Speaker Coe** ((00:00:02)) - - So Cameron Pratt, welcome to icons of DCA Real Estate. Thank you for joining me today.

Speaker Pratt** ((00:00:08)) - - Well, I'm honored to to be on your show. So thanks for having me.

Speaker Coe** ((00:00:13)) - - Thank you. So,, what I usually like to do is start with,, your current role. And,, also, I will mention that I interviewed your uncle,, Brian Folger, about two years ago. He set the stage,, with somewhat of the history of your company,, with his your grandfather and his father and how the Folger family came to Washington and all that. So we have that back story. So what I'd really like to get to is you and you know, how you came into the company and what you're doing now currently., and then we'll get into a lot more details later. But just talk about that now. What you're doing great for the firm.

Speaker Pratt** ((00:00:54)) - - , my current role is I'm the CEO of Folger Pratt and have been in this role for ten years and have been with the company for 20 years.

Speaker Pratt** ((00:01:02)) - - So,, about half of my tenure here has been as CEO. And,, it's, you know, it's been a it's been an interesting last ten years. It's been a good run for the last ten years. And now the last year and a half or so, we've,, we've, you know, we're kind of seeing what a cyclical industry feels like. So,, that's,, that's kind of where we are. And we can talk a lot more about kind of how we're dealing with that and how we're,, you know, adjusting and, and continuing to,, you know, to grow and take advantage.

Speaker Coe** ((00:01:32)) - - How do you define the role CEO at a firm like yours?

Speaker Pratt** ((00:01:36)) - - Well, I kind of oversee all I kind of set the strategic vision,, of the company,, and then kind of oversee all investing and operating activities. So I've got, you know, a C-suite of, you know, executives that report to me and I'm very,, involved in, you know, kind of setting, like I said, setting the strategy of of what kind of deals we're going after or what markets we're going to we're going to be active in.

Speaker Pratt** ((00:02:03)) - - And then I'm very involved in capital raising,, and interfacing with investors,, and kind of marrying, you know, real estate investment opportunities with capital. So that's kind of,, the role I play at Folger Prep.

Speaker Coe** ((00:02:19)) - - Company is a family company. And you report you report up to your uncles and father, I assume, since they're on the board with you. So, yeah.

Speaker Pratt** ((00:02:28)) - - It's it's been an evolution., and, and, you know, family businesses are interesting and, and,, they have some incredible benefits and they have some,, you know, some serious danger zones as well, you know, and so I think, I think we have been we've tried to be extremely careful and,, cognizant of the, the, the downsides of family businesses. And, you know, quite honestly, if you look at,, you know, very few businesses last through a second generation, very few family businesses do. And,, you know, when I was in business school, I took a class called managing the Family business.

Speaker Pratt** ((00:03:10)) - - , scared me to death. I can I can talk more about that later, but.

Speaker Coe** ((00:03:13)) - - But some of the.

Speaker Pratt** ((00:03:14)) - - Things that some of the things that that that,, family kind of families and business class pointed out was,, you know, the dangers of a family business and why most family businesses fail. And so that's something that we've had we've tried to have eyes very wide open about. And,, and I think we've done a good job of managing through those things. So yes, my, my dad and my two uncles who were kind of the generation two of the company,, they continue to be on our board of directors and on our investment committee. And so,, I certainly am accountable to them and, and the other members of the board., but,, yeah. So that's that's,, we try to balance all those things.

Speaker Coe** ((00:03:54)) - - Yeah. Well, when we talk a little later, I'll share some of the other experiences I've had with other family office,, interviewees I've had, particularly the family, the Peterson family, and,, a few others as well.

Speaker Coe** ((00:04:08)) - - Yeah.

Speaker Pratt** ((00:04:08)) - - So we know we know them both those families very well.

Speaker Coe** ((00:04:11)) - - Yes.

Speaker Coe** ((00:04:12)) - - So let's go back to your personal history., Cameron, talk about, you know, where you grew up and,, your how you were raised and all that here.

Speaker Pratt** ((00:04:21)) - - Yeah, I was born right here and,, at Georgetown University Hospital in Washington, DC, and grew up in Potomac, Maryland. And,, so, you know, grew up in the area, grew up,, you know, being very familiar with the family business. And, you know, my dad kind of ran the construction division of our business and so many Saturday mornings after a, you know, soccer game, I'd be, you know, in the back seat of the car going to visit construction., so I it was very I was very aware of the business. When I was in high school, I worked on some of our construction projects,, you know, for summer jobs, that kind of thing., and then I went off to college,, at Brigham Young University in Utah.

Speaker Pratt** ((00:05:06)) - - , I tell people I'm, I'm Mormon and I love to ski. So Utah was was kind of a natural fit. And I was a civil engineering major at BYU., I took two years off after after my first year of BYU. I took two years off as as many,, young men do in our church to serve a mission., and interestingly, I think given the current events,, I this is 1993 to 1995. I served my mission in Kiev, Ukraine. So,, really? Yeah. So I,, so this the last, you know, the events of the last two years there have,, struck, you know, very close to my heart. And I still have friends in Kyiv that I'm in touch with. And so anyway, that's, that's a, that's a whole other conversation. But,, so I took a few years off,, to, to do that. Return to BYU. Finished my degree in civil engineering., never intended to work as a single day as a civil engineer.

Speaker Pratt** ((00:06:00)) - - , just thought it would be a good background for a career in real estate., and from BYU, I went,, to, I worked on Wall Street., I was, I worked at Morgan Stanley for two years and their real estate investment banking group, which was also kind of co-mingled with their real estate,, private equity investing, which is called measure F back then. So I worked there for a couple of years,, and then went to business school at Harvard,, which is where I took the, the class that I mentioned a little bit earlier on,, managing the family business. And interestingly, I was kind of always planning to come join Voyager Pratt after business school. And I took that class the first semester of my second year of business school., it absolutely scared me to death about family businesses and,, and I, you know, started calling my dad and my uncles as I was taking that class saying, hey, wow, have you guys, you know, thought about this issue? Have you thought about that issue? Because every you know, Harvard has a case study method for for teaching.

Speaker Pratt** ((00:07:00)) - - And every class I'd go to every, every, you know, every,, you know, every time we'd have a class for managing the family business, the case study, it followed the same narrative. You know, the arc of the story was always the same, which is entrepreneurs found business highly successful, brings in children. Fast forward 15 years. Business goes bankrupt. Nobody speaks to each other like that. That was that was the arc of almost every family business story. And so and every, you know, and there were always for different reasons in every case study kind of pointed out a different problem with family businesses. And so it really opened my eyes to the challenges of a family business. And so I called my dad and my uncles and, and kind of said, hey,, you know, if you guys considered all these things and, you know, the reality is that thought about those issues, but they're complicated issues and they're sensitive and they're hard to talk about. And so they had not really addressed any of the issues.

Speaker Pratt** ((00:07:56)) - - , and so I, I kind of said, well, you know, I'm, I'm probably not interested in coming to work for Folger Pratt., granted, they hadn't offered me a job, but,, but I, you know, I let them know that this was probably something I wasn't interested in coming to do, given the, you know, the challenges family businesses face. And so and the fact that they hadn't really, to that point, done any real planning around those issues.

Speaker Coe** ((00:08:21)) - - Well, let's let's stop for just a moment. I want to know, because your family is unique. Well, not unique. I mean, there are a lot of Mormons, but I'm just going to say that. There's a culture there that's different than most families, you know, I mean, most that and Bryant talked about it when we talked.. And there's a closeness and there's a tradition of, you know, Monday dinners and all the things that you have in your religion that. Are unlike most business family businesses, I think.

Speaker Coe** ((00:08:55)) - - And I may be wrong, but I really believe that your faith adds a little tie that that other families may not have in the business setting. Am I wrong with that?

Speaker Pratt** ((00:09:06)) - - I would like I would like to think that you're right,, that that you know, that our faith, you know. And look, our faith isn't that at the end of the day, not that different from many other people that have deep faith., but but, I mean, I would say the Mormon faith does put a particular emphasis on family., which which is important. And I do think that that,, really has helped keep our family close. But that being said,, there are lots of examples of families that had, you know, were very strong in their faith, whether it be Mormonism or Catholicism or, you know, Buddhism or, you know, pick your right faith,, that, you know, that are in business together and end up, you know, going the way of most family businesses.

