Speaker 1: 0:48

no-transcript, the fun stuff. But, dennis, thanks for joining me today. Buddy, my pleasure. So let's start off. I think it's going to be important to kind of give everybody an understanding of your past so people can kind of see the yellow brick road for our future. So let's talk a little bit about your very beginning in the construction world, but also when you got into it and your age, please.

Speaker 2: 1:14

Yeah, I was very young. I grew up in a concrete family, so it was plenty of labor. I was the kid out there, you know, cleaning forms and digging ditches and doing all the things that every kid does. That's part of the family and so that gave me my first sense of work ethic.

Speaker 2: 1:32

You know how hard you have to work to get where you need to go, and I remember a time when I was doing that going geez, this is pretty hard on the bod. I don't know how many years I can actually put into this. I'm finishing concrete with guys that are 60 years old and I'm looking at them going ah, they're torn up. Where was this? This was back in Grand Junction, colorado, and then in Phoenix, arizona, back in the early 80s.

Speaker 1: 1:52

So you went from cooler weather to really hot weather.

Speaker 2: 1:54

Yeah, really hot weather and horrible winters where you have to cover everything every night, to hot hot weather where you're praying that the concrete survives the heat.

Speaker 1: 2:02

Yeah, Now let's talk about kind of the process for construction here, because that's something I always kind of talk about, especially when people are pouring here. You guys are popping up lights at 1.30 in the morning and you're starting to pour just simply because it's so hot here.

Speaker 2: 2:17

ACI, which is the American Concrete Institute, has very strict guidelines on concrete placement and one of those is temperature, ambient temperatures and the heat of concrete, the heat of hydration, how fast that happens when the ambient temperature really starts rising. It is so hot here we actually exceed all the deltas for that. There is no time of the year here, in the summer at least, when you can actually place concrete and stay in that standard. So we have to exercise everything we can do to keep the temps down places, uh, places as quickly as we can and get finished out as quickly as we can.

Speaker 1: 2:53

Before we're we're losing the whole yeah, because once that sun comes up and it starts getting even hotter it it.

Speaker 1: 2:58

It is not only almost impossible to keep up with, but the concrete itself really does suffer yeah, and not only that, your finisher, your labor, I mean, depends on what you're pouring, how much ground you got to cover, you know how much uh labor you have at that time to be able to, you know, finish whatever slab you just poured, or whatever exactly, and so, uh, your labor demand goes up and you're also beating your guys up pretty hard.

Speaker 2: 3:20

uh, it's one thing to just have hard work, it's another to be exhausted.

Speaker 1: 3:26

We're watching that all the time, and let's talk about what happened last year. You know, when it was so hot last year, what happened here at Paradise?

Speaker 2: 3:31

The first year we had to actually shut the job down about one o'clock every afternoon. We had guys getting heat stroke, you know, basically thrown up on the job, not getting dizzy, you know, not feeling. Well, we can't handle that. That's not an environment we're gonna let people work in, yep. So we had to just kind of shut the job down early. You can start as early as you wanted in the morning. We're out here in the middle of the world so we can do that um, uh, two, three o'clock in the morning. It's not unusual to have the electricians out there with lights.

Speaker 1: 3:56

It's interesting and that's what's nice about us being in the commercial space, right, because if we were in the, if we're in residential communities, we we wouldn't be able to, you know, pour in the middle because you have noise violations and so forth.

Speaker 1: 4:06

So we're we're blessed to be able to be in the commercial world, which, which is a big component for a lot of investors and developers to consider, especially the location, given the environment, along with the labor force, and when timelines, all of that has a direct effect and cost, and so on and so forth.

Speaker 2: 4:22

Yeah, every area has its challenges. I mean, if you go down to Texas, you've got rain, rain, rain, rain. You go to Colorado, you have the harsh winters. Here it's just heat, and that is one of the most difficult things with concrete. The heat of hydration actually promotes that initial set much earlier than you want. You need time to work it, you just don't get the time.

Speaker 1: 4:43

All right, so let's move from concrete to what was the next step in your career?

Speaker 2: 4:46

Well, I went into quality control. I was very blessed to work with some of the best engineering minds out there at a company called Western Technologies. They gave me an education in the concrete, asphalt, soils, structural steel, masonry all the sciences that I never would have gotten any other way. I cannot tell you how important that has been in my life, not only to understand the science of what we do, why we do what we do, but to have that background where I can then teach others why they do.

Speaker 1: 5:18

You know one of the most important things and I think we're. You know more of the sophisticated, let's say, outfits, firms, developers and contractors. They know the majority of the risk is in the horizontal work, yeah, which starts with your engineering moving dirt. You know how much it's going to cost to move dirt, what's under that. You know underground pulling utilities, asphalt, all those horizontals really kind of was what makes your deal. It's easy to kind of do your calculations going vertical. It's the horizontals where the majority of risk is, yeah.

Speaker 2: 5:46

We talk about that all the time. Getting out of the hole is the most difficult process of a project. Design is time. It's just time, time, time. But actually doing the construction, getting out of the hole that's where you are past your horizontals and now you're going vertical it's the most difficult time on the project.

Speaker 1: 6:07

Now to have a background like yours. Of course you're going to be a little biased in answering this question, but how important is it that? How much? How important do you believe it is to have a contractor that has that type of experience working with a developer like us that's looking at it from a space of you know? We are looking at scaling and mass sizes we're doing we're probably the larger of the commercial developers here in town and how important do you believe it is to have that type of skillset as a contractor from the beginning stages? Simply because we're not doing value add deals, we're doing ground up construction. You know entitlements, planning, buying land and then taking it from there. How much do you think that has played a part in assisting our design team?

Speaker 2: 6:48

it cannot be overstated enough that the quality of your subs, the mindset that they have, their ability to kind of scale with us, keep on schedule. It's the most important aspect of choosing the right people. You can always get a cheaper bid. You can almost always get somebody that'll say I'm going to do quicker, faster, cheaper, that those people are everywhere Actually. Um, partnering with subcontractors that can actually pull it off and do it safely, with quality standards that are high enough for us and keep on schedule, that's worth what we paid them.

Speaker 1: 7:29

That's totally worth it. But I'm saying the upfront planning and stages. To have your background and like the engineering side, how much of a part do you think that plays in the design?

Speaker 2: 7:42

Well, I think it gets the confidence of the designers that we can have a great conversation right off the bat about hard topics which way to go with foundation design, which way to go with bearing capacity, which way to go with if structural steel or masonry or structural concrete is a better fit for a wall. Um, it's not just understanding the materials but understanding the environment that you're working in. So here we're sands and gravels, right. We don't hold vertical walls very well at all. Osha doesn't even allow it. So there are some types of construction that just isn't suited for our region. I'm blessed to have been in this region for about 30 years, 35 years now, and I know it in and out, so it helps a lot.

Speaker 1: 8:20

All right, I'm going to drag it out of you because you're too damn humble, okay? So let's talk about your real experience. Okay, how many airports and runways and um taxiways have you been involved in? Uh?

Speaker 2: 8:34

I a lot. Okay, I've worked on every major airport in arizona um las vegas. Uh, a lot.

Speaker 1: 8:43

Okay. So, with that said, would you agree that that type of engineering work foundation prep is probably the most difficult in the world, separate to?

Speaker 2: 8:53

a high rise kind of thing it is. It's it's a real challenge, because I mean, that's where everything starts. You get out of the hole properly. Everything else just follows. It's easy after that.

Speaker 1: 9:02

So when we were talking to the airport out here about expanding the taxiway from a private space, what were you saying in regards to, uh, the grade of the fall, the way that asphalt has to be prepared given the heat yeah, now let's talk about if we were going to pour, let's say, big man cave, you know airplane hangers, yeah, and there's obviously asphalt that goes up to that slab. What were you talking about? The way that asphalt had to be basically prepped, poured designed.

Speaker 2: 9:30

So FAA has a really high standard for asphalt and concrete, subgrade soils, all that kind of thing. And it's not just a high standard, it's a very tight, tight standard. So we don't have a lot of asphalt suppliers or concrete suppliers that can actually meet the spec. They have a structural and a non-structural standard. So your non-structural standard is for everything that's outside of that fa controlled area and it is treated very, very differently. When I, when we found out that this was a possibility that we could get into that project, my mind started spinning. Firstly, who can we get as material suppliers that can eat that demand? So I reached out to them and and, uh, the answer was pretty much look, uh, we can do it, but everybody's got to be involved.

Speaker 1: 10:13

It's a it's a very difficult thing now the they were talking about it was a two percent grade. We can't fall from the yeah the actual runway, runway down to get all the way down to whatever locate. Otherwise the fa, the FAA probably won't in essence inherit that as a cost to maintain that side right.

Speaker 2: 10:31

Not only that, it's a safety standard. You don't want planes going down really steep grades. They're not like automobiles. They don't have the same capacity to turn quickly and brake hard that kind of thing. They have their ability to control themselves. But the grade is super important to keep it as level as possible.

Speaker 1: 10:48

All right, so we'll keep going so from Western Tech. What was your role at Western Tech?

