s. The tech bubble 911.

Great Recession. And now this,

is there any comparison? Is this totally different. How are you feeling right now? What’s your what’s your take on the world?

Ifshin 18:46
So as you know, but perhaps maybe all of your listeners don’t an economic historian by academic training, and are the thesis in economic demography? I will tell you that, at least in my professional career, there is no remote comparison in terms of the level of dislocation that is occurring to the economy by this event.

Ressa 19:21
I think that comparisons to the

Ifshin 19:25
great financial crisis or the great recession or whatever you want to call it 2008 2011 are only relevant from the point of view

Ressa 19:36
that the

Ifshin 19:39
Federal Reserve and Treasury and the ECB and the Bundesbank and all of the other institutions, international monetary institutions, have a toolkit of things to do. That will help lessen the Six Sigma move we’ve had the six standard DV Asian Black Swan event that we’ve had, in terms of unlocking frozen financial markets, making sure that things like money markets, and repo, and all that kind of stuff work, they have a toolkit from that last event. But other than that, there’s no comparison. I mean, you’re talking about

Ressa 20:19
potentially, this could be, to my knowledge,

Ifshin 20:28
perhaps only one of maybe the first time that maybe one of maybe three years ever in the entire history of the United States, where the population

Ressa 20:38
could actually shrink. That’s an extraordinary

Ifshin 20:42
thing. You know, we’re in the we’re in the business of providing places for Americans predominantly middle class Americans to get the goods that they need to live their lives

Unknown Speaker 20:54
every day. And the

Ifshin 20:57
first thing to think about is, we have a total disruption of the economy, even at the savings and loan crisis, which I think was a bigger hit to the real estate industry than the global financial crisis. You know, you didn’t have 234 months of the economy simply vaporize. And remember, the economy is much bigger now than it was that’s 2530 years ago, the economy is much, much bigger now than it was then. So losing 60 days of the economy is an extraordinary thing, the concept that in the last two weeks, the number of people who have had a file for unemployment, and the number is gonna be bigger this Thursday,

Ressa 21:36
just for warning. Yeah.

Ifshin 21:39
It was extraordinary. So I don’t think that there is a comparison.

Ressa 21:43
That said, the world has

Ifshin 21:46
also never had the tools at its disposal, or the knowledge at its disposal to fight that. We know the mistakes that were made in the Great Depression, we know that the lack of stimulus that, you know, in the in the Hoover administration made the Great Depression far worse than it could have been. And I’m not saying by any means we’re going to have a depression here. The the response from both a monetary policy, and now from a fiscal policy perspective, by the American government is truly unprecedented. truly unprecedented. The two together represent at least three acts, what was done in the global financial crisis, you’re talking about $2.2 trillion stimulus? I am firmly convinced there will be additional stimulus behind that. You know, is the stimulus perfect? No. Is it designed the way I would have designed it to get a better multiplier effect of spending the money on the economy? No, but the American government has put an extraordinary amount of weaponry on the field, from a fiscal and monetary policy perspective that I believe

Ressa 23:01
will

Ifshin 23:05
radically lessen the blow of what’s going on. But that said, this is this is unlike, almost, there’s almost no one alive who’s seen something like this, you know, there are very few people who are old enough to be alive now to to have studied and knew understood, the radical change of the economy during either World War. I mean, this is this is historical i is, you know, I have three young adult children, one of whom actually works with you and idlc as part of the team. I’ve told them, and I’ve told any young people who will listen to me, which probably are too many, that this is the seminal event

Ressa 23:46
in your life. Right here,

Ifshin 23:50
right now, you are going to have your will have lived BC, and AC, before COVID-19. And after COVID-19. Now, the good news about this is there’s going to be an end. Right? There will be there’ll be it will, it will end there’ll be drug treatment. So ultimately, that’d be a vaccine, you know, how much how what the damage is and how long it goes, is very hard to predict right now. We can be hopeful that there’s massive stimulus on the way I think we can be hopeful that the government will continue to do everything it possibly can to promote that. And I think that, you know, the economy I think will be resilient. But I think it’s unrealistic to expect that, you know, okay, on May one, the economy is going to, we’re gonna flick a switch, and the economy is just gonna go back on the way it was before. I think that’s unrealistic. But I also think it’s unrealistic to expect that we’re gonna have some depression for five or 10 years. I don’t believe that. And I’m not a Pollyanna guy. But I think there are a lot of reasons to be optimistic in the mid term to long term We will recover from

Ressa 25:01
this. I haven’t

heard a lot of people speak about and going back to the beginning of population decline and the effect that has on the economy. I hadn’t thought of that. Clearly, that’s not good. If we have population decline, you know, we were already in a place where

the birth rate

was declining. And if you have a, you know, so many deaths related to COVID-19, and potentially not as many births in the in the short term. You know, that’s not a great recipe right there.