Speaker Pratt** ((00:09:54)) - - So I would I would say that, yes, on the, you know, on the margins, our faith has probably helped in, in kind of the way we've,, stuck together, but,, but but still, I think that looking at those family business issues with eyes wide open about why most family businesses don't succeed was important to do. And so,, and, you know, respecting that, you know, when I was at school taking this class, I called my dad and uncles and said, listen, you guys really need whether I come to work with you or not, you guys really need to focus on these issues. And to their credit,, this was the the winter of,, 2003., they dropped everything, and they were in the middle of some big projects., they kind of dropped everything. And they came up to Harvard for a week and participated in a week long executive education course on families and business. And I would say that was kind of a real turning point in the history of our company, really.

Speaker Pratt** ((00:10:50)) - - Yeah. I mean, I think they left that,, they left that week kind of recognizing that if they wanted this business to outlast them,, they really needed to start thinking of it as a enduring enterprise rather than just,, a collection of real estate deals. And I think to, you know, prior to that, they had really kind of each been project managers that they go out and they put a deal together that execute it. They kind of stick it on the shelf, so to speak, and try to go out and do the next one. And they came away from that saying, wow, we've got some family business issues that we need to think about. But even before we get to those things, like we need to think about a company culture and a mission statement and, you know, setting up an organization that is going to be enduring rather than just, you know, be a means to do a bunch of real estate deals. And so they came back. They worked.

Speaker Pratt** ((00:11:44)) - - They worked on that. They hired the,, the the professor from Harvard had a consulting business around this., they hired the Harvard,, that consulting firm to kind of help them. And after they'd been at it for about a year and a half, I had gone. I graduated from school, gone out to California to work for. I worked for Clark Realty Capital, actually, another local DC, sure, but I worked for their,, their office out in California., and after about a year and a half,, my dad and uncles called and said, hey, you can see we're really serious about focusing on succession and planning and all this kind of stuff. It would really be helpful if you were here to kind of represent the next generation and thinking about all this. And so at that point in,, kind of the end of 2000 and 2004, I,, I moved from California back to DC and,, enjoying Folger Prep. So that's kind of that was my that's kind of my brief history of how I, what.

Speaker Coe** ((00:12:37)) - - Specific aspect of that course scared the heck out of you the most. Just out of curiosity.

Speaker Pratt** ((00:12:43)) - - Well, I think that,, you know, you pointed out earlier how how,, in our faith that, you know, family is really important. And what I saw from all these things was, look, you know, I did not want business issues to drive a wedge between me and family members, because to me, family is more important than business. But that doesn't mean that that you always sacrifice the the the, you know, the priorities of the business to take care of family., when you do that, your, your business goes bankrupt. And so of course, so, so kind of the main mantra of that class is you treat your family like a family and you treat your business like a business. That's really easy to say. It's really hard to do. And so,, and so that's, that's kind of, you know, I, I wanted to make sure that there were clear guidelines about how to treat family like family and business like business.

Speaker Pratt** ((00:13:36)) - - , and everybody had buy into those things,, before I came and joined because I didn't want to sacrifice a career just to make everybody feel good in the family. And I didn't want to,, you know. Come to business, prioritize business, and alienate family. It's a it's a very tricky balance to strike. And so I you know, I wasn't ready to come to the, to the company until I had, you know, I, I believe that everybody was kind of on the same page and trying to strike that right balance.

Speaker Coe** ((00:14:07)) - - So you probably have not necessarily in writing, but a clear understanding, you know, face to face with all the family members, how far you can push on certain decision making and things like that, I imagine.

Speaker Pratt** ((00:14:19)) - - Yeah. And I tell you, and it is in writing, we actually put a family constitution together. We really. Oh yeah. Yeah. I mean, it was it was very it was a very deliberate, multiyear process with, you know, these Harvard consultants that really helped us kind of guide best practices and, and, you know, and it's it's something that evolves.

Speaker Pratt** ((00:14:37)) - - I mean, it's just like a business strategy. It's it's always evolving. And new situations cause you to have to rethink things. And so it's it's an evolution. But I would say the most important thing is that the principles are, are kind of being adhered to, which is try to treat your family like family, your business like business and, and and try to have some, you know, separation between the two recognize kind of how they complement each other and, and how they also need to be kind of treated in isolation. So that's, that's.

Speaker Coe** ((00:15:10)) - - So other than that course at Harvard Business School, what else did you pick up from that? You know, that to your education that's helped you today and your and your strategic planning and, you know, guiding the firm.

Speaker Pratt** ((00:15:24)) - - , interesting question. I mean, you know, obviously there's a lot of, like, technical, you know, you know, technical skills, I guess that you study there., I'm not sure how much of the the technical skills really, you know, stuck with me.

Speaker Pratt** ((00:15:39)) - - I'd say a lot of the soft things,, you know, kind of stuck with me more or were more impactful on me. You know, I'd worked on Wall Street for a few years before business school, so I kind of had the, you know, I had a very solid financial analysis, kind of,, training. So I didn't really, you know, we took some finance classes at Harvard, but I felt like I had really already gotten exposed to a lot of that., but I would say on the soft side, one of the, you know, the, the most important skills that I gained was, you know, you're sitting in a, in a class of,, you know, your first year, you're in a section with, call it, you know, 80 people plus or minus,, and, you know, you're convinced that you're the dumbest person in the room,, and your grade, at least back then,, there were no tests., there were no papers, no projects.

Speaker Pratt** ((00:16:31)) - - It was 100% based on your participation in class. And so,, you had to come prepared and probably more importantly,, you had to learn the skill of,, of being called upon at the right time and making a comment that was intelligent and moved the conversation forward., you couldn't you couldn't just have a pre-written kind of comment to make that you just raise your hand and make it out of context. You had to stay in the flow of the conversation. And so it forced you to think on your feet, respond to the people that are talking to you. And and I think I learned,, you know, you learn kind of the skill of what to say as much as the skill of what not to say and when to keep your mouth shut and when to weigh in and when you weigh in, it better be meaningful or,, you know, or people are going to ignore you. You're not going to get called on again. So I think that, I think that that,, it's intimidating, but it also helps you develop a certain amount of confidence,, in terms of, you know, just kind of being in those higher pressure situations and,, you know, and knowing how to make impactful comments.

Speaker Pratt** ((00:17:48)) - - I'd say so. I mean, that's just one example of kind of a soft skill that I think,, you know, help me. And, you know, you gain a lot of confidence in being in a rigorous environment like that and, you know, measuring up to people around you that you or, you know, you're that are pretty impressive. So,, it was it was a great experience. I had a great, wonderful time there.

Speaker Coe** ((00:18:09)) - - So you that experience has to have given you kind of the qualifications to some extent based on the rest of your family to, to more or less take the leadership role of the firm. Was that kind of part of the decision making?

Speaker Pratt** ((00:18:24)) - - oh. As you grew up, I mean, I I'll do.

Speaker Coe** ((00:18:26)) - - The group chat.

Speaker Pratt** ((00:18:27)) - - And I'll be I mean, I had a great experience at Harvard, but I'll be the first one to to admit that, you know, a degree from an Ivy League school is it's just a it's just a degree at the end of the day and, and,, that it doesn't it doesn't give you any right to anything.

Speaker Pratt** ((00:18:44)) - - , you know, in a lot of ways, it's so early in your career, it's not even a good measurement of your ability., and so I, I well, I had a wonderful experience there. I don't put any,, stock or credence in the fact that, you know, I've got a degree from a prestigious school. It's kind of,, what I tell people that because I get people calling, you know, younger people now calling about, you know, advice for applying to business school and stuff. And what I tell them is it will help you get your first job out of business school after that. If you if after that, it's all up to your performance. Like your degree is not going to help you one bit if you're not performing well. So don't put too much stock like a degree from one of the schools is not a,, you know, it's not a guaranteed the lifelong financial success. It will help you get your first job. That's it.

Speaker Coe** ((00:19:35)) - - That's my also helps with your network, too.

Speaker Pratt** ((00:19:38)) - - It does help.

Speaker Coe** ((00:19:38)) - - Let's let's add to that. Yeah.

Speaker Pratt** ((00:19:40)) - - That's true. I made a lot of great friends there that I've actually done a lot of business with over the years.

Speaker Coe** ((00:19:46)) - - Yeah. And a lot of people move around based on your relationships from that as well. But yeah., so how did your family help you in the business and what was your initial role and how did it was it determined that you would be the eventual leader? Talk about how that happened and how you grew within the firm.

Speaker Pratt** ((00:20:04)) - - A little bit. Well, I will I will be the first to admit that,, nepotism is a real thing. And,, you know, I got hired,, you know, probably, you know, they could have they could have hired other people that were just as qualified as me., I think that,, that when you have a certain level of trust, trust goes a long ways. And so while they could have probably hired someone equally or even more qualified than me to do what I did,, there was there was a level of trust that,, that, you know, kind of put me in a position where, you know, I was able to excel faster in an organization because of that trust level.