Speaker 2: 10:53

So I started out in Western Tech as a technician, learning the ropes of the science of materials testing and inspections engineering, and then moved my way all the way up to a principal director. It took 25 years to do that. The education was invaluable. I worked with just some of the greatest minds Dr Rosner, who was head of the geotechnical department at ASU. Randy Marwig, one of the finest scientists in geotechnical engineering. Raphael Tix, our world-renowned cement expert. Brian Castles that's on the ACI committee. Some of these guys. Phil Felice, who just recently passed, a great man and one of the best minds in asphalt in Arizona. Arizona is a very unique place for asphalt. Our UV day those hours of UV, is so critical to understand how it works with asphalt and how quickly basically all the volatiles burn off.

Speaker 1: 11:53

Yeah.

Speaker 2: 11:53

And so you're left with sand and gravel All over the world. They look at Arizona as a place that they can kind of use the same technology that we use here. Wow, I did not know, that yeah, China, Saudi Arabia.

Speaker 1: 12:10

Really. Yeah, it's's me. They look at arizona as a data source to yeah, holy jeez. Yeah, I didn't, I never know that I didn't know that at all. Very interesting, I could see that this is so damn hot here yeah, it's really hot and we have what three three was it? Was it like uh, three inches of rain total in a year here in havasu? Something of that nature?

Speaker 1: 12:22

western tech was doing mixed designs for china at one point I can see that you know and a lot of the guys. I actually had some friends I graduated high school with that ended up going to dubai and was working on the burj khalifa and a couple other big projects out there.

Speaker 2: 12:35

It's ironic well, it's not, but I it's ironic that they were reaching out to us for engineering and design and labor at one point yeah, I mean I think it's like any progressive state or country, I mean they're going to look to other countries who've already kind of invented the wheel and see how that's done best. Yeah, arizona just happens to be one of those places in the world where it kind of works.

Speaker 1: 12:57

And so we're going to go into labor here in a second. All right, so from Western technology, where'd you end up going there after that?

Speaker 2: 13:02

Well, my wife at the time got me into real estate and what a great experience that was and I never really got out of development. I never really got out of consulting. I continued to do that through the 10 years I was really working in real estate with her Very successful, very good opportunity to actually kind of shift gears into the development and construction phase of my life. I got my general contractor's license somewhere in that 10-year period and then started actually trying to get some projects. I didn't have to work hard to do it. So many people are just looking for somebody that really is knowledgeable and answers the phone and gives them a good understanding of how to build something and that just kind of eat into development.

Speaker 1: 13:51

Yep and that, and then you and I met on a golf course.

Speaker 2: 13:54

We met on a golf course as the best of all stories start.

Speaker 1: 13:57

And I don't even think we talked business.

Speaker 2: 13:59

No, we talked. We talked personal lives yeah.

Speaker 1: 14:01

And then we were, and then, I think, eric told me hey, if you need a contractor, you know, consider dennis yeah and I remember I was taught, I think you and I had one conversation. I think we did like a three-way call with him about it and then, I think you know, six months later I reached out to you yeah, no, it was awesome.

Speaker 2: 14:17

Um, you know, sometimes you connect with somebody on a level that you just didn't expect and I think we I mean it was uh, I like to say love at first sight. I mean we literally just connected yeah and, uh, you called me up. It was like we were still on the golf course. We just picked up the conversation, said hey, you want to do this yeah let's do it right now.

Speaker 1: 14:37

We are where we are today we're doing all right.

Speaker 1: 14:39

So let's talk a little bit about um, let's talk about the four projects that we have going on here now. Paradigm storage you kind of stepped in and I, I would. I would kind of lead to say that you know, cleaning up after another contractor is usually kind of the hardest part. It's difficult, you know. Obviously I cut my teeth in it. Having to be in the lending space taking back properties that are mid construction, that you know someone may have stopped making payments on. That's when you kind of start looking behind the curtains, if you will, and see the kind of shortcuts were in place and just how bad sometimes these contractors just try to make their money and get out. So really the idea is something this size as far as paradigm storage, for you to slide in and try to make up or find out what was missing on such a big project as it was and then take it from there was impressive, but it did take a little bit of time to kind of get our wheels moving and then now we're off and running for sure.

Speaker 1: 15:30

But Paradigm Stories talk a little bit about just simply the method to our madness right, how many phases we have. What's our next building that we're delivering, talk about building G in that wall, talk about the man cage, and then we'll talk about the desirability of that. We'll shift over to uh boathouse, because we're obviously dropping uh, uh buildings today. Yeah, that's really cool, and we're gonna be pouring another slab here pretty soon, and then we'll talk about uh dover, our family office, uh society building and our new headquarters, which is really exciting. We're I mean, dude, we'll hopefully we'll be done by the end of the year. Yeah, um, I want to be in there for christmas, so hopefully you can get us in there for christmas.

Speaker 2: 16:01

We're definitely going to be in there for Christmas, so hopefully you can get us in there for our Christmas party. I think we are definitely going to be in there. I don't have no doubt about it.

Speaker 1: 16:07

And then we have barn caves and the gym, which is like a whole other conversation. So let's just talk about paradigm storage right now. Let's talk about how many phases we have, the sear size of it, just so our audience can hear about how involved obviously you are. But they they hear from me all the time talk about it. So I want you to kind of share a little bit about your thoughts on overall paradigm storage, the desirability, why we're selling them as fast as we are compared to other projects, uh, but obviously the, the project overall, yeah, uh, you're right, I'm stepping into a mess like we had is difficult.

Speaker 2: 16:36

Fortunately you already had some really good people in place. They just weren't very organized. So we got those people to kind of explain to us exactly where we were at. Um started looking at the project, re-phased it because the phasing was really off and uh just started picking up the pieces. Or building c was the first building that we completed together and it was tough, very, very difficult, I mean. I like to say we don't. We jumped into a dumpster fire and we had it pretty much extinguished by Building C and by D. We were trucking along again, but very difficult. But the quality of these builds is really where it stands out. Storage in the United States has always just been kind of a tin. Can you get a door of some sort on it?

Speaker 2: 17:20

and it just kind of secures your stuff. This is a completely different level. I would say it's a luxury storage unit, so it not only has great appeal, just curb appeal. I mean it's a beautiful, complex, but each one of those units is super nice. I mean it's as good as any garage attached to your house. It's insulated, has air conditioning, has plenty of electricity. Most of them have plumbing of some sort. It's as good as anything that's attached to your house. So I'm proud of the product we have. We continue to learn to make it better and better and better.

Speaker 1: 18:00

And our subs, who have been instrumental in helping us get the quality standard up, just continue to perform at a better level. Would you consider us being probably the top performer in the storage space here?

Speaker 2: 18:05

Well, I think so. You know, I never want to discount the chance that somebody else can come in and do it bigger, faster. Sure, that's always a possibility. But I mean, I think we've shown ourselves, not only to the city but we've shown ourselves to other contracting groups and to the city of Lake Havasu, that we are people that do what we say. We're going to do it well and we get the job done.

Speaker 1: 18:30

Do you think we started the new standard of the way to?

Speaker 2: 18:33

build these, it's obvious. I mean, in the retail space of real estate I sold a lot of storage, a lot of storage Now and before that in my consulting career. I did a lot of storage with lot of storage now, and before that in my consulting career, I did a lot of storage with other contractors. So I know what they're built out, I know how they're built and, um, ours is just a whole nother level. So, yes, I think if you're going to compete in this space at this point, you're going to have to follow yeah, follow suit, and I'm seeing other competitors are actually literally looks exactly like the inside of our units.

Speaker 1: 19:04

Yeah, it's, which is, which is nice, because what that means is that we're on the right track. I'm seeing other competitors are actually literally looks exactly like the inside of our units. Yeah, yeah, it's which is, which is nice, cause what that means is that we're on the right track. That's my takeaway. It's what people want, yeah, and I, and I always tell my, I tell everybody. You know my competitors, if we're doing something, they're doing it right. We're all seeing it. So many people that want these units. You really couldn't build enough.

Speaker 2: 19:23

No, and we all grew up in homes and our youth that were basically just studded, they weren't drywall, they weren't insulated. None of those garages looked that way. And then suddenly you saw an insulated and drywall garage. You're like what is this? You know this is how these have progressed. They have just gone to the highest level you can actually take it with with a steel building. I suppose we could go a couple more levels up, but I mean, at some point you're just like it's still building. This is a best that can really done with that.

Speaker 2: 19:49

You know, it's really really quality standard.

Speaker 1: 19:51

I was interviewed by invest Nashville so I'll have a second publication with them and the reason why they called me back for the second round was because they were so intrigued by the a way that we're moving these units and then how this was, in essence, a footprint of the barn caves and how a big part of the desirability for this and a lot of our questions that people want to stay in these things and live in these things is what made us slide into the design of the barn caves. And then when you look at the data like I just talked about this on the last podcast about Goldman just opened up a $500 million fund for takeout long-term financing for operators for self-storage but more boat and RV storage. So that just kind of tells you look, if that's the trend and the data supports it, and you have a big institution that's now supporting the asset class and giving you finance options I mean that's impressive. And the interest rates are. First of all, interest rates are coming down. You probably saw that they're going to end up coming down and starting September and I would like to think they will. Um, but uh, the commercial uh, uh, mortgage backed security costs has come down significantly in the last three weeks. So you know, we're seeing. You know, besides 8.8, uh, leverage. You're going to 6.6 now, leverage on commercial assets, when then, obviously, goldman launches that fund. So you're like, okay, they're getting, they're getting ready for that huge shift of boomers and multi-generational now, as far as boats and RV ownership and how.