Ifshin 25:39
Yeah. But the reality is, is that, and luckily, you know, the concept of birth rate and TFR or what demographers call total fertility rate is what I wrote my thesis about. The reality is, is that what most people don’t understand is, the single biggest determinant of GDP growth in any given economy

is the growth in the population of that economy. And you can grow, you can grow population in a country three, three ways. You can have more babies than you have people who pass away, you can have people live and work longer. And you can have in migration we have had in the United States in the last

Ressa 26:27
two decades,

Ifshin 26:30
a falling total fertility rate. We don’t look like Japan, or France, or Norway or Germany, but it has fallen and it has fallen quite a bit. You know, one of America’s great strengths is that, for all of the ups and downs in America, there are billion people who would like to come live here. And one of the things that troubles me greatly is and you’ve heard me talk about this before, is not only in this administration, but particularly in this administration, but also in the prior two administrations as well. There has been a bias against increasing legal immigration. And I think that’s a terrible, terrible thing. The single biggest determinant of how fast your GDP grows is how fast your population grows. Hands down, I don’t care about yet. Yes, productivity increases are important. Technological innovation is important. All of that stuff is true. You know, your balance of trade is important. But the single biggest determinant, if 70% of your GDP is consumption by consumers, is population growth. And hopefully, one of the things that will come out of this well, hopefully, we’ll get two things out of this. One is I would hope that we would, hopefully starting next year have a meaningful discussion about how to be more thoughtful about meaningful immigration, legal and legal immigration. And to, you know, if you’re quarantining with the right people, and there are rumors that certain forms of birth control are in short supply, I have no idea why in the country at the moment, you know, maybe we’ll get a little baby boomlet here, which the the economy would should thank all of those, you know, people who do that. Because they will be doing they will be doing their part of the economy. Historically, I mean, you know, if you think about things that have historically, in the 20th century, greatly impacted population growth in America, they’re really, they’re really a few events, right? World War One, which was actually from an American involvement perspective, fairly short. But more importantly, the Spanish Influenza immediately following World War One,

Ressa 28:42
World War Two. And

Ifshin 28:46
the limitation of immigration after 1913, those three things are the biggest three negative impacts against population growth in America in the 20 years since 1900. And if you think about it, after the First World War, and after the Spanish Influenza was over, there was a baby boom in the United States. And obviously, there’s the famous baby boom, of after World War Two. I don’t think we’re going to a world where American women 18 to 34, are going to have 3.8 live births like they did between 1946 and 1958, or 1960. But perhaps we’ll go to a place where, you know, one of the things that I think is going to come out of this is people are going to see the relative value of home and family. Totally. And I think that, you know, selfishly, and I’m quarantining, as you know, with my wife and two of my three adult children, my daughter is married, so she’s with her husband. It’s nice having your children around.

Ressa 29:45
It’s really nice. Totally.

Well, listen, that was fantastic. I want to pivot and unique perspective on where the world is today and appreciate those insights. But you have an interesting story about a about a deal. And that is CVS and Peekskill, New York. Why don’t you tell us about that?

Ifshin 30:10
Yeah. So you know, in thinking about which, which one to talk about, it turns you know, one of the things, having done a lot of interesting redevelopments, I had a wide variety of choices to pick from, you know, whether that was the first to doing the first LA Fitness in the east or, you know, doing targeted rockling I, at the end of the day, I chose this CVS example, mostly because it’s a great story. It’s a great story at the end of the day about the friendship between two extraordinary people.

Ressa 30:43
So

Ifshin 30:46
I spent a year in 1999, and 2000, convincing a family of six children to sell me a shopping center that their, their father had built Peekskill, New York. And this is a slight aside my wife’s family, it had a store

Ressa 31:02
in that shopping center.

Ifshin 31:06
When my wife was a child growing up, and when I met my wife, she was living across the street from the center, just coincidentally. And we bought the center, it was a total redevelopment play. And right after we bought it, the grocer, Grand Union filed for bankruptcy. And we went to like 70% occupancy, and it was falling apart. And it was really, it went from being a very great redevelopment potential to being a

Unknown Speaker 31:34
potentially real problem.