Speaker Pratt** ((00:20:40)) - - , and so, you know, when I got hired, Fulcher Pratt was a pretty small company., I think there were two people in the development team,, and,, you know, one of them was a cousin that was an intern at the time, I believe. So, like, it was a it was a pretty small group. And I remember my first day,,, you know, and back then there was like, Folger Pratt Construction was one company, and Folger Prep management was another company. There was no kind of like overarching holding company. It was kind of all these different things. And I remember, you know, I needed to order business cards. And I said to my uncle,, you know what? Like, I don't know, what should I put down for my title? And he goes, well, I don't know. What company do you want to work for? Like, you know which one? I mean, it was, you know, there was there was not a lot of structure back then.

Speaker Pratt** ((00:21:26)) - - , and so, you know, I mean, when I initially started, I, I took over kind of running a couple of smaller medical office building development deals that,, that, that a colleague had had been running and he was getting ready to retire. And so I kind of took those over. And then and then my role just kind of evolved. There was no there was no plan on how my role would develop., I am the oldest of my cousins,, that whose fathers were in the business., so so there was some, you know, I, you know, had a head start,, so to speak. But,, you know, but I my role just kind of evolved, and, and I just took on, you know, I saw it. I saw a need. I'd step in and and get involved in it., and, you know, then I'd go find deals. And, you know, before I joined Folger Pratt, you know, we had done a lot of,, we'd done a lot of partnerships with other developers, but,, we had not we had not really had institutional capital partners.

Speaker Pratt** ((00:22:26)) - - I mean, there was one project back in the 80s where we had,, a institutional capital partner. But, you know, in the recent couple of decades, we hadn't. And so,, you know, having worked on Wall Street and been familiar with that kind of limited partner, institutional investor model,, we started, you know, I went out and found some deals and brought some institutional capital in and,, and, you know, started doing different deals that were done. I think when I joined Folger, we had done one multifamily deal., not too long after I joined, we hired,, an executive named Dick Knapp from,, Kettler who, who helped us kind of, you know, plow into the family and in a more meaningful way. And,, so we started doing different types of deals and different types of capital structures. And so my role just kind of, you know, evolved over time., it wasn't kind of predestined or, you know, it was not not totally clear, but,, it just kind of evolved as I kind of took on more.

Speaker Coe** ((00:23:25)) - - So you were a deal guy to start with and then eventually took on more responsibilities with regard to management and, and other aspects of the company. Yeah.

Speaker Pratt** ((00:23:34)) - - That's right. And back when I started, you know, if you did a deal, you were by default the asset manager of that deal,, got it into perpetuity. So I was dealing with the full lifecycle of these projects,, you know, from, you know, from beginning to end. So,, so I had a pretty well rounded experience,, base from kind of sourcing and deal sourcing capital, executing the, the entitlement design, overseeing construction and then kind of lease up, you know, property management, asset management, refinancing. I was kind of involved in the whole lifecycle of the deals,, in those first many years, which gave me a pretty broad exposure. To the whole business.

Speaker Coe** ((00:24:17)) - - That's great. Yeah, that's that's a great way to learn. Yeah., so. Talk about how this company is growing.

Speaker Coe** ((00:24:25)) - - You said it was a small company to start with.. How did it all evolve? I mean, how did it grow to. To where it is today? And what was the strategy? Strategic thinking as it as it grew.

Speaker Pratt** ((00:24:38)) - - Well, I mean, I think that there, you know, I mean, you know, when I joined Folger Pratt, I believe that,, 100% of our we might have had one asset outside of Montgomery County, Maryland, but but the vast majority of the portfolio was in Montgomery County and in Montgomery County. There was the significant portion of our assets were in Silver Spring, Maryland. And, you know, Folger Pratt had been pretty prolific in that market., right. And so when I joined, it was I think the company was extremely focused on hyper local Montgomery County kind of,, focus and,, you know, and it was mostly office,, some retail and then one multifamily project, all in Montgomery County. And so I started looking, you know, in the district and in Northern Virginia to kind of just have a little bit more of a regional diversification,, like I mentioned a minute ago, started sort of bringing on some institutional capital for, for multifamily deals, which typically required a little bit more upfront equity than, than the office deals that we'd done historically.

Speaker Pratt** ((00:25:44)) - - , and so, you know, it just kind of,, evolved. I wouldn't, I wouldn't say there was a lot of, you know, high level strategic planning other than I felt that we needed to be more diversified geographically within the DMV and also by product type. And so I think early on, for the first ten years I was at Folger Pratt, I was more focused on,, diversifying by product type in the DC metro area., and then and then, you know, when I became CEO ten years ago, I spent about the first year trying to decide how we would would kind of capitalize our growth. We had a pretty big development pipeline at the time., and we had to figure out how to capitalize the growth. And so we had, you know, I looked at everything, I looked at raising a fund, I looked at programmatic joint ventures. This was back when JBG was kind of doing their New York REIT thing that then evolved into, you know, so there was some like public company, you know, ideas.

Speaker Pratt** ((00:26:45)) - - There was some,, you know, some, you know, raise a fund,, like, you know, several of our competitors were doing,, and I spent a year meeting with everybody, you know, that I could,, getting as many insights as I could going to New York every two weeks to talk to different capital providers. And at the end of that year, I kind of came away with a couple of of key takeaways. And the first one was that I actually did not want to raise a fund, because what I didn't want to do is to be put in a box by an investor., and, and I think at the time, had I tried to raise a fund, you know, we had a we had a great track record, we had a big pipeline. We were, you know, DC development, you know, and I think I could have raised a fund, but I would have been the fund would have been a DC metro area development fund, and that would have been very confining.

Speaker Pratt** ((00:27:35)) - - , it would have been great because we had a lot of capital and we could have done a lot of deals. But I kind of had the takeaway that, look, we are in a very cyclical business,, and different product types,, you know, work at different times and different markets are in favor and out of favor at different times. And I did not want to be put in a box and be defined as a Washington, DC area development company. So I knew that at the time, if we'd raised a fund, it would have we would have been very confined to that strategy., and then the second reason I didn't want to raise a fund is I did not want all our promotes cross collateralized. I saw that one bad deal can take down the, the promote for an entire fund. And I did not want that. I didn't want to have to do that. I wanted to have more diversity. And so I would say my my overall takeaway from that year of exploration was we need diversity of, of of strategies and product types, and we need diversity of markets,, that we are in and we need diversity of capital sources.

Speaker Pratt** ((00:28:38)) - - And so I spent you know, I've spent the last ten years trying to do those things, get more experience in different product types, different investment strategies, expand into different markets around the country, and have a wide range of potential capital partners that we could go to. And,, you know, I certainly won't declare victory because,, while we've made progress, I feel like there's still a very long ways we need to go. But,, you know, over the last ten years, we've expanded into several markets around the country. We've got an office on the West Coast, an office in Carolinas. We've done deals in Texas. Utah., right. We're doing we're you know, we're doing development acquisitions., we've done some, some other kind of, you know, unique strategies and working on several more right now. And,, so I feel like we've, we've done a good job of expanding into different. Markets, expanding into different product types. And and then, you know, on the capital side, we've got a whole host of big institutional investor relationships.

Speaker Pratt** ((00:29:41)) - - , and then we've got a bunch of family office relationships. And then we have worked really hard on building a network of direct retail and,, you know, kind of a direct retail investor network., and then we've actually supplemented that by,, by raising capital on Crowd Street, which is, you know, an online. Oh, sure., platform. So we really run the gamut in terms of,, our kind of access to different capital sources. And I'll say, you know, there are times where,, you know, the the big institutional investors are not investing. They're out of the market. Right., and there are other times when the the retail investors are not in the market, and it's it is served us very well to have access to, to both ends of the spectrum from a capital standpoint. And so, you know, that's something that, you know, I continue to work hard on all of those initiatives, you know, you know, diversified geographically, diversified by product type and investment strategy and diversify, diversify by capital source.

Speaker Pratt** ((00:30:42)) - - And I think there's a very fine line between being a jack of all trades, master of none,, which I, I don't want to fall into that bucket., but also having a broad base of,, investment opportunities and capital sources,, so that you have a diversified business that can withstand the cyclicality that's inherent to the business world.

Speaker Coe** ((00:31:06)) - - Can you talk statistically about your firm a little bit?, the scale of what it is now and the markets you're in and and then beyond that, why you're in those markets, if you could. Sure.

Speaker Pratt** ((00:31:18)) - - So we have our, you know, our own portfolio today., you know, I don't think anybody knows what values are right now. But, you know, I'd say in the, in the, you know, range of $3 billion,, portfolio,, of, you know, stuff that we own and operate., we have a, you know, a development pipeline of, of land,, that we control,, some of that we own, some of that.