Speaker 1: 21:16

That's a trend you can watch. You can watch spending habits, you can watch what the baby boomers are doing, you can see where they're moving, you can see what they're focused on, healthcare, what have you right? So it's not rocket science, no, and that's why it's so easy to collect the data. Yep, you know. And. And then you look at this type of stuff where the guys are building like the car caves. So, going back to the interview, they were talking about these guys that they're interviewing as well. That did car caves in, like tampa, florida and all the and. So they're the, the concrete walls, and but they're selling these things for 800,000, a million dollars.

Speaker 1: 21:43

And that's a great demographic. That's its own niche. You know that's higher net worth clients that you're shooting for that are really going to spend a million dollars on a, on a, on a box. Basically, that's fine, I'm not, there's nothing wrong with that. But our model is to go in there and pump these out into a lot more locations.

Speaker 1: 21:58

And I would like to think, if you're wearing a uh, an institutional hat, affordability is always important to hover around. You can never go wrong with affordability, you know. And so I think for us to be able to, you know, build these and then sell them for 300 grand or under 300 grand. Some of them are $120,000, you know that's a big deal. I mean, the entry point's low enough to consider. Everybody wants to store their stuff in storage, but then you can create your own, you, your own private space. But if you're bolting this onto a house, you're really paying cost per square foot for living space. What people, I think, are starting to get smart on going like I can make my own space in the garage and in essence, it's free living space and that's huge right, if you think about this, right now, everybody comes here, I mean for our company, for the team. We're all here every day. We're sitting inside as we speak.

Speaker 1: 22:51

My podcast studio sitting inside a man cave at Paradigm Storage in phase one right, and everybody that comes in here doesn't ever want to leave, so you can feel that culture, but everyone's coming here. So, at the end of the day, think about the cost for me to have an office If I wanted to buy real estate. I mean my entire team, that's running an entire firm. What we're doing, everything we're doing, is being ran from a small little garage for under 300 grand. You know what I mean. So I kind of feel like Steve Jobs right now, just a little wealthier at the moment.

Speaker 2: 23:21

Yeah, Well, I agree completely. One of the things I've always thought in the residential space where we're tacking on these massive garages, these homes, is that encumberment fixes the price of that home. If you can kind of think about it from the standpoint that if I go out there and buy a really nice home, it meets my needs and then I can grow and I can retract by having an offsite garage that is going to accommodate my toys. You're not always going to have the same amount of toys, sometimes you're going to have more, right? So I think it's a great asset and, honestly, if all of us 25, 35 years ago had started looking at storage the way we're looking at it now, oh my Lord, it would have been a game changer.

Speaker 1: 24:04

You know what? One of the secret data. I've never told anybody this and no one, I think, has ever really thought about it. As soon as I say it, you're like oh yeah, absolutely Nobody talks about the consolidation of what people have to go into one of these units. Oh yeah, the amount of people that have sold other assets to consolidate to go into one space in something like this has been a lot. Yes, it's hard to collect that data, I think, from like a like a internet perspective, unless someone's starting to track that data.

Speaker 1: 24:32

But we have been paying, or at least I've been paying attention. I know Bree is too, cause she's looking at all the contracts and but I'm a lot of these people I'm talking to investors that are investing, are consolidating and go to these things. So I'm really watching that and I would say honestly, about 10% of our buyers are consolidating as far as the larger units, are buying the larger units and consolidating. How many people do you know that are selling other storage units to buy one of our units and it's contingent Right? So what they're saying is I love your unit, I can sell my unit for a little bit less than what I'm going to buy yours and I get a lot more bang for my buck, more space. I can go tinker in there.

Speaker 1: 25:10

Where other places it's too hot to want to work on your boat or your RV. If you don't have air conditioning You're not going to go work on it. So if you're someone who, like my father, he loves to save money and he'll go tinker and do everything on his own, if a battery goes out, he's not taking it to the guy, he's doing it himself. That's 90% of everybody in Havasu. So when it's really hot nobody wants to go sit in their, their, their storage and work on their stuff. They want to go into a place where you can't even, you won't even know it's 110 degrees outside you know, that's so.

Speaker 1: 25:38

That's then. That's what happens when I walk around and I'm on site every day and I'm seeing our owners and they're telling me what they're doing and I'm taking that away. Right, I'm really on site, boots on the ground, listening. So that's, that's one. And so, to go back, before we go too far into a tangent, you know we're 225,000 square feet. Uh, where are we at with building f and building g, which is our last two? Ultimate, we're making it. One phase is what it sounds like.

Speaker 2: 26:00

We're almost pushing for it Almost almost. Building F. And again, this is how things progress. Building F the foundation is formed up. We've got the underground and all the horizontals ready to go to concrete.

Speaker 1: 26:14

And what's the biggest unit in that one?

Speaker 2: 26:17

It's like 3,000.

Speaker 1: 26:18

Yeah, isn't it? I think it's like was it 30 feet wide by 135 deep drive-through? Yeah, 135 foot double wide. Yeah, man cave, that is stupid.

Speaker 2: 26:28

And it's got a demising wall between that and the one next door. So if you want, you can buy them both. Take out that wall and just have ginormous space.

Speaker 1: 26:35

That would be massive. I say we just leave the wall out. Eric said not to do any more drive-thrus and I think that was bad. I think we should have let more drive-thrus in. Oh my God, the amount of people that want drive-thrus, let's bash on. Eric. Oh, we're going to bash on Eric, you know. Look for the number one broker right, I told him hey, leave those drive-thrus up.

Speaker 2: 26:59

And he's like no, you're in my house. Well, and not only that, but I mean we're learning as we go. I mean this is also one of those industries where the consumer tells us what they want.

Speaker 1: 27:14

Yeah.

Speaker 2: 27:14

And they don't know what they want until they see it Right. So we changed F from nine units to five and you gave me the permission to do it and said let's go. And I just approached you and said, hey, let's just knock it out of the park. It's a smaller building. Let's just see what happens. People are going nuts. They walk up to that thing and they're going nuts. They can already see the forms on the ground. They're like what? That's one unit. I'm like that's one unit.

Speaker 1: 27:40

Well, it's crazy because I don't know how many you know tilt, trailer, mtis and skaters and guys that have you know $500,000 million coaches are going. Hey, do you have anything? The basic, they'll spend the money. They really don't care.

Speaker 2: 27:54

Well and we're even seeing this with DLA, the family office people walk in there and they're like look, I can spend the same amount of money buying a nice house with a huge RV garage. Um, or I can build something like this and have exactly what I'm wanting. I don't need all that space, I just need a big garage right that's oversized at a level that is super super-sized. But when you see people's attitudes on that, you're like is there a market for that?

Speaker 1: 28:24

I mean do people?

Speaker 2: 28:25

want 10,000 square feet of garage. And people are like, yeah, yeah, I do.

Speaker 1: 28:29

If you look at all the spec homes or the customs that are being built up in the foothills, look how big those garages are. You cannot go wrong going with a bigger garage. You cannot People are starting to build underground shooting ranges out here.

Speaker 2: 28:40

It's wild, it's crazy what people really want. So, yes, if we had a paradigm to do over again, we would have conceived it a little bit differently and we would have had a different mix of of sizes of units. But here we are and, like you said, f's just to the point where we got concrete.

Speaker 2: 28:55

Now, um, the only thing that that is kind of holding me up is G have massive retaining wall and uh, it's kind of just a staging situations, sequencing problem, and and we're right there, we're right there, and and again. These are the. We were talking about this yesterday about schedules and the demands and making sure that we're sequenced right. And then you get halfway through and you're like, oh, I think we can do it differently and suddenly gain some time. This morning I'm out there looking at it and I called Takai, our superintendent, and said I think we're in better shape than I thought we'd be and we'll be able to COF earlier than I thought we could. So these are things that you don't always see right away, but it's happening. And so that G wall is going in. Once that wall's in, we get everything going horizontal on that, and then we'll go vertical on that building too, and that's fantastic.

Speaker 1: 29:49

You know it's. You know it's. I'm glad that you brought that up. But, you know, one of the one of the things too, is I don't think people quite understand how this, because, again, this isn't a standard self-storage. You know 10 can people? I don't think people understand how difficult this really is to build. It's a completely different level. And then, you know, one thing I want to talk on too is the, again, the entry point. You know the. We have a 3000 square foot unit to give you an idea.

Speaker 1: 30:17

People are going well, my gosh, these guys have millions of dollars that are buying them. Yeah, that's true. However, a lot of people are buying these from a tax strategy side to, so they don't have to pay Uncle Sam Right? So, whether they sold a house or sold a, you know, or sold their business or whatever, so they may not have a lot of money, but they're going to use what they would pay Uncle Sam to, in essence, establish another real estate property under their belt. So you get a lot of that.

