Today, we are joined by Randy Streig to talk about the power of building meaningful relationships. He is the founder of Friends in Real Estate, a commercial real estate networking group committed to getting to the fun part of networking without all the fluff. He takes us through how he has grown the group to over 600 people and how they are taking a different approach to networking.

Randy is also an associate at Dominus Commercial and he has a strong experience in underwriting with over $1 Billion+ of real estate underwritten and $100 Million+ worth of transactions. He shares with us his insights on retail and industrial real estate, particularly in the Dallas Fort Worth market.

[00:01 - 04:00] It's a Relationship Business

• Randy on how he ended up in real estate by accident
• One of the biggest lessons in his career is that the big deals take as much time and effort as the small deals
• He was able to grow fast in real estate because he met, talked to, and learned from as many people as he could

[04:01 - 13:20] Dallas Fort Worth: Retail and Industrial Market Breakdown

• Retail has been severely affected by the pandemic and he believes that there will be a consolidation in terms of tenant mix

• Industrial continues to be a hot asset and there is a lot of demand in DFW
• To find opportunities, you need to understand the buyer market pool
• He recommends Class B and C properties in retail because more distressed assets have more flexibility

[13:21 - 19:24] Making Friends in Real Estate

• Randy has always been put off by the membership payments for networking groups or events

• He started inviting his friends to hang out and his friends invited their friends and so on
• Friends in Real Estate turned into something that has been a membership group without all of the professional orientation of most membership groups
• They value the personal connections and fun aspect of it
• Randy's advice to anyone who wants to create their own group: Start small
• What's next for Friends in Real Estate?

[19:25 - 21:01] Closing Segment

• Reach out to Randy!
• Links Below

• Final Words

Tweetable Quotes

"You need to make sure you're meeting as many people as you can and just asking as many questions as you possibly can." - Randy Streig

"I would tell them to start small. Don't think about where you wanted to end up. Just let things unfold naturally and try to just invite people you think would get along well together." - Randy Streig

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Want to read the full show notes of the episode? Check it out below:

[00:00:00] Randy Streig: it's really understanding the market from a buyer pool perspective, figuring out what exactly you would want to buy as an investor in comparison to what everyone else is buying because the least competitive class is going to be the one where you're going to be most successful in, as compared to the private equity groups of the world who know what their fairway is and know how to close a deal and are, you know, I can go to a seller and say, Hey, my guys can send you an offer and we can close in 30 days. And we're confident about doing that.

[00:00:26] Sam Wilson: Randy Streig is a commercial real estate broker at Dominus Commercial in Dallas, Texas. He's also the founder of Friends in Real Estate, a free to join and participate happy hour group with close to 600 members. Randy, welcome to the show.

[00:00:51] Randy Streig: Thanks for having me. I'm glad to be here.

[00:00:53] Sam Wilson: Hey man, the pleasure's mine. Randy, there are three questions I ask every guest who comes on the show: in 90 seconds or less, can you tell me where did you start? Where are you now, and how did you get there?

[00:01:02] Randy Streig: Yeah, so fell into commercial real estate by accident. Went to school originally for music, decided within my first semester that music wasn't going to end up paying the bills. And took random principles of real estate class at University of North Texas with John Bain, who ended up becoming a mentor and friend of mine, ended up running the real estate club there. From there did a case study project for ICSC, we took second place, our group mentor, Whitesman took me on as a full-time financial analyst, one of three guys for a billion and a half dollars retail portfolio, which was super fun. From there, went to work for 42 Real Estate who do a lot of FedEx ground build the soup projects, a bid on half a billion dollars of FedEx field issue projects, underwrote a hundred million dollars of portfolio acquisitions and a mid-rise acquisition here in Dallas. From there, went to a private firm. I can't publicly talk about, but it was a nice opportunity, but not where I ended up needed to be and kind of fell in here at Dominus, where I've been here for two and a half years now doing brokerage. So started with development, ended up here in brokerage and I'm loving it.

[00:02:06] Sam Wilson: That's impressive. Like, that's a lot of moving pieces. When you look back on that, what are some of the key maybe pieces of the puzzle that you learned along the way that you're using today in your brokerage business?