Speaker Pratt** ((00:31:43)) - - We have like, long term options are on, you know, a variety of different ways we control land. But, you know, our total development costs to build out that development pipeline is probably another $3 billion., is any of it financed today? No., almost none of it's but Ansible today. But that's okay. We,, you know, we control it and we're pretty careful about how we control land., and so we don't have, you know, a ton of land loans. We have we have a few, but but nothing that we can't manage., and so, you know, we've got a big development pipeline and then,, you know, and then we are, you know, we're actively buying,, properties. And I think, you know, for the next couple of years, there's going to be way more opportunity in acquisitions than there are in there will be in development. So,, you know, that's a little bit of a shifting focus., so that's, you know, that's order of magnitude, kind of, you know, the size of our firm.

Speaker Coe** ((00:32:37)) - - Okay. So you've completed many landmark projects in the area. And Bryant and I talked about a, you know, a couple of the large ones, the NOAA project in Silver Spring and, and, you know, this retail with the Peterson companies and then your Park Potomac project that you're sitting in in Potomac, Maryland. Yeah., and several other, you know, large multifamily project in here in the DC area. You now have several large projects, including West End, Alexandria, The Accolade, Downtown Washington, Tysons Central and Tysons Corner, and several other mixed use, perhaps overview those and others in the region of note, please infuse your site selection criteria and how you differentiate yourself among other developers, if you can.

Speaker Pratt** ((00:33:24)) - - , that's a good question. I mean. Site selection. I'll kind of, you know. Kind of zoom out for a minute. Sure. You know, in the DC metro area., it's a very interesting market to work in because we have three distinct jurisdictions. We have Virginia and DC.

Speaker Coe** ((00:33:46)) - - Absolutely.

Speaker Pratt** ((00:33:47)) - - Jurisdictions. We have different counties, and they all have very different personalities. And, you know, our history has been,, you know, like I mentioned earlier, we're hyper focused on Montgomery County, Maryland, because that's where we live. Our offices were, and that's where we found a lot of opportunity in the 80s and 90s., Montgomery County, Maryland has become an increasingly difficult place to do business. And,, and I would say that, you know, we have a couple of,, existing sites that we own in Montgomery County, and we'll build those out as time permits. But,, but our, our the vast majority of our focus,, for development and investment going forward in the, in the DC metro area will be in Northern Virginia because of just, you know, the business friendly nature of of Virginia versus Maryland., and that's where job growth is. And at the end of the day, you know, real estate ties back to to where people want to live and people, you know, historically, this is obviously changed since the pandemic a little bit.

Speaker Pratt** ((00:34:52)) - - But,, where people live has a lot to do with where their jobs are. And,, you know, and, and Northern Virginia has been a job creator., and, and that has not been the case in, in Maryland as much. So,, you know, so I would say from a macro level,, you know, the different jurisdictions have differentiated themselves and, and, look, this is not an opinion unique to Folger Pratt., ask any developer or investor in, you know, in the area and they'll tell you the same thing. And when you look at property values, it translates to property value to I mean, a multifamily property is just more valuable in Northern Virginia than it is in suburban Maryland. Just the facts don't lie. And that comes back to public policy. And, you know, if I've learned one thing from the pandemic,, I would say my biggest kind of overarching takeaway from the pandemic is the public policy matters. And you just look around the country at how the public policy at different cities and what has happened economically to those cities and public policy matters.

Speaker Pratt** ((00:35:58)) - - And that's not a political statement. I'm not not making a political statement. I'm just saying public policy matters. And,, and, you know, we we we have to invest where we believe,, we can make money and, and more and more. That's having to do with public policy.

Speaker Coe** ((00:36:17)) - - You mentioned Maryland and Virginia, but you didn't really talk about the district. So let's you are invested in the district and you've been involved in not only,, a major office to residential deal, but you're just announced recently., well, it's under construction now. A large affordable housing project in northeast Washington, too. So talk about those projects and other ones in D.C. that you're focused on.

Speaker Pratt** ((00:36:46)) - - Yeah, I mean, we've we've done a lot in D.C. over the past 5 or 6 years., and, you know, DC's you know, I mean, look, I think that urban cores all over the country are reeling after the pandemic., Washington's no, no exception. I think Washington has been particularly disadvantaged because the federal government has been extremely slow to ask people to return to the office.

Speaker Pratt** ((00:37:10)) - - And, and when,, you know, when they have come out and said, hey, federal workers need to get back to the office, one senior,, federal administrator,, told me it's a don't ask, don't tell policy,, which, you know, and when you go downtown, it's it's pretty clear that,, the district is being really impacted again because of policy question., it's not the you go to Dallas, you go to, to, you know, other,, more business friendly states., and, you know, their downtowns are much more vibrant.

Speaker Coe** ((00:37:45)) - - It's a political issue that it's it really simple. It's because the unions. Yeah. Government unions.

Speaker Pratt** ((00:37:51)) - - Look, I'm not going to, you know, I mean, I think that,, you know, Mayor Bowser has has been pushing very hard to get federal workers back. You know, that that's my criticism is more with the federal government not being I agree, you know, not not with our DC, you know, local leadership.

Speaker Pratt** ((00:38:08)) - - , so, you know, I mean, look, I mean, I think DC has been trying to do a lot of things, right., I think,, Mayor Bowser's push for more affordable housing is absolutely, you know, the right thing to do. And we're very supportive of that. And we're trying to participate in helping that effort. And we are, as you mentioned,, just finishing up a large affordable housing project in northeast., you know, that being said, you know, it's it's tough when,, people don't feel like they need to live downtown anymore and pay higher rent because they don't have to go to the office. So that's a real challenge on our multifamily,, properties downtown. And we've seen that,, you know, there's been a lot of supply that's come in that's been made it hard to push rents when the demand is dropping off because people don't feel like they need to live downtown. So it's it's challenging., and certainly, you know, public policy is part of that.

Speaker Pratt** ((00:38:58)) - - Part of it is just, you know, the effects of Covid and and the aftermath of that. And so,, you know, we're not seeing that as much in the suburbs., you know, Virginia's more of a suburban market than an urban. And and so I think that has also kind of played in, in Virginia's favor.

Speaker Coe** ((00:39:13)) - - , so the accolade project, is that coming on board soon?, as far as,, leasing?

Speaker Pratt** ((00:39:21)) - - , no, that's, that's still,, about a year out from being complete. Yep.

Speaker Coe** ((00:39:25)) - - Okay. So you won't start leasing that until early 25 or so. Correct?

Speaker Pratt** ((00:39:29)) - - Yep.

Speaker Coe** ((00:39:30)) - - Got it. Okay., the West End Alexandria project is an interesting one that,, maybe you can talk a little bit about that being the former Landmark Mall and how your new joint venture partner there, it's a very interesting project. So maybe you can highlight that a little bit. Yeah.

Speaker Pratt** ((00:39:48)) - - So there's an interesting backstory on that. When I was 16 years old,, just got my driver's license and I could have my first summer job that I could drive myself to.

Speaker Pratt** ((00:39:58)) - - And,, my first summer job back in, I guess this was 1980,, 88 or 89., I worked as a construction laborer on the renovation of Landmark Mall. Really? Because the the general contractor on that renovation was Folger Pratt., just as it just as a as a contractor, as a construction company., and so it was it was kind of interesting, full circle. Fast forward, you know, 30 or so years,, to being involved in,, you know, in, in putting together partnership to redevelop the mall. And,, so that was kind of fun to go back there and, and be able to,, look at the, the internal courtyard water fountains that I, that I worked on as a summer construction laborer 30 years ago. And getting to watch them get demoed,, was kind of full circle. But, you know, that project is, is is interesting., you know, it's a it's a very long story, which I won't go into all of it, but,, you know, the efforts to redevelop that have been going on for well over a decade.

Speaker Pratt** ((00:41:00)) - - And,, there were some incumbent landowners,, Howard Hughes Corporation,, owned the mall and bought out some of the out parcels storage, which was a spin out of Sears., they owned their Sears store. Both of them wanted to be part of a. Development. They were they were having some,, you know, some issues kind of getting on the same page in terms of a vision., then there were some kind of strategic changes at those companies that gave Folger an opening to be able to come in. And we had kind of relationships with, with,, you know, with both companies,, indirectly. Well, directly with heritage and directly with Howard Hughes. But we were able to come in and present a vision for the property,, and, and convince everyone that we were the right team to kind of be the leader in terms of pushing forward this development., and we were able to convince both Heritage Heritage and Howard Hughes to contribute their land to the partnership that we would come in and and be the managing member of and, and push forward the, the redevelopment.