Speaker 1: 30:40

And that's because this is a big retirement location and when people decide to move from state to state, for example, California to Arizona, they're going to move all their assets, including banking and real estate and they're going to try to keep everything tight because they just that's what they're going to believe and that's where the world's going to add. You like to say, for example, that that big unit in F, that to buy that somewhere else you're at two and a half $3 million minimum just to do a car cave that size? There's no way. And then to add to that, for example, Dover is ultimately a 20,000 square foot house.

Speaker 2: 31:19

But look how fast.

Speaker 1: 31:20

We're slapping that together. It's a whole different level compared to this, honestly, and it's also because of trades. We have more trades, and that's normal to build that type of stuff, than this. It's such a niche across every metric of the development that it's hard to find the laborers, so let's transition into that.

Speaker 2: 31:38

Yeah, labor in Havasu has always been an Achilles heel. We're a market that's basically retirement and recreation right, so it draws tons of people here. I mean our population explodes during the winter and during the big holiday weekends.

Speaker 1: 31:56

Which I think a lot of people don't know. They think it's summertime when a place blows up. No, it's just the weekends when they do. And that's where the small businesses here are most effective. During the hot season, it's actually during the winter when this place swells up. It's all the.

Speaker 2: 32:10

Yeah, the snowbirds. Yeah it is, and the problem is that it's so sporadic. We have a hard time keeping our kids here to continue to work in Lake Havasu. It's actually kind of an opportunity zone from the state of California. I mean, most people can bring factories, small family factories, here there's a lot of that in Havasu but they're only needing six, seven employees to run their entire business. So there's just a problem of the right kind of jobs being available and then the right kind of people staying for those jobs. I oftentimes say we don't have an area outside of Havasu that is close enough in proximity that you can drive to Havasu and pour coffee. It just doesn't work.

Speaker 2: 32:53

So the people that are living here have a fairly high living expense and so you have to have good jobs. The construction industry has always provided a big source of income for a lot of those people looking for employment that the quality of those salaries wouldn't buy them. It's only been in the last five years that we really started to see compensation, started to really rise up and be more competitive with Vegas or places that people could go otherwise.

Speaker 2: 33:22

So we're getting there, but it's still a deficit and we're really struggling with a lot of the trades having the manpower to keep up. If we do some of the projects and you and I talk about this nonstop if we do some of the projects that we're wanting to do, our first concern is labor. We can get all kinds of projects. How fast can we get these people to scale with us so that they can keep up?

Speaker 1: 33:42

And that's something that I wanted to. It was funny. Somebody was asking me about that the other day and it was kind of one of those somebody who's just kind of playing devil's advocate, right, so I kind of teed off a little bit. It was talking about how they're like, how do you with your guys' projects, as big as they are? How the hell are you guys getting them done Really?

Speaker 1: 33:59

Cause he was impressed on how fast we're we're moving. And then your trades. And I said, well, if were actually residential subs and then went and got licensed for commercial because we had big enough. Uh, they had big enough contracts with us to then go do it. I think what you're seeing is it's. You know they say it's always the top 10, it's a, it's the 10 that gets 90 of the business. Always. That's how it always has been and everything. So what what's happened is is those trades I'm going to say let's just call london bridge electric and let's just say Hot Solutions as two best examples we have. Now they have been established in the business. I think Aaron has only he's been running. He's been in the HVAC forever but he just launched his own business and he has a two-man crew at the time. Now, how big is he? He's got four or five trucks. He's got seven, eight guys. He's got a big building office.

Speaker 1: 34:48

Now he's got a big building office now and he basically is dominating the space, and it was because we gave him the opportunity. Then he has buying power because he's buying a lot more units. So he's building relationships with the supply houses Same thing with London Bridge Electric, right, and it's with pretty much anybody who we were able to tie with. But what we've had to find is the guys that are willing and able to be able to scale with us, and the reality is a lot of times it takes money to do that, to spend money into your business. What has happened is is they've been able to get to a point where they can grow at a controlled level with us, but now they have the liquidity to really help us grow. So what's happened is is I'm seeing the heartbeat overall of the company on the development side kind of come together because all of our subs are there.

Speaker 1: 35:37

That's why some people are going. Hey, you know, as you know, I'm going to Nashville to go look at three sites, maybe even four, for the next paradigm storage, and the very first thing we did was hey, well, you guys go multi-state and every one of our trades are like you bet, you know, for the most part you mean some, some can't, but yeah, but the two that, like, we really want, you know, as far as London bridge and HVAC, they're absolutely we're in. You know, that's actually really cool because when you sit around and you're talking about this too from a business growth side business development, scalability, uh, capital infusions, investor, you know interest, what have you to be able to show? Literally, this is the relationships we have in place, because you really for you to scale, you absolutely have to do it.

Speaker 1: 36:20

It's funny when people go, um, well, how's your relationship with the city? We're like that's a whole nother conversation, that you have to have a good relationship with this, that you have to, and not a lot of people understand that's part of the development world, um, and, and that's a song and dance in itself and that is, uh, we have to work with our, our design team to play the politics. It's a lot, you know, and I don't know. I don't think people quite understand how much you have to spend on focusing on your reputation, saying you're going to whatever you do, you do. That's how you're going to get to a business that people are going to trust, because you are going to call upon these guys when things are hard and we're all going to have to come together and we've already done that.

Speaker 2: 37:00

We've done it several times. It's been tested, yeah.

Speaker 1: 37:02

And that's where trying to build a well-oiled machine. That's the real inner workings of a company. That's a company that's kind of that. You know, selfless. Come and talk to people, being humble, not being too arrogant and cocky, like hey guys, like this is what I'm trying to do. This is for my family. I'm trying to scale this business. I have people that are relying on me. I have people that are really hoping they can make some good money. I want to make good money, I want to leave, have my sons run the company the list goes on.

Speaker 1: 37:28

But that that pours down into the energy, that goes down to the labor force. So from a retention side, our subs are now getting bigger and longer contracts that the laborers are going cool. Longer contracts means consistent income and all these trades and laborers I hear bounce all over the place because they just don't have big contracts. So but and of course, havasu has grown so much over the last five years in development. So ultimately, the whole, all, the whole entire construction basis just exploded and there are a lot more new people and it's been actually doing really well. But that is something that when you choose your trades, how are they also treating their laborers? Are they paying them well?

Speaker 2: 38:04

Yep.

Speaker 1: 38:05

You know and you hate to say, to judge a book by its cover but what?

Speaker 1: 38:07

kind of cars are they? How old are they? When they're there they're wearing their nail bags, kind of thing. Like it's a lot you know and not a lot of people understand how many moving and politics, and then intuition comes into play and experiences everything and that, all you know, is important. So, okay, I keep going on tangents, cause I do that from time to time. But let's move over to building G again. And what to building g again? And what do you think? Uh, so we're going to do f. Well, cof, how far along do you think we'll be in building g, just round about, from completion of f to where do you think we'll be with g?

Speaker 2: 38:40

the wall is going to dictate that, but the wall is moving along quickly now. We already started the wall. Yeah, we started the wall and I really think that we are going to be very close, in the first quarter of next year, of delivering the building yeah, delivering it. I think that's reasonable. We may be able to beat that. Right now. We've got a lot of extra duberance, I guess with the trades Right.

Speaker 2: 39:05

So they're really rolling. We've got our rectors full force. I mean, boathouse has taken up a lot of that capacity and then keep asking them.

Speaker 1: 39:15

I said you're going to need more, and just for us he doesn't flinch.

Speaker 2: 39:19

So as long as all that can work, I think, I think that's a reasonable expectation.

Speaker 1: 39:23

So building G, which is everyone's favorite and it's funny because I wanted to bring this up earlier Our larger units are selling faster than our smaller units. Yeah, so people are looking for those larger units. Yeah, building G and F are nothing but large units. Yeah, so I do believe, with how the size and even the cost for each unit of being higher than the smallest one we have, I believe that those are going to sell fastest overall. In fact, I think when we start, once we go mark we, once we start marketing the delivery date for G, I, once we start marketing the delivery date for G, I think we're going to start filling those. I would almost put money on it that by the time we see OG, it'll almost be fully sold. I would love to see that.

Speaker 2: 40:00

I could see it, especially as the market shifts. Yeah, the large units in E went very, very well. So I think that's the formula I really do. You can't underestimate the capacity.

Speaker 1: 40:11

People want it and there could be, you know, there could be a shift where we as many small ones as we have. We went the opposite. Right, we have more big ones and we do small ones. To shift that percentage around, we can even. We can even get down into the nitty gritty and kind of look at speed to delivery, to marketing, and see how fast those were selling compared to building the awareness of the escrow. Yeah, you know, that type of stuff We'll get down into the weeds, as you know.

Speaker 2: 40:32

on the data side, Okay, so with that said, the next units in Nashville, that would be another learning curve.

Speaker 1: 40:38

I haven't even showed you the sites. I've already been to the last two. I've got to show you one site, but it would be a huge learning curve too, to see. Oh yeah.

Speaker 2: 40:45

Are they also wanting those large units over the all our units will learn that very, very quickly yeah, well, the one.