Ifshin 31:38
I convinced I convinced Stop and Shop to include the LOTE the Grand Union location, in their bid and bid in the bankruptcy in the Grand Union bankruptcy, and they bought 61 locations, including this one. And I said, Oh, great, they’re going to run it until we can redevelop it. And they called me up and said, Yeah, we bought 61 stores, we’re going to run 60 of them, we’re closing yours, we would love to do a redevelopment with you. But unless you can figure it out, we can’t run that store profitably, the store was like 33,000 feet, so it was a bad size. immediately adjacent to that Grand Union box was a 9600 square foot, CVS that was on an original 1956 lease from the Whelan drug company. And next to that were nine in line tenants in night in line spaces, seven of which were occupied. And we set out to try and figure out how to redevelop the shopping center, and Stop and Shop wanted to build their brand new Richmond prototype, which is about 7065 70,000 square feet. And it required, amongst other things, relocating CVS, and seven inline tenants, none of whom had relocation clauses or demolition clauses in their lease. And CVS did about $11 million a year and a big percentage rent payment. And we dealt with two different people at CVS who basically told us to go pound sands for two years. And we couldn’t figure out why. And we were offering them anything and anything you know, we’ll find another location in town and move you out. We’ll try to put you in a pattern in our parking lot. No, no, no, no, no.

Ressa 33:21
So literally,

Ifshin 33:24
like we were banging our heads against the wall regional guy, the VP, nobody wanted to talk to us, we would talk to them. And it was in one ear out the other, we were making no headway. And it was not a good situation and Stop and Shop was very anxious. And

Ressa 33:41
so one day,

Ifshin 33:45
in a conversation with Stop and Shop, and I was working with my friend at Stop and Shop, Tim Mahoney. He said, Well, you know, you really want to talk to Tony and Tony was Tony kala Volpe, who was the head of real estate for Stop and Shop at the time. Because I think there’s a lot behind the scenes here that even I don’t know about. Then it turns out that Tony had a relationship with my father, Steve, my partner. And so they spoke to my father came in my office, we got a real problem. I said, I know we got a problem. Did you do anything to solve it? This is no we have a bigger problem. He goes apparently, CVS and Stop and Shop are fighting, including in some places litigating exclusive violations between each other in 46 locations.

Ressa 34:31
And I was like, oh, Mike Well, no wonder

backing up Tony. Tony’s from CVS, not sapno

Ifshin 34:38
Tony, Tony Cole Volpe was the head of real estate for Stop and Shop in Oklahoma. Yeah. So then all of a sudden one day we get a phone call.

And we get a phone call from somebody says I am the new regional representative at CVS for WestJet to cover amongst other things beach shopping center in Peekskill. York. And the gentleman at the other end of the phone called my father was alcoholic Gary.

And it was the first time that we had ever heard of alcoholic Gary and Al had been at CVS for probably, I don’t know, somewhere 345 years I knew he had been at Burger King before that, never done a deal with them. My father had never done a deal with them. And he said, I’d like to come you know, meet you. So my father and our that for the first time. And our gave my father the whole download on the level of the fight and the animosity between the personalities in Woonsocket Rhode Island, where CVS is headquartered. And in Quincy, Massachusetts, where Stop and Shop and hold USA are

Ressa 35:49
headquartered. And together, they mapped out a plan where, how

Ifshin 36:01
got a whole bunch of people at CVS to agree on locations where they would force trade with Stop and Shop and my father became the go between because they wouldn’t talk to each other, between Stop and Shop and CVS to resolve the to resolve it so that we could make a deal in

Ressa 36:22
Peekskill, and then allocation

Ifshin 36:26
to us and made it, it was a tough deal. I’ll never forget it. But literally, we moved them. When they finally agreed to move to a pad, they got a prototypical pad with a double drive thru. We had to amongst other things, do $800,000 of additional site work to build retaining walls to get their building to fit on the site. I went and got four different variances for that building alone from the city of Peekskill. And we build them a turnkey down at a cash wraps, and their rent went