Speaker Pratt** ((00:42:02)) - - And so, you know, we had strong relationships with the city of Alexandria, with Inova, which was a critical piece of,, of the project to get Inova to come in and decide to rebuild their, you know, their well, to build,, a new,, hospital,, in Alexandria., and, and so, you know, we just had kind of the, the relationships and the experience and the track record to be able to bring a lot of disparate parties together to get something done that had been stalled for quite a while., so we're we're very excited about the project. It's it's well underway. And,, we think it's going to really transform the west side of Alexandria.

Speaker Coe** ((00:42:39)) - - So you're gonna have a hospital talk about what other real estate aspects are a part of the deal.

Speaker Pratt** ((00:42:46)) - - So there's a,, you know, a Nova's building, a hospital that, you know, order of magnitude, 1,000,000ft² about, you know, $2 billion of total cost. I don't know the exact number, but it's in that, you know, in that range, I believe,, and it's going to be an incredible anchor.

Speaker Pratt** ((00:43:01)) - - I mean, it's going to be an incredible,, public asset for for Alexandria,, you know, a world class hospital., I'll get I'll get in trouble if I start naming the trauma level because I can't remember what it is, but it's,, it's it's it's a significant,, investment on the part of Inova to really bring world class health care to Alexandria. And, you know, the current Alexandra Hospital is is,, is in need of significant,, you know, kind of physical repair. And so they made the decision to start from scratch and build at a better location and, and really bring world class hospitals. So that's, that's really the anchor of the project. And we're just thrilled that Inova is partnering with us to, you know, to push this project forward., and then we're going to build a few thousand units of multifamily,, a few hundred, a few hundred thousand square feet of retail., we've got a component of townhomes that are for sale,, that are, that are, you know, going to be built and for sale.

Speaker Pratt** ((00:44:02)) - - We're going to have some workforce housing, some affordable housing, a senior care building,, fire,, firehouse,, city of Alexandria,, firehouse., so and then and then there's, you know, a couple acres of public parks and open space,, and, and we've got some really exciting parks planned and some great public amenity space. So, I mean, it's going to be a very dynamic,, really well designed, wonderful project. And, you know, to to put together, you know, a project, a 4,000,000 square foot project,, that only has about 80,000ft² of office., because, you know, office is not something that's financing all these days. And it used to be in these big mixed use projects. Office was your anchor that brought daytime traffic to the project, which would help your retailers,, be viable. Well, that that's not really a viable business plan anymore. And so to be able to get Inova to come and build a hospital of this size with, you know, I think the the latest number I heard was, you know, 3200 full time employees and obviously, you know, patients and visitors and all of that.

Speaker Pratt** ((00:45:07)) - - I mean, it just brings a tremendous amount of,, of traffic to the property for daytime traffic, which is just critical for retailers success., and then obviously all the, the multifamily there will, will provide the nighttime population., so, so we're really we're really excited about it. And, and even, you know, in this, in this time where,, you know, it's very difficult to underwrite development deals. We think that this project is so unique and is so transformative that,, we're very confident that we will be able to attract the development capital. We need to, you know, go vertical., you know, starting later this year on on the first phase of the project, the hospital is going to break ground,, in just a few months, and we'll be great.

Speaker Coe** ((00:45:52)) - - Yeah. So are you going to have you're not going to have,, medical office there?, yeah.

Speaker Pratt** ((00:45:57)) - - Or the office that I referred to is medical office. So it's not all medical.

Speaker Pratt** ((00:46:01)) - - Yeah, yeah.

Speaker Coe** ((00:46:02)) - - Do you think 80,000ft² is enough for medical office for that.

Speaker Pratt** ((00:46:06)) - - Nova's building, some medical office that they will, that they will own as part of the hospital. And we're building one medical office building next door to the hospital.

Speaker Coe** ((00:46:15)) - - So they're. You shouldn't have any demand issues. Well, I wouldn't.

Speaker Pratt** ((00:46:19)) - - Say that's the plan.

Speaker Coe** ((00:46:21)) - - Right, right. So you did say office is difficult. So I'm going to pivot to a major office project that you have underway. And that's Tysons Central. Talk a little bit about that project, how it's doing as far as lease up and, you know, the rationale for why you did it in the first place and then how it's evolved from there.

Speaker Pratt** ((00:46:42)) - - Yeah, I mean, we this was several years ago and we had yes, had been very active in building multifamily. And,, you know, the office market was still perfectly, you know, viable back then. And, you know, I looked around and said, man, you know, Folger Pratt's got this long history of office development.

Speaker Pratt** ((00:47:00)) - - We haven't done one in a few years., I don't want to atrophy in, in our, you know, skill set with office development. Let's look around D.C., let's find what we think is the best office development site in the whole DMV. And let's, let's, you know, let's try to let's try to do an office deal. So we looked all over the place,. You know, and we came to the conclusion that Tysons was,, you know, a great office market,, just given given its access to transit being halfway between our two major airports, right on the Beltway, you know, Silver Line to just expanded out,, through Tysons, you know, Beltway Toll Road 66. It just has a lot of, you know, transportation access., you know, not everybody loves Tysons, but,, you know, their track record of leasing large blocks is pretty impressive. And and the number of, you know, large scale corporate headquarters that are there, pretty impressive.

Speaker Pratt** ((00:47:52)) - - And and it's, you know, it's convenience to,, you know, to where the executives live,, convenience to where there's more affordable housing,, you know, great school systems. I mean, there are a lot of reasons that,, you know, that a lot of corporations have decided to locate in Northern Virginia and Tysons specifically. And so when we decided Tysons was an area, we wanted to focus again, back to Northern Virginia, job growth, business friendly environment., we looked around Tysons and decided,, that, you know, the location where we are was the best. It's right next to, you know, what Meridian had done at the borough. They just brought in a Whole Foods, a bunch of restaurants, a movie theater. So the amenities were there. We were right on top of a metro stop., and, you know, we thought it was a great,, location. Did a deal with,, with MV commercial. Who was the the land assembler and,, and designed a building and went out and, and, you know, at the time,, there was a lot of, of,, rationale to, to move forward with the spec building because when you looked at the large blocks of trophy space that were available, they were there were very few.

Speaker Pratt** ((00:49:01)) - - And the track record of buildings that went spec,, which were leased up before construction completion was pretty impressive. And so we felt like there was a lot of momentum. We knew where we slotted in was the right time. We're going to be delivering when no other big blocks of Class-A space would be delivering., we went out,, talked to a bunch of potential equity investors. USAA came in as our equity investor, and,, we're able to get construction financing. And USAA had been doing, you know, multiple spec office buildings around the country. And we built it. We built it spec. We bought it out at a great cost basis., you know, before construction costs ran up. And then, you know, while we're under construction, Covid hits and pre, you know, before Covid hit, we were, we were trading,, you know, we were in conversations, I would say with three corporate headquarters kind of fortune 500 companies to, to locate their, their corporate headquarters into the building.

Speaker Pratt** ((00:50:00)) - - , Covid hit. All those conversations stopped. Fast forward a few years., we have not least one square foot of space in the building., there there have been interested parties, but they were of a size that were too small to break up the building for a for a small tenant,, or,, the credit worthiness of some of the larger tenants we've been talking to was,, was not it didn't make sense for, you know, where we were. So,, yeah, it's it's I think it's a it's an incredible case study in how,, the trends that have come out of Covid,, have really had an incredibly negative impact on office., so, you know, on paper, I think it checked every box in terms of what would be a successful development, great location, great sponsorship, great equity investor,, you know, project that was built on time under budget,, you know, it checked every single box. And, you know, sometimes you get you get,, you know, drowned by a tidal wave that,, you know, that came in the terms of, in the term, you know, in the form of Covid,, work from home,, dramatically expanding interest rates, drop in office demand.

Speaker Pratt** ((00:51:10)) - - And so, you know, we've got a great relationship with our lender and our investor and,, we're we're in the process of figuring it out, but, you know, it, you know, it's it's nice to it's nice to be in in meetings with our lender and our investor and,, look around the room. Nobody's upset with each other. Nobody thinks anybody did anything wrong.

Speaker Coe** ((00:51:32)) - - , USAA has been there before. They they understand the office market in Washington as well as anyone., the fellow who runs it used to be a broker here in Washington. His name is Len O'Donnell. You know, probably. No, Len. He was. He's very knowledgeable. Yep. About this market. So he knows it's volatility. Yep., so he'll hang in there with you I'm sure. Yeah.