Speaker 1: 40:49

The first site I'm looking at is uh, it's 7.96, so just under eight acres. Um, it was an original bowling alley. It's all torn down, it's flat, but utilities are pulled to it. It's up against the highway, love it. It's four minutes to the launch ramp and old hickory and national, oh I love it hendersonville.

Speaker 2: 41:06

So the nice thing about doing larger projects like that even this project is, um, we can kind of judge, based on the buyer's desires on one building, how we should probably proceed with the rest. Uh, the neat. I don't. I don't know of any other type of building where you can make the shifts this quickly, but in metal building, uh, if we wanted to uh change our mix, our ratio of small to larger, we can do that almost on the fly. All we have to do is get the foundation right and then we can, as built the steel building to the foundation. So, um, all we have to do is do that minor change. It's not that big to be able to shift a project perfect, okay, so let's go over to um.

Speaker 1: 41:52

So building g and f will deliver the bill. This whole project will be completed, to say you know, latest first quarter next year, maybe even earlier um, and so that's all going smooth. We're going to be pouring the foundation next week.

Speaker 1: 42:03

F, yeah, f on the next one yeah and then, okay, so let's talk um, let's talk about um, family office society. I think that's kind of the new hot topic right now. Everyone's kind of seeing that thing moving fast and knows that we're building our headquarters there and everyone's starting to really see what Paradigm overall is trying to accomplish here and they're like wait hold on what's this building. So let's talk a little bit about the building. So why don't you just kind of give the story about my phone call to you? Go?

Speaker 2: 42:27

hey, I found a spot.

Speaker 1: 42:28

We got to buy this thing and build one gigantic man cave oh man, yeah, yeah, no, you you did.

Speaker 2: 42:32

You said, hey, I'm looking at this property, it, the plans are already in the city, we're gonna have a permit right away. And, um, let's go. So I go over to the architect's office, we sit down, we look at it. I'm like this is beautiful, it's gorgeous. And, um, we close escrow on it. And then you call me, like on a saturday, probably two weeks later, and go hey, um, can you come by the office? I got a couple things I want to change. I'm like, oh, my lord, and we did. We ended up doing some changing to it and, uh, that cost us a little bit of time because we had to go through back to the city and all that kind of thing. But we added a gabba, square footage to it and, uh, that was the right thing to do yeah, I think the bigger the better, and plus, the space was already there.

Speaker 1: 43:09

It was already there, we just had to repurpose certain flooring. We never changed the footprint.

Speaker 2: 43:13

Yeah, we never changed the footprint. The interior changed a little bit and fortunately we got through that process. It was a little longer than we thought.

Speaker 1: 43:20

I would consider that a value engineering play. It is a value engineering play Because ultimately if I don't have to change the footprint but I'm able to find square footage. Yeah, that's a value engineering play. It is a value engineering play.

Speaker 2: 43:32

More importantly, it not only was a value engineering from just the use of space, it lifted the whole ethos of that, building up another level.

Speaker 1: 43:44

I mean, it's just a better building for it.

Speaker 2: 43:46

It was the right way of dealing with it.

Speaker 1: 43:48

I think even the way that it's designed feels amazing.

Speaker 2: 43:52

And then all the way, the way we're creating the stairs for the space that we found and just what it would look like overall. It's going to be stunning. Yeah, it was a great utilitarian building under the design as we bought it. We've changed it to something on a whole, nother level.

Speaker 1: 44:06

Yeah, I don't think anyone's ever seen anything like it. Yeah, which is nice because we're actually going to get a pretty good jump in value, and that's nice to see that we're building a building. How many times have I told you that other people are calling us to build these buildings now? So that may be something we bolt on just to go have fun, because we're building these this fast Pop these up everywhere.

Speaker 2: 44:23

Yeah, we could go do some minor changes to it and duplicate this just anywhere, and especially if we don't have the height restrictions that we have here in Lake Havasu and other places and some of the zoning requirements. It'll be a piece of cake.

Speaker 1: 44:34

Don't make me go down like a rabbit horse dreams, because that's like a whole other. Hey, let's put a bigger chandelier. Oh my gosh, I know.

Speaker 2: 44:39

That'd be really cool.

Speaker 1: 44:40

But yeah, just what's the size of it? Where's the location? Just let's talk about the overall kind of area. Because what's funny is at At first I was a little shy of the area, yeah. But then now that I'm there all the time, I'm like I think this is a great area, it totally worked, yeah, it totally worked and it was industrial and the land was literally a Port-A-John storage facility. That's what we bought.

Speaker 2: 45:03

So it didn't have the curb appeal that we really would like to see when you're selling a piece of land, right. But we saw the vision of it and once we got the building up and we were able to stand on those decks and see this crazy view and look at that massive garage, and then the buildings around us suddenly kind of changed. I mean, they're not dumpy at all.

Speaker 1: 45:22

No, you start looking at them differently.

Speaker 2: 45:23

There's nice storage, and on the other side of the street we have a beautiful building. Up above us, we have a yard down below that was begging to be bought and someday in a while above us, we have a yard down below that was begging to be bought and someday we'll, you know, we'll probably be grabbing that land at some point. So oh yeah, yeah it's, it's a different street to be building such a beautiful building, but uh it, honestly and without being biased, it'll be one of the most beautiful buildings in havas. Yeah, it's a really good looking I would agree it was.

Speaker 1: 45:46

You know, what I love probably the most, besides the location and the view, which I'll talk talk on in a second, is the fact that I love wakeboard boats and there's like a master craft mechanic dealer right there on the corner.

Speaker 1: 45:57

And I come around the corner every when during business hours, you know like that is so cool to see because master cars are like one of the best boats you know, so it's really kind of cool to see that, so I feel. And then when you're out to go up onto the even when you're out on the deck or outside or you're in the back of the unit, you can hear people start their boats at Windsor Beach. We were literally I don't know what do you want to call it 200 yards as a crow flies to Windsor, oh yeah.

Speaker 2: 46:21

Something like that, about 200 yards, yeah, something like that, and it's an expansive view. It's not like a little piece of lake view it's expansive.

Speaker 1: 46:28

Well, I think, well, shoot. Lake view it's expansive. Well I think, well, shoot. I mean we have, at least I would say, close to 180 degree view from the second floor. It's big. And then I would say you know that that third, that first floor, in the break room, is that actually I believe it or not when you walk into the building and you look out there and you're like, wow, that's actually a pretty impressive view. So, like the way that the even the columns are designed in the back, you could still see through them and you only see lake through the columns.

Speaker 2: 46:54

It's a good looking building. It's a good looking and it's going to be beautiful the way we're out of it. It's going to be gorgeous.

Speaker 1: 46:59

Yeah, no, I agree, we've got a total of 19,000 square now with the mezzanine Yep.

Speaker 2: 47:04

So we're still on the 15,000 square foot footprint but found 4,000 extra square feet.

Speaker 1: 47:09

Yeah, yeah.

Speaker 2: 47:10

That's a lot, it's a huge amount.

Speaker 1: 47:12

Imagine going yeah.

Speaker 2: 47:15

It was again a relationship with the city that we had built previous allowed us to do that as a plan change and thankfully they allowed that and it worked out perfectly.

Speaker 1: 47:22

Hence made a little bit more money because all that upfront work we did building a relationship with the city Yep, agreed, yeah, so we're looking at trying to complete that by the end of the year as well.

Speaker 2: 47:31

Yes, right now we're fully framed up. We're on target. Mep is in place, we've got another week of that and then we're going straight to installation drywall.

Speaker 1: 47:40

It's moving, we are moving. Okay, so let's go over to Boathouse. So today, this morning, we get down there.

Speaker 2: 47:47

They're delivering one or two buildings. Yeah, yeah, we're dropping buildings a total of, uh, three trucks today, one truck tomorrow. Thought we might get two trucks tomorrow. We'll still see. Um, the building drop is what it is is. Each building is called a kit and it takes several trucks to deliver that kit. We don't always get the trucks in sequence for each building, so four buildings are coming all at once, in different parts, on all these trucks. So it's quite the process for Takai to figure out what goes where it's a lot it's a lot, but we got two of those slabs down.

Speaker 2: 48:23

We've got two getting ready to be placed. We'll be placing building D shortly, a will follow and all the slabs will be down. We're finishing up the last of the final grade and we'll start doing the pavement.

Speaker 1: 48:39

We're going to try to have that done by the end of the year too.

Speaker 2: 48:41

Oh, yeah, yeah, I don't think we'll have a problem at all. No, we're there.

Speaker 1: 48:44

Now we're really moving.

Speaker 2: 48:45

So again, out of the hole.

Speaker 1: 48:46

Now we're out of the hole.

Speaker 2: 48:47

So this is a huge challenge. We really had some kind of ridiculous engineering issues for something that simple. No, we won't bring those up quite because it's a little political. We're going to leave it there.

Speaker 1: 49:01

So okay, so from Boathouse, obviously that's a good one, that's really more of under our brand anyway. So that's a kind of in and out deal. And then let's talk about kind of the word on the streets, about the gym and the barn cage. You know, I mean that's probably. I mean I feel like that's our new, you know, identity as a company. They really a lot of people know me from the lending side, but you know, I think that's the new identity.