[00:02:18] Randy Streig: The biggest thing is that even the small deals, well, a better way to say it is the big deals take as much time and effort as the small deals and usually ends up taking less time. So if you can learn the fundamentals, the rest is easy and falls into place.

[00:02:35] Sam Wilson: That's very interesting. You even say that from the brokerage side. For you guys, it's just as much work to do as small deal as it is to do a big one.

[00:02:43] Randy Streig: Yeah. Well, yeah. I'd say even more work to do a small deal than a big deal.

[00:02:47] Sam Wilson: Wow. What do you tell people? I mean, you know, you guys have a membership group there with 600 people in it. What do you tell people when they're, you know, I'm sure you get lots of, you know, people interested in real estate, you know, just getting started out. What do you tell 'em on that front? You just say, Hey, go big as fast as you can. And then if you do that, what steps do you tell 'em to take?

[00:03:07] Randy Streig: Really, I tell them it's a relationship business. You need to make sure you're meeting as many people as you can and just asking as many questions as you possibly can. One of the things I really took to heart when I was still at UNT, my high professor said, Look, you need to eat when you get out of school. That's the first thing, and you can kind of figure everything out later. When I was starting as an analyst, as kind of getting my feet wet, I was still networking around 12 to 15 times a week. I usually had a coffee, lunch, and happy hour set up every day and just meeting as many people as I could, talking to as many people as I could, trying to learn as much as I could, as fast as I could while I still had the energy to do it.

[00:03:48] Sam Wilson: Right. Yeah. I think if you asked me to add 12-15 appointments to my calendar right now, every week, I just say that's not going to happen. There's just nothing. So I love the caveat there when I had the energy to do it. So you've gone into brokerage, you are now focusing on, what are you focusing on the brokerage side? You said it was retail and...

[00:04:08] Randy Streig: Yeah, owner rep, and tenant rep.

[00:04:10] Sam Wilson: Okay, and in what categories? Is that retail, industrial, or?

[00:04:14] Randy Streig: Yeah, Retail and industrial.

[00:04:15] Sam Wilson: Got it. Okay. Cool. That's a lot of fun. One of those is a hot asset class or has been the darling child for the last few years. And one of those has, you know, had some mixed reviews on it, depending on who you talk to. Some are like, Hey, man, retail's doing alive and well, just, you're not seeing it. Give me the kind of market breakdown, if you will, on those two asset classes and what your current view of where they are now and maybe where you see 'em going in the short term.

[00:04:42] Randy Streig: Yeah, well, you know when I started, I started at a retail shop and the big narrative at that time was, you know, retail is dying. It's all over from here. And while that's true with things like malls, it's definitely not the case for a lot of the bigger retailers. And by bigger, I mean national chains and franchises. A lot of the mom and pops have been hurt severely by inflation and just what's gone on with coronavirus and all that jazz. I mean, that's been really sad to see. You know, I just closed a deal with a luxury fitness client of mine out in Plano, and they're still wanting to grow rapidly and I'm seeing another couple Fortune 300 and 500 companies that been talking to for some lease deals, and they're still growing as fast as they can. So I think retail is going to consolidate in terms of the tenant mix that's expanding. So it's not going to be as diverse of a tenant mix that is growing. But the tenants that are growing are just going to kind of rocket ship, kind of using that parade distribution principle. So 20% of the retailers are going to have 80% of the growth across retail. And then for the industrial side, in Dallas Fort Worth specifically, it's going to continue to be hot. I mean, everybody's still wanting to come here to Texas and you're seeing like, you know, Elon Musk is coming here, even had Joe Rogan coming here. So we're building a big both entertainment and business-oriented culture out here, which is really interesting to see, especially 'cause I grew up in a town where the only grocery store was a Dell Diamond, if anyone even knows what that is. And then now in the same intersection you have a Walmart, an Albertsons, and a Kroger with AGB that owns a site just down the street. So DFW is going to keep growing rapidly across retail as far as I can tell, because another function of DFW and Texas, in general, is how much space there is geographically speaking. There's a lot of room to grow outwardly, and we still have Dallas Fort Worth International Airport, which is I think the number two or number one busiest airport in the US right now. You have still space to grow in there in line as far as industrial goes. The last time I checked there was 3 million square feet of industrial going up right now, going vertical and the demand to fill it. So I think the DFW is a great spot to be right now.