Ressa 37:03
down. And

Ifshin 37:10
it was all good in the end. Because as scary as that as crazy as that sounds, it enabled us to demo, one end to the center, spent $4 million dollars to flatten the site. We built Stop and Shop, Stop and Shop and I said had a deal on rent. And it was, you know, it was a pretty good deal. And you know, at the end of the day, the cost to move CVS just got so crazy when to stop shop and they’re like Adam, don’t come to us, we have no more money. We have no more rent, we have no more money, there’s nothing we can give you. And I said, Well, would you give me more term? And they’re like, yeah, we’ll give you more tire. So we ended up with an exceptionally long lease. It’s not a 20 it wasn’t a 20 year lease. It’s either 25 or 29 year based term lease. And it all worked out. You know, it all worked out the end we were able with with Stop and Shop and we’d Stop and Shop and CVS as anchors and we brought Dollar Tree in and we bought a whole bunch of other locals nationals and regionals in, you know, we took a center that we paid about $15 million for spent about 90 more. And you know, we ended up with an asset that was worth a multiple of that total. You know that total investment. It’s one of the best certainly one of the best deals we’ve ever done. It’s certainly one of the most rewarding deals I think we ever did. But, you know, to build a turnkey CVS and watch the rent go down was pretty crazy. And you know, for for the longest time after that everything was fine center became very successful. And as good as the deal was, that’s not the best part of the story. The best part of the story is after starting probably three or four years after that store was built in open. My father spent three years convincing our Calgary to come to DLC. And the real benefit we got for removing CVS from inline from that well in drug 1956 lease was that out came to be part of DLC, and helped us build our own net lease development business, which has been as you know, very successful. Ours has been an extraordinary team member, an extraordinary partner. And he really became one of my father’s closest friends. So the best thing that came out of that store that ended up there in your neighborhood was the two people that not that many people know our Caligari and Steve Shin became best friends. And that was really the greatest part about it. And then there’s one last little tidbit. So CVS did about 11 $12 million. The last year they were in line, and as I told you, their rent went down for no expenditure on their part. And many, many years later out Caligari told me that the pro forma first year sales,

Ressa 40:07
which they met in that store,

Ifshin 40:11
were over $22 million wanting to

Unknown Speaker 40:13
lie to committees.

Ifshin 40:15
So they could have paid me double the rents. They were. So if you but you know what it turned out to be a win win for everybody. It was a win for the community. It’s win for the local consumer. It was win for us. It was win for Stop and Shop was clearly a big win for Allen’s career at CVS. CVS not only got the store in Peekskill, but they got a resolution to fight they were having all over New York State New England, between them and Stop and Shop and Stop and Shop got the same thing.

Ressa 40:45
And

Ifshin 40:46
Steve shouted out Calgary found best friends. So it’s a win win, win win win.

Ressa 40:51
unbelievable story. It’s one of my favorites. That’s I’m so glad you got to share that with us. It is That is unbelievable real estate story and way more than a real estate story. So I think that’s gonna get a lot of positive feedback from everyone out there. So many takeaways. One thing I’ve never asked about that, and I know the story. Whatever happened, the seven inline guys that weren’t CVS? Did you buy the map? Did you terminate them or they tenants in our center today? So it’s a mix.

Ifshin 41:28
I think at the end of the day,

Ressa 41:30
one, one we bought out for cash.

Ifshin 41:36
One, we had a deal to buy out for cash, and he ended up something happened. I don’t remember what happened. He got sick, or he may. One sort of just went away.

Ressa 41:50
One we bought out. And

Ifshin 41:54
there were seven, so five others we relocated, and a couple of them are still there. So pastels, which is sort of like the coffee shop,

Ressa 42:03
right? Yeah. They’re still there.

Ifshin 42:08
And we moved them kitchen and all.

Ressa 42:13
We moved I

Ifshin 42:14
can’t remember I think we moved the liquor store. I can’t remember. I we moved the flooring guy who I think is no longer with us for probably 10 years after we moved him and we moved Payless who was with us until they went bankrupt. Got it. So yeah, now is some of there is at least I think there probably I’d have to go back and I didn’t look at it. I didn’t look at a site plan before this. But there are at least I

Ressa 42:44
think there are at least two. Got it.

Ifshin 42:47
And remember the deal. Those tenants were relocated in the fall of 2002 spoke was Stop and Shop opened in the fall of 2004. So they may have been they were either really they will probably relocated in early 2003.

Ressa 43:06
unbelievable story.

That’s really cool. I think there’s a lot of takeaways for the listeners, whether you’re a finance guy, a leasing guy, it doesn’t matter that that’s a great story. So

Ifshin 43:18
that we go we could we could do a whole separate thing on the other parts of beach, some of the construction stuff and yeah, was crazy. The site work was crazy. The financing was crazy. But I still the best part of the story to me is is the Steven our part of the story?