Speaker 2: 49:25

Well, I think so too the marketing that you guys do in general, have you know elevated the gym to another level of not just an idea, but people are waiting for it now and that's important. When people are waiting at the door, going open, open that's really where you want to be and that's where we're at. People love this concept. They love the idea. There are skeptical people, there are cynics out there, but I think the majority of people go, go, yep, this is the right place at the right time to do it it's funny.

Speaker 1: 49:56

Well, I would agree with you. I'm actually getting more people writing comments, you know, because you always have people stay out of our city, school people, and that's I get it right. No matter where you go, you get that, by the way. Um, but then you have a lot of people that are going like, finally, or you know, shoot, if if Havasu had a gym like that, I'll be there way more often.

Speaker 2: 50:15

Well, it does.

Speaker 1: 50:17

Um, in fact, I mean, you see, you see our projects being marketed and using, you know, for PR, uh, for what other developers are doing in the area as well?

Speaker 1: 50:29

So, when you're using paradigms barn caves, the gym, and then you know paradigm storage as a, as a conversation piece for the data and and for PR. That's when I became very proud of what we've created and I think people, I think we were perfect timing, leading North on a development. I would I would like to say that this was really the one thing that started to kick off the North side, finally get it moving. There is a lot of activity Separate too. Obviously, the refuge has done great with their kind of golf stuff. They got going on in their pool. They added a lot of value there. And then North Point Viewpoint was beautiful, perfect, great location Yep.

Speaker 1: 51:10

And then you have the guys down there towards the 40. They got a lot cooking over there, right, and have us to Heights, I believe, and so forth. So now that we came in and took so much land down, I mean let's just kind of talk about it. So, between Paradigm Storage, the barn caves, the gym, we're about 750,000 square feet. When you look at the mall, dillard's, walmart, this whole area, the retail side 730,000 square feet. So in essence, we came in and are developing the same amount of square footage under roof as that entire mall. Here. That's an institutional play, you know. That's saying, hey, we are seeing a massive growth potential and we want to get in front of it and we're going to go in, we're going all in. Basically is what that was, and I do believe that was the right play I do too.

Speaker 2: 51:57

The north side is the growth corridor of not only lake havasu, but of everything that is going to be like havasu that hasn't even been annexed yet, all the way down to the 40 someday, right, um, those that are are starting to see the writing on the wall that is everybody looking for land now. Everybody is conceiving some project out here, the mall site, which you know, unfortunately was um, you know it the timing was rough it was.

Speaker 2: 52:26

It was not anything that the mall really did, it just happened to be it was co'd in 2008, didn't it?

Speaker 2: 52:31

five, oh god six right in there. It just was horrible time and, um, nothing that they did very wrong. It just kind of like the pandemic. It changed. No, they just never got out of it. You know there's businesses that completely changed by the pandemic. Well, the mall was completely changed by that recession and, uh, it's just now starting. It's just now starting and it's got some great management, but it's just now starting to see a revitalization. People are looking at it differently. People are looking at the land around it differently.

Speaker 1: 53:01

They did the right things by getting themselves out of that.

Speaker 1: 53:10

What it was is that all of the locals and local businesses were looking at that place, going, hey, that thing's got. You know it's under a black cloud. It's the way the mall has been pitched to everybody out here. Cloud is the way the mall has been pitched to everybody out here. I think what's happened is you have such a growth kind of component. Now you have all these people coming in from California, a lot of developers. You've got a lot of smart people and they're looking at this going wait, hold on. This is going to eventually pick back up, because it always does. It just needs density and you're seeing its growth already. So when you sit down and talk to the owner, he's like, yeah, here's our, our private traffic study. Here's what we really have going on here. All of these buildings are actually taken, yeah, and like wait, what you know? They don't know it. Yeah, people don't know they're. Actually, I don't think there's many available stores over there or storefronts well, and and when?

Speaker 2: 53:52

the pd changed all that, you know, when they got out from under some of those mandates, they thought they needed to kind of protect the mall. As the mall, it allowed people to kind of look at it in a completely different way.

Speaker 1: 54:04

Yeah.

Speaker 2: 54:05

I can't say enough about the management of that facility.

Speaker 1: 54:08

They did great. They're doing a great job. Yeah, they've done what they're doing. I mean bringing in a 30,000 or 40,000 square foot brand new high-level technology surgery center.

Speaker 2: 54:18

It's beautiful.

Speaker 1: 54:19

You're like wait, hold on In this mall. You have what in that building and you walk. Remember you and I did that tour.

Speaker 2: 54:24

It was gorgeous.

Speaker 1: 54:25

I mean, we ended up walking into this thing. This was a big eye-opener for me about how healthcare is becoming more important, of course, here, and that people are actually doing something about it. It's not our space, I mean, we can build buildings for them, but it's not our space. So I want to stay out of it for a while, but that was something I knew was always going to be an issue. So when you see somebody going, hey, I'm going to dump $30 million into a surgery center right here on the north side, that really opened up my eyes too. He's seen something we want to know too, and that is such a big deal.

Speaker 1: 54:58

When it comes to the retirement community and it's funny because I was telling people the other day I'm 40. I feel like I'm old man. I feel like I'm just so old and even I'm more focused and spending more money in my own health. And as you get older, that's what typically happens. And I was telling someone the other day too, I think, what you're seeing, due to the vaccines and what happened with the pandemic, people don't believe in big pharma anymore, and neither do regular physicians in many ways, and so they're just kind of guiding their clients hey, going back to eating clean and working out. You know that's really the only way to do this. It's a great shift.

Speaker 2: 55:29

It is. It really is it needed to happen, for it happened for a long time it did.

Speaker 1: 55:32

Yeah, we could go down rabbit hole on that one for sure, but yeah, that was something.

Speaker 1: 55:35

So where I'm going with this is that that's the potential that the mall has that a lot of people don't know, yeah, and then really, the only way for that mall to grow is development.

Speaker 1: 55:44

Now, yeah, that's it. There is available land there, but that's the only way for that mall to grow is create the density. And so now you got it for you to bring in a restaurant, you got to build the building to bring in a restaurant. There's no, you know there's available space to lease up and bring in restaurants, right. So the infusion of capital needs to be a significant amount more, yeah, and what's happening is is when you have guys this isn't a qualified opportunity zone, when you have guys that understands that money is going to look at stuff like that and uh, and are looking at more long-term plays rather than short-term, because qualified opportunity zones are 10 year investments. So people are, you know, investing their, their uh, deferred tax hit, if you will into those funds and guys like me are going hey, you know, this place is going to grow, but it's not going to grow as fast.

Speaker 1: 56:29

But let's get on the front lines of it now, because it's coming and then we can build three, four, five, six buildings, and it's a 10-year play. It gives plenty of time for that. And then when you go, oh yeah, there's 630 acres that was just purchased by the largest residential builder here and now they're chalking it up to the other large residential builder here and there's going to be probably close to 3 000 homes. When you see a takedown like that of 10.3 million dollars, 630 acres right next, I mean literally two left-handed rock throws away from us and you're going. Okay, there's no, no questions that this is where the development's going.

Speaker 2: 57:03

Yeah, yeah, it's the only available land out here and the desirability everybody wants to be out here it is, and it's taking some time for that to take off, and I moved to havasu in 2006. One of the first projects I did was right next to the airport, right below there, the business park never really taken off.

Speaker 2: 57:17

We've got a beverage company in there that does bottling and uh, but there's so much capacity so much opportunity to go in there and do something special, and I think people are just now starting to see that they're starting to talk about yeah, for sure, all right.

Speaker 1: 57:30

So let's talk about the gym and even further.

Speaker 2: 57:33

Let's talk about the design of the gym.

Speaker 1: 57:35

So we engage with Steven Beagle. We obviously have Rob Sampson over at Selberg which has really kind of helped us start the footprint and took my late night calls and the brain damage to come up with what we did come up with and then we fired it over to.

Speaker 2: 57:49

Steven and said, hey, let's engineer this thing.

Speaker 1: 57:53

Let's talk about the square footage, the size, what we're building, what's in there. Let's talk about that real quick.

Speaker 2: 57:57

Yeah, 30,000 square feet, two floors, uh, parking structure. Uh, it's actually a beautiful building. It really, uh, steven knocked himself out designing something that just really unique, very special for havasu. Um, it will complement the barn cave project behind it and it's's going to really transform the way Retail Center Boulevard looks as you drive down it and as you head towards the mall. It's gorgeous, it's a super techie, high-end gym that'll have all of the bells and whistles. We'll have all of the not only great equipment, but all of the recovery equipment. Now that everybody's really wanting. We're trying to engage with some, uh, um, I guess you'd call them functional medicine people to come in and maybe provide some chiropractic care functional medicine- I haven't even really shared that much about that opportunity I know the opportunity is there.

Speaker 2: 58:49

I cannot wait for it because that, coupled with the medical activities that's going with the mall, this makes, oh yeah, it just makes sense For sure.

Speaker 1: 58:58

And then I think they're supposed to be like a little sports center indoor. Is it batting yeah?