Speaker Pratt** ((00:51:55)) - - No we've got like I said, we've got a great relationship with our lender and our investor. And everybody recognizes the world we're in. And and everybody's kind of locking arms and figuring out how to, you know, to help each other get through this.

Speaker Pratt** ((00:52:06)) - - And look, I mean, the you know, it's still a great building, beautifully designed, beautifully, you know, built at a, at what was historically a great basis. Who knows if it's a good basis today., but. I. Time will tell. But,.

Speaker Coe** ((00:52:22)) - - I think you're in a great location. There's no question. It's a good, physically beautiful building. And,, over time, things will happen, I think. Yeah, yeah, the tech market there continues to be explosive. I mean, I we've done tours at Reston Station and also at rest in town Center. The office demand there is absolutely spectacular. So it's just if you know those markets, they're just really strong. I think it's only a matter of time that'll come to Tysons. Yeah.

Speaker Pratt** ((00:52:50)) - - Yeah, we'll we'll see. It's,, you know, it's one deal. Unfortunately, like I said, you know,, I think the way we've structured our deals, every, every deal stands on its own.

Speaker Pratt** ((00:53:00)) - - And. Yep, there's no, no one deal,, is going to, you know, dramatically affect,, you know, the larger enterprise. And so that's, that's kind of how we, you know, we try to we try to execute every deal really well. And we also are very careful about protecting our downside.

Speaker Coe** ((00:53:16)) - - So talk about your geographic expansion if you would and your markets you're in other than the DC area.

Speaker Pratt** ((00:53:25)) - - Yeah. I mean, our geographic expansion, I mean, the first market we expanded to is California, which I think defies logic for a lot of people that, you know, I think a lot of people are looking at, you know, hey, let's expand up to Baltimore and down to Richmond from D.C. and we went to Southern California. And and that was partly,, because when we decided to expand geographically, one of the things we decided was, look, this is a relationship business. Let's look at places where we have relationships., and so,, you know, I started my career in Southern California, you know, after business school,,, two of my partners had started their careers out there.

Speaker Pratt** ((00:53:59)) - - , we just had a lot of friends and acquaintances in that area. And so we,, you know, we opened an office in Southern California, and we've got a handful of development deals out there,, that are going. And, you know, I thought it was good to have a flag on the East coast, a flag on the West Coast. And from there,, working, you know, towards the center of the country is a lot easier., and so we've done, you know, deals in Texas,, and Utah, California did a couple of deals down in North Carolina. And actually, one of our guys that's been with us,, Nick Beason, he's been with us for,, eight years,, from Carolina, went to school in Carolina., he moved back down there a year ago and, and opened an office for us down there. So,, we've got a few offices around the country and, and,, really willing to look at deals in places, you know, where it makes sense for us.

Speaker Pratt** ((00:54:48)) - - I mean, obviously, we're looking at,, you know, higher growth areas, Sunbelt areas in California. You know, we went out there, it was growing. Well,, it's since slowed down quite a bit. And I'd say we're not looking at a lot of new deals in California. We're finishing the ones that were under construction on,, you know, we're more focused on,, you know, some of the higher growth in Intermountain West. You know, the Utah market in Colorado markets have been very strong. Texas has continued to grow really well. Carolina is growing really well. So we're looking at markets that are that have growth and that we have relationships in., because at the end of the day, this is this is a relationship business. And so that's that's kind of how we chose those markets.

Speaker Coe** ((00:55:30)) - - . So how do you manage all that. Do you have partners that handle those other markets. Or do you do it all centrally from where you are there to someone.

Speaker Pratt** ((00:55:38)) - - Well I have so we have, you know, Brian Folger who's one of the partners of Folger Pratt.

Speaker Pratt** ((00:55:43)) - - He lives in Southern California and manages all our activity out there., and then, you know, we've got lots of great partners and colleagues here in the DC area down in North Carolina. So,, you know, I'm, I'm very in touch with everything that's going on everywhere. But we certainly have senior executives kind of managing each of those markets.

Speaker Coe** ((00:56:04)) - - , so we've talked about the pandemic. It's changed the real estate business considerably., how did it affect your operating businesses and markets where you invest in, develop? I mean, how did that overall change your thought process?

Speaker Pratt** ((00:56:20)) - - Yeah, I mean, I don't know that the pan well. The pandemic directly didn't necessarily change a lot of that. What I mean, when the pandemic started, I mean, we have, you know, a lot of our we have kind of onsite staff and offsite staff. So our construction division there on site, you can't it's hard to do construction.

Speaker Coe** ((00:56:40)) - - That you can't change much.

Speaker Pratt** ((00:56:41)) - - , property management, very much an onsite business.

Speaker Pratt** ((00:56:44)) - - And so we had a lot of our staff still going to their, you know, sites every single day during the pandemic. And then our office staff that was able to work more remotely, we kind of had a hybrid policy., so, you know, I mean, every company's been dealing with those same issues., but but I would say that,, the pandemic and kind of the resulting slowdown in the commercial or the challenges in commercial real estate that were directly attributed to rising interest rates, which was directly attributable to all the stimulus spending during the pandemic. Right? You know, that has caused some changes in our business. And and this, you know, in 2023, I made some very significant changes to our business,, that that kind of came out of those things. I mean, so historically we've been vertically integrated,, acquisitions, development, construction, property management, asset management. Two of those divisions,, are most people don't have most people outsource construction and property management., and we've we've kind of always had those internal,, our construction division for, for years,, did a lot of third party work.

Speaker Pratt** ((00:57:55)) - - , we had a, you know, regular general contracting business., when I became CEO ten years ago, the first thing I did was was stop doing third party work in our construction division., we had enough pipeline that I could keep our whole staff busy just on our own in-house stuff. And. And the third party. The third party construction business is. It's a tough business., you know, it can be profitable. You can also.

Speaker Coe** ((00:58:19)) - - And it's risky, too.

Speaker Pratt** ((00:58:20)) - - It's very risky. And so I wanted our guys 100% focused on our own projects. And I just believe that when we build for ourselves,, you know, there's just a more collaborative,, relationship, and we can manage risk better because at the end of the day, we were signing construction loan guarantees and, and,, you know, I wanted to be able to control that construction process. So we had in-house construction and property management., but at the end of the day, construction,, and residential property management are high volume, low margin businesses.

Speaker Coe** ((00:58:54)) - - Yes.

Speaker Pratt** ((00:58:55)) - - And so when you look at what greystar, which is really led the way in consolidating the residential property management business, quickly followed by several other players, including Mizuho, you know, our local,, company,, that have really dramatically grown their property management businesses., they've, they have been able to drive down,, drive down expenses and, and including their fee. So, you know, residential property management is a very competitive business. It is very low margin. And,, and the only way to make that work is, is high volume. And so you see at this massive consolidation going on in that space. Also, construction is a high volume, low margin business and to to to deal with all the risks that you're taking on in that business, you need to have high volume. You need to be spreading that risk a lot across a lot of different projects. So we were we were really comfortable having both those groups in-house., but when we had a significant slowdown in,, in our ability to start new development projects, I could see that two years down the road, it was going to be a problem for our construction group as we started finishing projects.

Speaker Pratt** ((01:00:07)) - - If we couldn't get new projects going, it was going to be a problem., you know, in parallel, we were starting to see that these third party residential property managers, they could just flat out manage properties at a lower cost than we could. They had purchasing power that we didn't have specifically and maybe most importantly, as it related to insurance. And that was these run up in insurance expenses were becoming very challenging. And you know, our our residential property management portfolio was only 6000 units., not a small size, but certainly not big enough to command the kind of purchasing power that a business or a gray star could command. And so looking down the road a couple of years, I could see that we were going to really run into challenges in these businesses. And I would say the other important thing was I was not willing to do third party work in either business. I was not interested in trying to grow a third party residential property management business, and I was not interested in taking on the risk of doing third party construction work again.

Speaker Pratt** ((01:01:09)) - - And so by constricting the amount of volume we could do to just our own business,, when you have, you know, that high volume, low margin, well, when you take high volume off the table, low volume, low margin is really not a good business to be in. And so, you know, we made the decision,, that those were probably businesses that we needed to exit., again, we did it two years before it would have been a problem., and really tried to look down the road and do it from a position of strength, not a position of weakness.

Speaker Coe** ((01:01:43)) - - And do you still build your own projects?

Speaker Pratt** ((01:01:45)) - - No. So last October,, the Folger Pratt's construction division was,, joined Clark Construction as a, as a new division of Clark, CFP,, which is, you know, obviously a nod to Clark Pratt. And it is it is a new division of Clark that is focused on doing stick build apartments., which is not something that they,, not a, not a product type that they focused on in-house prior to this.