Ressa 43:31
Yeah. And now I get the good fortune every day to be on our 8am executive management call and Al’s on there. Thank you, Steve.

Ifshin 43:41
We all have a lot of things to thank Steve Lipson for.

Ressa 43:44
So all right, that was awesome story. Now to the last part of our program here. So I know you’ve you’ve listened retail wisdom as part of the show and three questions. Are You Ready? Ready. The best piece of commercial real estate advice out there for everyone. It’s always people before assets. And in the context of people,

Ifshin 44:16
particularly now when I think a lot of people tend to have a very zero sum mentality. The way to do great things with people is to craft Win Win solutions

Ressa 44:26
whenever possible. Okay, all right.

Love that. I agree. We say it all the time here Pete where people first asset second. So it’s one of my favorite things, if not my favorite thing about this organization. So

I’m glad you have that. The

second question, and I’m really interested to see here this one extinct retailer, you wish would come back from the dead,

Ifshin 44:58
extinct retailer, I wish would come I’m back from the dead.

Unknown Speaker 45:01
This one, this one actually

Ifshin 45:03
is like alarmingly hard for me. So I have a very personal one, which was not a chain, which is when I was a kid, I used to collect stamps. And there was this little tiny stamp store in Midtown called diplomat. And the old man who ran it taught me so much. So he was, that was my personal fave. But I have a very odd one from the chain world, which is the first shopping center I ever bought as a principal how to Service Merchandise in it. And while I thought Service Merchandise was a terrible retailer, I wish they weren’t extinct. Because Ray’s Immerman, who is the CEO of Service Merchandise, was the first CEO of a retailer who ever asked me for a favor that I could actually get.

Ressa 45:46
What was the favor? So

Ifshin 45:48
he asked me for additional signage, which the previous owner had denied. And I thought it was the stupidest thing I’ve ever heard. Why wouldn’t you let a retailer put a sign on the back of their store as well as the front. And he actually got down on his knees in his leasing suite in Las Vegas and asked me for a favor. I was one T was I was 26 years old. And Ray Zimmerman was like, Daddy, he’s like 60 at the time. And here he is his big muckety muck CEO. And he actually got down on his knees, and he asked me for an extra side, and I was like, you could have whatever you want Mr. Zimmerman. And actually, Chris, a guy you just did a deal with, was

Unknown Speaker 46:36
in the room when that happened.

Ifshin 46:40
His young director of real estate was Rick France. Hmm. And Rick Franz was in the room when it happened.

Ressa 46:47
Interesting. For those who don’t know, Rick is at Ulta. Now that that’ll be a fan favorite. Interesting. So the last

question, I don’t know how long it’s been. Since you’ve been,

you know, grooming a beard and wearing a beard. But it hasn’t been. It’s not five years, maybe two years, maybe less.

Ifshin 47:09
It’s it’s, it’s a I can tell you exactly what it is. Unfortunately, it’s a marker in my life. But I grew i I’ve had I had a beard on and off from the time I was 19. But I hadn’t had a beard in many, many years. And I grew my beard back after my father passed, which was in November of 2016.

Ressa 47:27
All right, so that said, one of the hottest beard companies out there the beard club.com They have a their there’s their club kit, which includes the P t 45. trimmer, free cedar beard oil, cedar, beard balm, and Beard Shampoo with your first order. What is the retail price of the PT 45? Beard Trimmer club

kit? Wow. I have how I you know, I

Ifshin 48:03
legitimately have no idea. Right? And this is like what it normally cost? Not what they give it away for the first time.

Ressa 48:09
Is that what you’re saying? Yeah. 3999 close to

$55. But thank you for playing. That was good. Well, listen, that was amazing. Adam, thank you so much. Everyone’s gonna love this. I think this is amazing timing. I’m pumped. And I think your family will enjoy it. I think everyone idlc is going to enjoy it when they hear this our story. Thank you very much. Love you, buddy. Love you too. So talk to you about Damn, you gotta hit. Alright, bye bye.

Thank you for listening to retail tools. If you want to share a story about a retail real estate deal that you were a part of on our show. Please reach out to us at retail retail at DLC mgmt.com. This show highlights the stories behind the deals from all perspectives. So it doesn’t matter if you’re a retailer, broker, entrepreneur, architect or an attorney. Also, don’t forget to subscribe to retail retold so you don’t miss out on next Thursday’s episode.

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