Speaker 2: 59:03

I just heard about that Like a kind of a D one batting facility right there in the cinema.

Speaker 1: 59:09

Yeah, so I think they took over what three or four different movie theater yeah.

Speaker 2: 59:15

I just heard about that. I think it's fabulous. That's a lot. That's actually a lot of square footage. That's yeah well, you know, the whole movie industry is changing periodically, so for sure, I mean, we've got a buffalo, wild wings going in there.

Speaker 1: 59:25

So that's, that's. It's growing. Yeah, um, okay. So what about the pool? Let's talk about cool that pool is amazing.

Speaker 2: 59:31

Um, again, this is where partnering with really great subs has just been fantastic, and Sandcastle's over there has just knocked it out of the park. We have a beautiful rendering and design of a Dubai-inspired pool. You've been really instrumental on what exactly you want on that, and so we've got this great architectural piece in the middle of it, just like Dubai Club Drift. Right, yeah, drift Just looks and it's going to be special. It's going to look beautiful. Great architectural piece in the middle of it, just like the by uh of drift right.

Speaker 2: 59:55

Yeah, drift just looks and um, it's going to be special, it's going to look beautiful I think a lot of people are underestimating how much of a spa feel that? Yeah, because we're going to put a wall up right because in essence, the building faces north and south right.

Speaker 1: 1:00:08

So when you come off retail center drive you're really parking and going into the north side. So as the sun, sun sets to the west, you're kind of overseeing the lake, which we have lake views from the second floor the building is, you know, let me go back, the pool has, because it's facing south, which, for those of you that don't know, the Barn Cave site, this gym site, is right next to Paradigm Storage. So in essence, there's a FEMA storm drain spillway that goes right between the parcels. But that's it. In essence we share a property line. So the south of the building where you come out with the pool is facing the north side of Paradigm Storage, which, look, it's a metal building. It's not that pretty. Now, we did do pretty cool stuff, putting Paradigm on the air conditioner covers but you can't see it.

Speaker 1: 1:00:56

It's just kind of a good looking building, it is but I'm not when, with what type of culture I'm trying to deliver. Right, we're going to have a wall up with like in its own little you know kind of like in essence, uh, what would you call like our own palm trees just very peaceful area yeah, and just kind of kind of close that off, you know.

Speaker 1: 1:01:11

so you don't see that ugliness of that building, but I think it's those kind of close that off, you know. So you don't see that ugliness of that building, but I think it's those kind of those decision-making that's really going to allow people to feel more comfortable. It's not as wide open, but it will feel a lot more comfortable, a little more secluded, private, you know. And then, yeah, we have full recovery center, and then let's talk about the kind of the construction of the parking structure and that this is actually the first parking structure.

Speaker 2: 1:01:34

uh, parking yeah, so, uh, this is a cast in place concrete combination structure. It'll be a pt slab, that's post-tension slab, so, um, it's, it's pretty techie. Uh, we had to do that over precast because we had headache issues with drivability and getting cars under the lower level, so it's a fairly demanding concrete project. We're partnering with one of the best concrete companies in Havasu and with one in Phoenix to hopefully get us in the place where we can build this quickly. We're still looking for more proposals for that. So the rest of it's a structural steel building, along with vertical concrete and masonry retaining walls. So it's a combination of everything, but the basis of the building is structural steel.

Speaker 1: 1:02:24

Perfect, and then obviously it's built into, like the first floor is actually into the hill. So, in essence, we're on a foundation that has a huge retaining wall, which is ultimately the first floor, the bottom floor's east side of the wall of the building, so therefore clearly it's underground in essence and then the second floor.

Speaker 1: 1:02:43

I think we have very small windows, which will be nice, because the way we're going to design the gym itself, those side of the building, not only won't have a bunch of sun coming in in the morning, but it'll stay a little cooler, you know, for longer in the morning. Yeah, um, especially during the summer. And then, uh, and then obviously the parking structure. What, how far is it from the building?

Speaker 2: 1:03:03

one foot yeah, it's very, very close, yeah, very tight. Yeah, we have, you know, restrictions on how close we can be. So we were right there on that line and, um the building you were going back to saying, you know we have exposure issues. We're using a king span styled uh panelized system that is highly insulated.

Speaker 1: 1:03:21

It should help with the heat load on yeah, and those are kind of cool because you drop them in with the crane yeah, yeah they're, they're big, um, they're big and and very, very well yeah, and designed for that building custom built for the building.

Speaker 1: 1:03:33

Yep, I love it, love it. So, and then you know it's hard to explain maybe here, but I want you to picture, if anybody knows, paradigm Storage, the Paradigm Storage, from the center line of the street. The elevation is what? 14 feet below grade, I believe. 14 feet, yeah. So when you come into the driveway you got to go down into the development. It's the same concept for for the barn caves. You're going to come in on the North, on the North side of the gym, to go into the main gate, into the barn caves, but it does have a grade that drops down. I think it'd be close, about 14 feet or so.

Speaker 2: 1:04:07

Yeah.

Speaker 1: 1:04:07

And, and so what happens is, as for the way we're setting it up, is our, our, let's say our members can, for the gym can actually go down and park underneath into the parking structure and then separate to that that going underneath and parking there. So can our residents, if they have a car or they have a golf cart and they just want to go to the gym in the morning, go to the pool what have you?

Speaker 2: 1:04:26

Come out the gate, go right underneath.

Speaker 1: 1:04:28

Go right underneath and then if they don't want to go through the gym, they don't have to go through the gym, they can just walk up into the pool privately. They don't have. So the. The residents have access to all of the amenities, but they have kind of either first class kind of coming underneath the parking structure and their golf cart, yeah, or they get to go up around the side of the back of the building which no other members will actually have access to, the to the barn caves. Overall, uh, community, um, but man, I can't. I can't wait to see that once, once the gym is done and we get all the grading done for the barn caves, I can't wait to see what that would look like. As a resident, you know, driving up to the gym yeah, you know, because it's just going to be, you know, so tall.

Speaker 1: 1:05:07

It's a big building because of how you know, so I'm really looking forward to seeing that.

Speaker 1: 1:05:10

And then the then the barn caves I thought was nice, just kind of give even like a the latest and greatest. I mean, we met with what? Unisource the other day and our civil engineers and I think what was it? The? I can't think of the name. What's the energy guys? Unisource, no, no, the other guys, the renewable energy Renewable so really the idea behind that was for solar, yeah, and it looks like we figured out what we need to do and how to do it and when to submit applications and phasing it in.

Speaker 2: 1:05:37

We learned a lot from that meeting.

Speaker 1: 1:05:38

Yeah, that was really fruitful. But it's nice because even those guys are excited to see what we're building and they're like, so that's not normal, getting in front of it, having a big meeting with everybody. I and it was about the same situation. But now that we're farther along in the design and really the phasing of it, they were like, okay, let's get into the trenches now.

Speaker 2: 1:05:58

Yeah, and you can't get into the trenches more quickly. I mean, it's time we have to be in there right now to be on time with all the other construction activities.

Speaker 1: 1:06:07

It's pretty cool because we got a pat on our back the other day from a couple of people that I was on that podcast, of people that I was on that podcast and they were saying that, uh, they are can only imagine how much design energy kind of went into the barn caves in the gym and not only from two different architectural firms but a lot of professionals that have done stuff like this and all kinds of other different walks of life. But you know, even us on the paradigm side, the amount of energy that we went into this and the amount of going back, especially with rob in the beginning, because I started really with rob yeah and, like I said, the poor guy took all the brain damage.

Speaker 1: 1:06:43

But uh, you know, going back and forth with the design, and then I really leaned on him on setbacks and how many units can we get, and therefore I need to get this many units to make it profitable and you know, I gotta make it look nice and it look nice and I want to use this trendy thing, you know, and obviously let's go with steel buildings. I'm seeing an insurance issue. So even before the big fires in in um in California, we were already seeing the difference between uh insurance costs for the homeowners at the use of the in-buyer right, the homeowners uh to uh to ensure their home for regular homeowners insurance. And the reason we were able to catch that is when I moved headquarters to Nashville as a lender I started doing a lot of hard money loans. Obviously out there, you know, back East and barn dominiums is a big deal. So I'm looking at barn dominiums as regular single family homes and they were coming over as loan requests.

Speaker 1: 1:07:27

So as I'm reviewing the construction budget, I'm looking at the insurance costs. The insurance goes down for the contractor and then the insurance was lower for the homeowner at the end of, you know, once it's got CO and I was like, okay, we need to probably stay in that space Because, again, we started the design of this not knowing which way the elections were going to go and which way the market was going to go and I looked at it from a sustainability side, for Paradigm, but also for my current investors, because I have such a, I know what their need is too, so I'm like all right, so let's go into it.

Speaker 1: 1:07:55

So what's happened, though, is it's morphed.

Speaker 2: 1:07:57

Yeah, you know yeah.

Speaker 1: 1:07:58

Remember I tell everybody oh yeah, I came up with the original design for Jamie which is one of my best friends out here.

Speaker 2: 1:08:04

Single mom yeah.