[00:07:00] Sam Wilson: How does someone find opportunity? Let's say they're not in the kind of know on these deals that are getting traded. How does someone find and develop opportunity in industrial today?

[00:07:13] Randy Streig: From a development side or from a user side? Or what side do you want to talk about?

[00:07:18] Sam Wilson: I'm thinking like if I came to you as an investor and I said, Hey, Randy, I've got, you know, I've got a pile of money, I'd like to invest in industrial, or I've got a backing with a bunch of investors. We really want to start investing in industrial. Where do they start?

[00:07:32] Randy Streig: That's a good question. I would say you just look for the least competitive asset class right now and understanding who the other investors that are buying 'cause you have the Blackstones of the world that are kind of pulling back right now just because they want to see where interest rates are going to fall out to. And then you have, I'm working with a couple of private equity groups who we're still extremely bullish. They've got their investors lined up, but most of those groups have a very specific fairway they want to run down. So it's really understanding the market from a buyer pool perspective, figuring out what exactly you would want to buy as an investor in comparison to what everyone else is buying because the least competitive class is going to be the one where you're going to be most successful in, as compared to the private equity groups of the world who know what their fairway is and know how to close a deal and are, you know, I can go to a a seller and say, Hey, my guys can send you an offer and we can close in 30 days. And we're confident about doing that.

[00:08:24] Sam Wilson: Right. Right. And that if you're bating or playing in those leagues that, you know, it can be very challenging. So I like your idea of finding the least competitive avenue inside of maybe industrial and saying, okay, how do I get in here and make this a compelling investment thesis? That's really interesting. What do you see on the retail side of things? You know, is there, what would you say is the ideal buy box right now if, say, returns were our primary objective?

[00:08:50] Randy Streig: I would try to stay in that the class B, class C. I mean, class A is always going to be class A. It's in the sense that your returns are always just going to be set by what the new development standard is. So with Class B and class C, though, you have more opportunity in the sense of you can redevelop it, you can you know, just improve the asset altogether. But I mean, I know some, a couple of groups that are looking at turning malls, like into industrial hubs. So just in the more distressed asset classes, you have a lot more flexibility because usually the retail is well positioned just from a geographical standpoint. And real estate is always about where you buy, how good is the land.

[00:09:30] Sam Wilson: Absolutely. Can you give me maybe quick definitions of A, B and C type of retail maybe? Define those classes broadly if you could.

[00:09:39] Randy Streig: Yeah, yeah. For a class A center I'm going to refer to retail specifically and not a mixed-use property. So retail specific, you're looking at a grocery-anchored center right now. Something with like a Kroger or AGB. If you're an investor and you actually own the grocery box, it's even better, but it's kind of unlikely right now. Most of the groceries like to own their own box. You want to have not too many big box retailers at the moment because their junior box faces are a little hard to lease up. So I would kind of classify those, more junior box-oriented power centers as the Class B retail strips right now or retail centers. And then class C is going to be anything where the building just looks a little dilapidated, maybe it was built in the eighties and no one's really put a lot of money into it, a lot of deferred maintenance. That's kind of the quick, quick scale that I look at.

[00:10:26] Sam Wilson: Right. And you see opportunity right now in that B slash C. And that's really where we should be looking if it's like, Hey, I want to find opportunity and you think that's a great spot in retail.

[00:10:36] Randy Streig: Yeah, I mean, there's more risk entailed and when there's more risk, there's more opportunity.

[00:10:40] Sam Wilson: For sure, for sure. You know, but it's interesting. You know, I think about some of those places. There's some spots here that come to mind, you know, where they may have, like, and it's not last mile per se, but just maybe to get our listeners' wheels turning, you know, I'm thinking about like, you know, a hair studio or a laundromat or, you know, there's one place down here. It's a Mexican ice cream store. And it's like, okay, you know, it's like all these little shops that go in there. Maybe the risk is there, 'cause of course, they can pack up and leave in two days and it's like, well now you're high and dry as the owner, but yet at the same time, that's stuff that's just, you can't Amazon to your front door, so.