Speaker Pratt** ((01:02:13)) - - So,, so our entire construction division joined Clark., they are continuing to build out all the projects that that are that were currently under construction, and, and,, they will they will be our,, go to contractor,, for everything Folger Pratt does going forward., and on the same day, our entire residential property management team joined Mizuho., and so,, you know, October 1st, both of those were effective. And,, you know, obviously a massive change,, to to Folger Pratt., it represented two thirds of our headcount,, you know, moving to other companies. But what it did was it really twofold? It it I think it was the right thing to do for Folger Pratt's business because of the, you know, low volume, low margin dynamic I talked about a minute ago. But but equally importantly, I believe it was the right thing to do for all our employees, be of those of those divisions, because what it did buy, you know, if you think about our residential property management business, you know, people join those businesses young and and the really sharp folks are able to progress very quickly,, in their careers.

Speaker Pratt** ((01:03:25)) - - But by constricting the size of our portfolio as people progressed in their careers, they didn't have upward mobility. And, and and ultimately they had to leave. Folger Pratt, you know, if they wanted to get promoted any higher than kind of a point., and, and they didn't want to do that. They love the culture of Folger Pratt, and they didn't want to leave Folger Pratt, but they needed to for their career because I was artificially constraining the size of that organization to our own profit. And then very similarly, on the construction side, I restricted our guys from going out and doing third party work., and, you know, in a market where,, our own portfolio was getting a little harder to build,, we were able to put them at a platform at Clark that really gave them access to the whole country and to all sorts of clients. And so I think it was the right thing to do for Folger proper from a business standpoint. And it was it was absolutely the right thing to do for our employees to give them,, you know, job security and upward mobility.

Speaker Pratt** ((01:04:25)) - - And so we were, you know, our core values and our culture at Folger Pratt are critical to us. And our number one core value is we treat people the way we. We want to be treated. And that was our guiding principle in figuring out how to transition those groups. And,, you know, Clark and Bazardo or both, you know, top class organizations. I have very close personal relationships with,, the CEOs of both of those companies. If they'd have gone back 20 years., I, of course, amount of trust in them and, and the cultures of those companies. And I knew that our people would be honored and respected there., and, and so that's that that was a it was a very big transition that we made last year.

Speaker Coe** ((01:05:08)) - - Stepping back from that, though, for a moment, thinking about the heritage of Folger Pratt. Yep. That's an interesting change. I mean, your grandfather was a construction guy. That was his thing. That's they you started out doing 100% third party.

Speaker Coe** ((01:05:24)) - - Yeah, as I recall. Correct., that's how the company started. So that had to been a little bit of soul searching there when you finally made that decision, I'm guessing.

Speaker Pratt** ((01:05:35)) - - Yeah. I mean, another one of our core values is we plan thoroughly and execute effectively. And,, and, you know, we did plan thoroughly for those. It was a very you know, you asked about strategic planning earlier. I mean, this is something that I've been thinking about and kind of laying the groundwork for, for a number of years because I recognized that at some point, if there was a slowdown and I couldn't, you know, continue to, you know, start development projects here that, you know, our construction business would would be challenged. And so, yeah, for years I've been kind of thinking about this. And,, so it actually wasn't a hard decision, you know, it was, it was, I knew it was the right thing to do for the business. And as long as I could do it in a way that was consistent with our core values and honored our people, then,, then I then I knew it was the right thing to do.

Speaker Pratt** ((01:06:24)) - - So after a lot of thorough planning,, it was it was honestly a pretty easy decision to make, because that's great. I think it was the right thing to do. And, and,, and we and once I was consistent, once I was confident that we were doing it consistent with our core values., then I felt I slept well at night after that.

Speaker Coe** ((01:06:45)) - - That's awesome. So besides the pandemic, we've seen social changes accelerate as a result of several incidents over the past several years. Alice Bolger Pratt adapting to the diversity challenge and more broadly, ESG issues in general.

Speaker Pratt** ((01:07:01)) - - I am really happy to say that this whole ESG movement is not changed the way we've done business one bit, because. We were always a company that had a lot of diversity and honored,, you know, diversity. And,, so it really didn't you know, it didn't really affect how we did business because like I've mentioned a couple of times, our core values, our core values are very consistent with honoring, respecting people, listening to divergent opinions and views.

Speaker Pratt** ((01:07:31)) - - And so we didn't need to make changes, to be honest., and that's great. Yeah. So that's that it it's just it's just kind of part of who we are and, and who we've been for a long, long time. And so,, yeah, we didn't really fundamentally have to change anything because I felt like the way we operated was very consistent with,, with these trends.

Speaker Coe** ((01:07:52)) - - Relationships are key to our industry, as you referred to already a couple times,, our other than family and colleagues who have influenced you most in your career, me and the the public or private sectors?

Speaker Pratt** ((01:08:05)) - - Now, that's an interesting question..

Speaker Pratt** ((01:08:11)) - - You know, I would say, look, a lot of people have been a wonderful influence on me. I have. You know, when I joined Folgers, brought my dad, and my two uncles had never really worked anywhere else., they all. My one uncle had worked as an attorney briefly., but really, all three of them started their careers out of college at Folger Pratt and, and, you know, kind of came up in the business.

Speaker Pratt** ((01:08:34)) - - And so they certainly had been very successful. And they knew one way of doing things, the way they'd done things. I was trying to come and bring a different perspective., and so, you know, I really looked to people outside the organization to mentor me and guide me. And, and I would say that that's something that I've very proactively done throughout my career is,, is try to suck as much wisdom out of friends,, as possible. And, you know, back to your conversation about, you know, my network from Harvard. That's actually a group of people I've leaned on heavily., you know, friends, colleagues, peers, but that are at significantly larger, you know, maybe more sophisticated in some way, companies that that I've been able to really kind of learn from over the years. And then I would say early on in my career, someone that that that has, you know, had a had a influence on me in a meaningful way from a business standpoint.

Speaker Pratt** ((01:09:27)) - - , was,, Don Wood at Federal Realty, and Don and I became acquainted right after I moved to Washington, D.C., because Don has a daughter with cystic fibrosis, and I have a son and daughter with cystic fibrosis.

Speaker Coe** ((01:09:41)) - - Oh, really?

Speaker Pratt** ((01:09:42)) - - Yeah. So Don and I, Don quickly recruited me to help him with the gala, which he had been chairing for several years., when I, when I kind of moved to D.C. and he quickly,, convinced me to co-chair the gala with him. And so for about ten years, Don and I worked extremely closely on,, the cystic fibrosis gala. And I was very early on in my career, and Don,, was the CEO of Federal Realty,, which was, you know, and continues to be an incredibly dominant and, you know,, you know, a company that just is a pillar in the D.C. region and obviously all over the country for for what he does. But,, for me to be able to sit with Don for hours and hours and hours every month,, working on, you know, raising money for cystic fibrosis, which we're both passionate about,, you know, I had the opportunity to be in his office and, and just observe,, many, many meetings that kind of impromptu meetings where his CFO or his general counsel would walk in to talk about something and,, you know, and I got to be a fly on the wall for that.

Speaker Pratt** ((01:10:47)) - - And it really,, you know, I'd say it impacted me and and the way the vision I started having for Folger Pratt in terms of, you know, what was possible and and so, you know, Don's been a wonderful friend and in that way, kind of an indirect mentor of mine,, you know, and there are many other people I could name that, that have that have helped me., but, you know, given how young I was in my career and the access I had to don and kind of seeing his world that that was that was meaningful to me.

Speaker Coe** ((01:11:16)) - - And for listeners,, Don would was a guest of mine,, about a year ago. So you can look him up and that podcast and hear about Don's story, which is a very good one. Yeah. That's. Well.

Speaker Pratt** ((01:11:28)) - - Right.

Speaker Coe** ((01:11:29)) - - Yep. So what are some of the biggest wins, losses and surprising events in your career?

Speaker Pratt** ((01:11:37)) - - Oh good question. I mean, you know, I would say,, you know, lots of lots of wins on kind of this transaction here, that transaction, they're, you know, putting together this West End Alexandria project.

Speaker Pratt** ((01:11:50)) - - It's the largest project Folger Pratt's, you know, done in our history. So that was a big win. And,, being able to kind of pull together that partnership., you know, I think it took a lot of,. You know, I'd say a lot of things had to go right. And we had to convince a lot of people that we were capable and qualified of pulling that off. And so being able to convince folks and then move that project forward, which was stalled for literally decades,, that that was a win., you know, you learn a lot more from the from the disappointments and the mistakes made. Yeah., certainly made, you know, individual project level mistakes.,, you know, you know, countless,, project level mistakes. I think that,, you know, I, I think I have been too conservative at times., I, you know, after the great financial crisis,, we bought a handful of properties in 2010, 2011, and by 2014, I thought,, you know, prices were too high.