Speaker 1: 1:08:05

I've been friends with her for I don't know 20 something years, yeah, and I said single, and then obviously we couldn't get the density that we really, really want because we were shooting for like 140, 150 units. We were way high, yeah, but we couldn't even get close.

Speaker 2: 1:08:18

We moved down to 93 units.

Speaker 1: 1:08:19

I go to Jamie I'm like I'm sorry, I don't think you can afford this anymore. And she's like you're so mean. I'm like hey, listen, take it up with the utility company. They want all the, they want half. It's not as affordable because I have to cut it.

Speaker 1: 1:08:32

So what was happening was it was. It was that song and dance of like okay, well, I can't get as many units in here. So then how do I design the building in a way that's desirable to get the value that we need to still make it work? So it was. The song is usually it's usually the other way around yeah, it's just like I know what I can build. I know how many were like okay, so now I gotta go more grand and I gotta, I gotta, widen the building, I guess. So it's like and it was not a little, but it was massive amounts of adjustments to get to what we want what's comfortable because that's that's probably the hardest part is like what's actually comfortable. So, yeah, it looks great in theory, but like you need an example and there's no other examples like this.

Speaker 1: 1:09:11

But we look at other sites and lots, and I've traveled and you know so. So I'm kind of like looking at all of it going, okay, we can go 28 feet wide. I think that's like the minimum, you know. And then I think we go. You know we go with the third floor.

Speaker 1: 1:09:23

And if we're going to go with the third floor, that you have to go up to a third floor, we've got to have an elevator, given the area. Plus, you know, our lid here is like 16 feet in the first floor. That's like that's like two stories right there, I know. So people are going to want to. And then you're in a retirement community, right, like nobody wants to hike up four sets of four. You know stories of stairs really, right, um, to get to the third floor.

Speaker 1: 1:09:43

So, and then, okay, if we're doing that, then we need to make the third floor the master suite. Yeah, where it separates you from the house. You got this huge vaulted ceiling, so there was just so much energy going back and forth to be able to make it work, and then we were able to get the square footage and the density that we wanted. So then, looking at it from a data side, going, okay, we could sell these for easy over $400 a foot, but we'll stay just under $400 a foot to be conservative and then testing the waters. Once we had a pretty good rendering and we started pushing it, people were like we love it. We got to go. I don't know.

Speaker 2: 1:10:17

And it like we love it. Yeah, we gotta go. Yeah, I, I don't know. And it morphed, it just took off. I don't really know. I, I, I credit uh, chip and jonah gains with the whole barn cave word oh then, barn, dominion, barn dominion barn minium word that's correct and, um, I I don't really know.

Speaker 2: 1:10:29

I don't think anybody really knows who actually came up with it, but they claim to and I kind of agree with it. But they claim to and I kind of agree with it. But I think that it somehow resonates with something inside of you. Whether you've ever lived in the country or not, whether you've ever been on a ranch or not, a farm or not. It's something inside of you says I want a piece of that lifestyle and people can't get enough of it. And I love it because I think it's unique.

Speaker 2: 1:10:53

It's a way to build and the way we're doing it. It's a way to build in the way we're doing it. It's a way to build and still stay modern but keep a lot of that. I call it kind of a country culture still involved. I love it and people seem to really resonate with it. I can't believe the demand that we're getting just from people say look, if I can get to the point in my life where I can afford one, I want one. And then we also have the people that say give me one right now. It's amazing. I'm very proud of that product and Stephen has knocked himself out, not only with what we call the 40 by 90, which is a big, oversized unit that we designed, but a lot of what we learned in designing that. Now we're taking to the actual unit built, and it's beautiful, it's going to be something to see, it's yeah, it's not your normal spec I try to tell people I'm like I want you to.

Speaker 1: 1:11:44

I think you need to understand how tall these are. That's something else it's like, and I think the best part is that the driveways are 60 feet yeah right, and so the big ones for where the rvs are and you're like you have to have driveways are 60 feet right, and so the big ones for where the RVs are and you're like you have to have driveways that wide because these units are 43 feet or whatever they are tall.

Speaker 1: 1:12:02

I mean that's four stories is what that is. And so you're looking at it going wait, hold on. This is a four-story building, but it's really three stories with a pitched roof. So you need to understand how, even from the second to third floor, the ceiling height is high. I mean, everything that's going to it's going to feel so much bigger than 3000 square feet. It's going to feel unbelievably big. And then even from, like looking out, I think what I loved when I was in my apartment in Nashville, cause I was on the 26th floor and just that view out the glass you know, is this amazing.

Speaker 1: 1:12:34

I can feel what that would feel like when you're on the second floor on your balcony right, where you open up the slider and you go out onto the balcony and you're like overlooking your big garage onto a 60-foot driveway and you're sitting there going like this is pretty high.

Speaker 2: 1:12:46

Oh yeah, because you're already three stories up.

Speaker 1: 1:12:48

It's huge, and then imagine being in the master suite onto your own private balcony of the master yeah, the master suite onto the the, your own private balcony of the master, near on the third story now, which will feel like you're on a four story roof building. You know, I hope my goodness gracious, this thing is really high. So when you actually think about it, it's this, this community is actually going to feel a lot bigger than 93 units.

Speaker 2: 1:13:08

It's. It's amazing and what I'd like to do when we ground break for that, I would like to have some of those pads at elevation and get one of those telescopic booms. We'll take people up to the balcony elevation so they can actually see what they'll see.

Speaker 1: 1:13:21

It's going to blow your mind. Give me a favor, go get your drone, go put it up, please, in the air and give me a 43. Well, no, what would you kind of? Where do you think your head would?

Speaker 2: 1:13:31

be. Well, that's the whole problem. You're going to be 43 minus 9.

Speaker 1: 1:13:36

Okay, so it's 35?. It's going to be more than that, it's going to be 44?.

Speaker 2: 1:13:40

Yeah, it's going to be 43 minus 15. Probably minus 15.

Speaker 1: 1:13:45

Because of the pitch, because of the pitch. Yeah, okay, so go down and do that.

Speaker 2: 1:13:51

Go, pop it up there and let's go. Dude, you got nothing to do.

Speaker 1: 1:13:53

I think we need. I want to see what that would look like up there. I think we have an idea. We kind of messed around. Yeah, that's wonderful, but it would be nice to see what that would look like once the gym goes up, because the gym's going to be up on top of the hill man.

Speaker 2: 1:14:04

I mean it's going to be huge, it's going to be gorgeous.

Speaker 1: 1:14:10

So the gym, I think, is going to set the tone for what people can really understand and believe, the type of finish work and the and what we're going to try to do ultimately with the residential Cause. Obviously the gyms can be built first.

Speaker 2: 1:14:22

Yeah, I think so. Listen, the paradigm brand is quality. It just is. I resonate with that because that's my life. I believe in quality. I think it's a standard that we all need to keep. It means something more than just's a standard that we all need to keep. Uh, it means something more than just building a product that people want, but build it well, give them a really good product. Um, you and I were having that conversation earlier about value engineering. Where does the liability of cutting a corner lie? It actually only goes to the final user. They end up inheriting whatever we skimp on. So our quality standard is high. We want to do a really good job, not only in our design but in our construction work, and a paradigms brand will just continue to move forward because of nothing else that we just build really great products yeah, no, I agree, and we were.

Speaker 1: 1:15:10

I like the the kind of rabbit hole we went down. You know, using hvac as a as an example trying to cut corners. You're going okay, well, we can go get a different brand, but if that brand goes out, we have to just scrap the whole thing.

Speaker 1: 1:15:21

And therefore, we were the ones that you know in in essence, insure it, yeah, and so, and we have to, we have to warranty it Right. So that's the problem that people I think okay, well, all either, most developers push that liability over to the end user they all do, because cheap means uh profit yep yeah and and.

Speaker 2: 1:15:41

While profit is certainly one of the most important things that we want to focus on, we can't do it at the expense of the end use well, you know, and and this, not everybody's got social media, so this is also a referral source area.

Speaker 1: 1:15:55

Your reputation is everything. So if you're cutting corners and people start talking oh, they're cutting corners over there, they're doing this, that's going to spread. So therefore your, your buyer's pool, is going to shrink it will and then you have more liability at the same time. It's really more risk to do it that way. I would rather build volume and take less margin, but protect protect the brand and protect all parties involved all that.

Speaker 2: 1:16:19

And if you have that attitude, you protect the quality of the product first and then your margin second. That always will result in a high quality product that people respect, and that just pushes you further down the road.

Speaker 1: 1:16:32

Well, thank you. So, dennis, I appreciate it, buddy, I don't want to take too much time. We have gone a perfect time, so I really appreciate it, buddy. I think we'll get a lot of feedback from this, because this obviously gets spread out to every one of our platforms, including all our existing clients, and if people have any questions, feel free to just respond back to whatever you find, whether it's a comment, dm, email, email and we will go into more depth.

Speaker 1: 1:16:53

Or if you want some of us to do this again and talk on maybe one one thing very specific, let us know. We try to cover a ton of ground and just kind of give everybody an overview of every the things we we were doing, uh, and try to see if you guys get some takeaways from it. So, dennis, thanks for joining me, buddy my pleasure.

Speaker 2: 1:17:07

On to the next one have a good.