[00:11:14] Randy Streig: Right, right. Well, and another thing to think about too, and I'm going to reference the case study from my time at 42 Real Estate, the guys who, when they redeveloped Deep Ellum. You know, Deep Ellum was, it's a little crime oriented now, but at the time it was very crime oriented. But there was a lot of art. It was a very artist-centric hub. And when there's art, it tends to draw in a lot of people especially the creatives and the hipsters. And there's a joke somewhere that like, you know, the fourth horseman of gentrification is Whole Foods, but there's no whole foods there yet. But when you look at something like Deep Ellum, you look at a neighborhood that might typically scare away of a lot of investors because of crime, but where there's art, it'll draw in more people. And there's a lot of interest in bringing in new or people that want to revitalize the area. What made me think of that was you referencing the local stores, the mom and pop guys that are kind of local, not necessarily the big Main&Main retail strip, but somewhere in an urban area that has a local-oriented draw to it. So there's a lot of opportunity there too, if you can find it.

[00:12:16] Sam Wilson: Right. Right. Yeah, absolutely. And I think especially when you see those old kind of more dilapidated buildings, that's where the market I would say is probably, I'm guessing here, correct me if I'm wrong, but that's where the market is still fragmented 'cause you still have single owner, you know, mom and pop, maybe they've owned it for decades, things like that. I would guess that's one of the last pieces in retail. That's still kind of where opportunity really would would lie and of course, risk as well.

[00:12:40] Randy Streig: Yeah. Well, and to that point, Deep Ellum was owned a lot by those mom and pop guys, but Scott Rohrman over 42, went and met with each of these owners individually and slowly, like, gained their confidence and trust over time that he could do something cool with the neighborhood and then ended up closing on 50 different parcels at once that were I think owned by 40 or so different owners.

[00:12:58] Sam Wilson: Wow. That's a story in and of itself, which I would want time for, but I'd love to hear how someone strategically goes about packaging up 50 parcels with 50 owners and then closing all in one single go. I think that's a work of, yeah, that's a work of art in and of itself, figuring out how to do that and keep everybody on board. So yeah, that's very, very cool. I love that. You know, I want to take a little bit of time here and talk about your Friends in Real Estate group. I know you had mentioned early on that it was something that it was kind of accidental. Most people, especially in the syndication side of things, and as you probably are well aware of this, but we're all trying to always grow our network, especially when it comes to people interested in real estate looking to invest in real estate. You've grown a group of over 600 people accidentally. What are some you did on accident that worked and then tell us a little bit about the group overall if you don't mind?

[00:13:51] Randy Streig: Yeah, yeah. So I kind of got this notion when I was reading Never Eat Alone by Keith Ferrazzi and just kind of seeing the importance of networking, generally speaking. And when I got into commercial real estate, I joined the big networking groups out here, but I was always kind of put off in the sense that you have to pay a membership fee just so you can go to an event where you're paying another dollar fee to go to the event so you can meet two or three people to go have a drink with them or lunch. And I was, like, there's got to be a better way to do this. And so what I did was I just started inviting a group of my buddies out to drinks once a month. So I texted some friends that I already knew in the industry that I had met through some of those networking groups, and I said, Hey guys, let's go grab a drink altogether. And we had eight people come out to a bar out here in Dallas and we just, you know, shot the breeze and talked to each other and had a good time. And I was like, all right, well cool, you guys want to do this again next month? Why don't you invite a buddy of yours and, see if they want to come. And then it grew from that day to 12 or 15 the next time and then 20 the month after that and then three months later it was at 30. And within eight months I had somebody come to me and say like, Hey, we'd love to sponsor this event and host it at our office. And I was like, Okay. Sure. And by that time people had been, people that had attended said, Hey, add my friend so and so to the invite list. And by the time we had our first sponsored event, we had 50 or 60 people come out to the event. And after that I had people start lining up to offer to host the event and sponsor it. And they're adding people to the list, their friends are adding people to the list. And so just kept growing and growing and I was really trying to meet with every new person that would get involved with the list or get on the invite list just to try and make it a more personal connection there. And it's kind of grown outside of my ability to reach everyone. But I still try to at least catch up with as many people as I can. So the reason I started thinking even about having this monthly event was I started meeting so many people where I couldn't keep in touch with everybody on a one-on-one basis, but I saw it as an opportunity to at least, you know, have a touchpoint once a month with all these people, even if it's just me sending an invite out to a happy hour. Plus, it gave me an opportunity to offer something to people I wouldn't normally be able to offer them in the sense of like, Well, I may not be able to offer you anything from a service standpoint, but I can introduce you to somebody. And I looked at this happy hour group as a way like, Oh, you're in this field? Well, meet so and so, they're kind of doing a similar thing and this can help you out. And you know, I met banker buddies who made a bunch of deals off of it and got to sit court-sided the Mavs as a thank you, which was super cool. And I've met other people that are getting deals done, which is really exciting for me just to see Friends in Real Estate turn into something that has been a membership group without all of the necessary professional orientation of most membership groups and that we're still just a happy hour group to come hang out and make friends. We're not there to advance our business necessarily, speaking of business comes out of it great, but we're more focused on building the relationship first and if whatever business comes of it comes of it and it's just kind of happened naturally and or, and organically. To kind of reference what I mentioned earlier and seeing the necessity of building a relationship network in real estate because it is such a relationship-based business. So I figured if I can build my relationships with people and help other people build their relationships, then it'll kind of, you know, just grow out of there. And it's been a wild journey in the last five years that I've been doing it.