Speaker Pratt** ((01:12:52)) - - Well, I missed I missed a five year run of of buying multifamily,, you know, and and so that's that's a mistake I'm not going to make,, after, you know, after this market correction. So, you know, they're definitely things that,, that I've learned the hard way., and also had some, some great wins, but I've certainly I lose, I lose sleep and I think a lot more about the mistakes I've made,, than any wins that I've had.

Speaker Coe** ((01:13:18)) - - What about the biggest surprise, what came out of left field that said, whoa, that was something, anything like that?

Speaker Pratt** ((01:13:25)) - - Oh,, you know, there's not a single one that jumps to mind, to be honest., okay. Yeah, I, you know. Yeah. Not. Not the I don't have I don't have one that I can point to. That is a massive surprise. Okay. I'm sure there are. Nothing's coming to mind at the moment.

Speaker Coe** ((01:13:44)) - - Sure.

Speaker Coe** ((01:13:45)) - - So without this disclosing any secrets, share some stories of your favorite and not so favorite experiences and any lessons you learn from them.

Speaker Coe** ((01:13:54)) - - Maybe,.

Speaker 5** ((01:13:59)) - - .

Speaker Pratt** ((01:14:02)) - - Well, yeah, I mean I. Lessons I've learned, I mean. I think I've learned. I mean, I would say that, you know, not as much on like a deal level, but I'd say from a leadership standpoint,, one of the things I've consistently,, probably not done as good a job of is as I should, and it's a lesson I like, continue to have to learn every year, it seems, is that the importance of,, communication and, and really communicating to my team,, and there's almost an insatiable appetite for team members to,, you know, to be quote unquote, in the know., and so my town hall meetings,, that I have, you know, company wide town hall meetings are called in the know,, that's what I title them because I, you know, I want people to feel like they're in the know,, because people need to, to feel leadership. They need to understand the vision and where you're going.

Speaker Pratt** ((01:15:00)) - - And, and I think the balance that, that I am constantly trying to, to hit is communicate. But the, the reality is sometimes the vision isn't clear to me either. You know, you're trying to figure it out. It's not it's not like,, you know, the strategic plan is written on the wall and we're just always executing it. And you know that that has to change. And as the market changes, things have to change and hearts have to change. And how we're organized has to change. And it's not like I've always got it all figured out. And so there's a fine line of communicating and laying out the vision, but not over communicating., and, and having people be confused because,, because the vision isn't crystal clear. And so I would say that like those, those are the lessons that I have learned and I, I am continuing to learn is how to strike the right balance in communication., and that's, that goes with that goes with, team members.

Speaker Pratt** ((01:15:57)) - - It goes with external partners. It goes with investors., there's, there's, you know, I, I on the side of trying to, you know, overcommunicate and sometimes that doesn't work so well. And sometimes I under communicate and it's just a balance that I'm continuing to try to, to figure out.

Speaker Coe** ((01:16:16)) - - Interesting. Well, to me, listening is probably,, as important as talking, if not more so. Yeah. And I would think that, you know, keeping your ears open and then aiming in a direction, but not necessarily with a map, but in a, in a kind of a compass like approach to it. It would be my reaction to what you just said. Yeah. To some extent. Yeah. So you've been very active in the community, including board memberships, real estate organizations, volunteer activities. You participated in this to stay visible in the community, or do you find personal satisfaction contributing or both? You mentioned cystic fibrosis.

Speaker Pratt** ((01:17:03)) - - I've never worried about being visible in the community.

Speaker Pratt** ((01:17:06)) - - I don't know that just hasn't. That's not ever been something that,. You know, I've been too worried about,, you know, I have been active. I'm very active in early. I'm a, you know, a product council chair, and I've done that, you know, going back to,, you know, what I mentioned earlier? Like, I really try to surround myself with the smartest people I can and,, and learn as much as I can from them. And, and that's why I've, that's why I do what I do at Uli. Because I can, you know, I can,, help, you know, determine who I spend time with,, on my product council. And so that's, that's been something that I've done, you know, for selfish reasons,, to spend time with, you know, people I think are smarter than me and doing interesting things., you know, my involvement in,, in cystic fibrosis,, again,, you know, it was selfish.

Speaker Pratt** ((01:17:58)) - - I've got two kids with cystic fibrosis, and I feel like I. I felt like I needed to do something about it, and,, and, you know, and so Don and I worked our tails off,, to raise as much money as we could because we were trying to save our kids. And so,, again, that didn't have anything to do with being visible in the community. It had everything to do with trying to trying to, you know, change the course of life for my children., that's that's a long story for another day., and, and if you don't know the story of cystic fibrosis and,, what the Cystic Fibrosis Foundation is accomplished in terms of,, essentially curing, they don't they don't call it a cure, but essentially curing that disease., it's a remarkable story. It's worth it's worth looking into.

Speaker Coe** ((01:18:42)) - - , populations.

Speaker Pratt** ((01:18:43)) - - Yeah. So that's,, you know, so, yeah, I try to be involved in a lot of things that doesn't have anything to do with visibility.

Speaker Pratt** ((01:18:50)) - - It has everything to do with finding things that I'm passionate about. And,, that's great. I want to learn from.

Speaker Coe** ((01:18:57)) - - That's awesome. What are your life priorities? You've already talked about your family and your work and giving back. I mean, is family still number one for you? Among everything else? I assume it is.

Speaker Pratt** ((01:19:09)) - - I think it is for most people, you know? I mean, I think as you get older,, you realize that, you know, you know, relationships matter and, and there are no more important relationships than your family. And so,, I don't think that's unique to me. I think that's I think that's I think if you interviewed 100 people that all say the same thing,, pretty much family is, is really, really important. And, you know, I tell my employees, like, look, we come to work every day to, to create, you know, value so that we can, you know, spend time with our families and we can put our send our kids to school and college and like, it all comes back to providing for our families.

Speaker Pratt** ((01:19:44)) - - And so that's, you know, yes, family is is number one. And I and I feel like my work colleagues are an extension of my family. So, you know, I care about these people and I care about their kids.

Speaker Coe** ((01:19:55)) - - Many of them are. Yeah. Of course you are.

Speaker Coe** ((01:20:01)) - - Yeah.

Speaker Coe** ((01:20:01)) - - So what advice would you give your 25 year old self today? Cameron?

Speaker Pratt** ((01:20:07)) - - , I think I would, I think I would tell my 25 year old self,. You know, just go for it. You know, just just put yourself out there and go for it and and dream big and and,, you know, I mean, I think, you know, one of the when I was 25, I was working on Wall Street and,, I had the opportunity as just a young analyst, but to sit in, to sit in the room with, you know, the CEOs of some of the biggest real estate companies in the country., and, and I think my biggest takeaway was.

Speaker Pratt** ((01:20:44)) - - You know, this isn't rocket science. I mean, these guys are smart, but they're not that smart, like I, you know, I can do this, too. And, and and that's. I hope that's not interpreted as as arrogant or cocky. It was really interpreted as,, finding some self-confidence, recognizing that the world's not that intimidating at the end of the day. And,, and, and, you know, go out there and, you know, try to punch above your weight class,, because, you know, you can and and fortune favors the bold., so, so go for it. You know, that's the advice I'm giving my 22 year old son right now.

Speaker Coe** ((01:21:20)) - - So that's great.

Speaker Coe** ((01:21:21)) - - That's great. So,, that's my last question. If you could post a statement on a billboard on the Capital Beltway for millions to see, what would it say? Cameron.

Speaker Pratt** ((01:21:32)) - - I think it would say something along the lines of be kind. You know, just be kind.

Speaker Pratt** ((01:21:39)) - - You know, I just, you know, I think that there's just so much division and divisiveness and anger in the world right now. And I just think that if everybody could just be a little nicer and listen and try to understand each other, people would realize that, you know, most people agree on about 90% of things. And and we tend to focus on the 10% people don't agree with. And I think our political system is a mess because it incentivizes people to,, you know, to to whip people up and anger and resentment and, and it's just causing a, you know, I think it's, it's really destructive for the, the conversation and the tone and the optimism in the country. And I think if everybody would just take a breath and be kind and try to listen to each other and not vilify each other, then, would be in a much better place. So, yeah, be kind. That would be my,, my billboard.

Speaker Coe** ((01:22:36)) - - So, Cameron, thank you very much for this very wide ranging conversation today.

Speaker Coe** ((01:22:41)) - - I appreciate it. Thank you. Happy to.

Speaker Pratt** ((01:22:43)) - - Be here. Thanks for the invite.