[00:17:34] Sam Wilson: I'm sure, I'm absolutely sure. And then, you know, you get to kind of position yourself as the thought leader in the group as well, which I think is always a great spot to be in. Maybe you don't know everything, but still it's the person that organizes it is the one that kind of gets the front row to the whole thing. That's really cool. I love that. What advice would you give to somebody if they were going to launch, and I don't want to use the word meetup, but I guess I just did, a meetup or a group like this? What would you tell them to do?

[00:18:03] Randy Streig: I would tell them to start small. Don't think about where you wanted to end up. Just let things unfold naturally and try to just invite people you think would get along well together. That's the biggest thing. And one of the things I'm really grateful for about Friends in Real Estate is there's a culture that's kind of created itself, and it's something I'm happy has developed because it's a bunch of people that share an interest in just the enjoyment of friendship and that has attracted more people of similar mindsets, and that's how it's grown from there.

[00:18:37] Sam Wilson: That's awesome. That's awesome, man. I think that's really, really cool. What are your hopes long term for the group is they're like, Hey, you know, we're going to plan I mean, are there kind of bucket list items that you think about as it pertains to Friends in Real Estate?

[00:18:52] Randy Streig: We had looked at doing a bigger event this past year, but realized it just didn't have the bandwidth to actually like put it all together, which was no big deal. You know, kind of wish I had thought a little bit more about the amount of effort he would've taken to put on that event. So would like to kind of put together a bigger event maybe later down the road at some point and as dumb as it sounds, I really want to make merch because I've always wanted to just sell merch. I think it'd be fun.

[00:19:19] Sam Wilson: I love that. No, I think that's great. You'll have to put me on the buyer's list when you get your merch. I'll wear on the next show. So let me know when you get that done. Randy, this has been awesome. I've certainly enjoyed learning from you about the opportunities in retail. I think that's actually been a very fascinating conversation then you know, what you're seeing going on in the industrial side of things you've told us about friends in real estate, what it's been like to kind of launch and maintain that large of a meetup group. I mean, that's a lot of, I mean, how many people show up on average? I mean, you might have a 600-number role.

[00:19:52] Randy Streig: Yeah, I think 50 is kind of the set. Yeah.

[00:19:55] Sam Wilson: Okay. Right. But even 50 people descending on one bar or one location is still, I mean, it's still a lot of people, if they're not prepared for it. So it sounds like that figured out as well. But no, I think that's really absolutely great. Thank you for taking the time to come on the show today. If our listeners want to get in touch with you or learn more about you or any of the assets maybe that you are brokering right now, what is the best way to do that?

[00:20:19] Randy Streig: Our website's still in the works, so I would say just check us out on LinkedIn. That's the best way to keep in touch at Dominus Commercial on LinkedIn. You can find me on LinkedIn, Randy Steig, and then Friends in Real Estate as well. It's all there.

[00:20:31] Sam Wilson: Fantastic. Randy, thank you again. Certainly appreciate it.

[00:20:34] Randy Streig: Oh, thank you for having me. It's been fun.