John Coe (00:00:00) - Thank you for joining me for another episode of icons of DC Area Real Estate. I'm so pleased to share with you my guest for today's show, who is Sean Caldwell, the executive managing director and co-founder of Millcreek Residential. Sean takes us on a journey through this remarkable career, from his early days as a civil engineer to his pivotal role in shaping the landscape of real estate development. Sean shares his personal origin story, revealing how a mediocre student found his passion and became a leader in the industry. His transition from civil engineering to real estate development is a testament to the power of mentorship and seizing opportunities. He describes the formation of Mill Creek Residential and its rise from the Trammell Crow residential ecosystem. He talks about the entrepreneurial spirit and the institutional discipline that fueled the company's success, even in the wake of the 2009 recession. He talks about. How Millcreek Residential maintains its local business approach amidst institutional growth. He discusses the challenges of combining multiple operating partnerships into one entity. When they were formed, he also talks about innovative capital strategies that they have with regard to joint venture and small funds.

John Coe  (00:01:32) - And he talks a little bit about their philosophy of either long term holding or merchant building. And they look at each each property that way. we talked about several interesting projects, including the former Italian embassy in Washington, D.C., that they converted to residential property. Along with a site that I actually financed, back in the 1980s, which is now going to be redeveloped. It was a former shopping center in northwest Washington to be redeveloped into a mixed use development called Lady Bird. he talks also about embracing technology and market trends. We talk quite a bit about the multifamily market and their their foray into the single family build for rent business. We talk about what he sees as cultural influences on their business operations. comparing Maryland, DC and Virginia and I discuss some of the history and behind that. He also talks about his leadership and hiring philosophy, looking at values and young professionals and his approach to fostering personal growth, leadership and work life balance. And then he also offers his sage advice for aspiring leaders, reflecting on his career and, taking risk, embracing failure and leading by example.

John Coe  (00:02:58) - So without further ado, please enjoy this wide ranging conversation with Sean Caldwell.

John Coe 00:00:00) - So Sean Caldwell, welcome to icons of DC Real Estate. Thank you for joining me today.

Sean Caldwell (00:00:05) - Thank you for having me, John. It's clearly my honor.

John Coe (00:00:09) - So, please tell me about your role at Millcreek Residential and your day to day activities at a high level. And then we'll talk a little bit about your background for that.

Sean Caldwell (00:00:18) - So, my position is executive managing director. And one of the founders of Mill Creek were, as we'll discuss, were a spin off from Trammell Kerr Residential. I oversee the development operations in five markets Boston, New York, DC and Charlotte Morley, sit on investment committee. And that's what I do on a day to day basis, overseeing really spend time on the development deals and help structure the financing.

John Coe (00:00:52) - do you just do development or are you doing acquisitions, too?

Sean Caldwell (00:00:56) - So personally, Mill Creek is active in the acquisitions market will expand on that later. I see the acquisitions through the investment committee, but personally I do not I'm not involved with the acquisition teams, separate groups, separate vertical that we'll chat about.

Sean Caldwell (00:01:13) - That's really growing in size and scope. But that's not what my day to day responsibilities.

John Coe (00:01:18) - But you will buy dirt so absolutely. Well yeah. Yeah.

Sean Caldwell (00:01:22) - Yes. We try to buy a lot of dirt. We try to buy that dirt right around construction start. But yes we are in the acquisition. So sorry. So acquisition side. Yes. So of the development. a developer at Mill Creek is cradle to grave. So you're chasing land, you're tying up the land, you're getting it approved, designed. You're seeing all the way through completion and sale. So.

John Coe (00:01:47) - So you even asset management through the project, you're still involved in that extent which is interesting. Yeah.

Sean Caldwell (00:01:53) - Correct. Well we have new verticals for that. But the, the developers you know are touching everything from a letter of intent. The developers are attaching everything from the letter of intent to all the way through sale. That's great. Yeah that's fine.

John Coe (00:02:06) - So let's go to your personal origin story. If we could shine, where'd you grow up? And tell me a little bit about your family, your parents and background that.

John Coe (00:02:17) - Yep.

Sean Caldwell (00:02:17) - Yeah. I'll start with my family. with my parents. And both of my parents are local, which I think is unique, I think is, you know, being local. You're from Michigan, right? Right. So that's more common here than it is, you know, being local, of course. And my mom was I grew up on the Maryland side, grew up on this side. She was a BK Bethesda Chevy Chase graduate when my children went oh is that right. Okay. Yep. probably a different class. She was 55. So yeah. my dad was a bit of a had a nomadic childhood but ultimately graduated from Foster High School. So, what's interesting is both sides of the family have sort of a construction background. My mom's father, owned a a electrical contracting business called Bethesda Armature, which you may have heard from back in the 80s. So that was her dad's business. my dad's dad and my dad were both, you know, kind of working class guys at their heart.

Sean Caldwell (00:03:21) - Do it yourself. You know, if you if you weren't building it yourself, it wasn't going to be built. So there was a little bit of construction on both sides. So they met and raised our family in the city of Falls Church. Three blocks from our Founders Road community, which we'll chat about later. they raised, three children there. I'm sorry. I'm sorry. They raised three of my brothers. And I though there's four of us, so I've got three brothers. stayed there for pretty much their whole life. So I'm a local Northern Virginia guy. as far as you know, the rest of my family. My modern day family. I have three great kids that are from a previous marriage. The oldest one is in Chicago. Jesse, the middle one's in Tel Aviv, married in Tel Aviv, and then the youngest one's graduating college, in London right now. and the last part of my family that I share is you and I have something in common. you've been married for 41 years.

John Coe (00:04:30) - That's right.

Sean Caldwell (00:04:31) - That's great. Yes. So I've been married for 41 days. So, wife number two.

John Coe (00:04:40) - What's that? Wife number two. Yes.

Sean Caldwell (00:04:42) - Yeah, exactly.

John Coe (00:04:42) - Okay.

Sean Caldwell (00:04:43) - Exactly. So, Jill and I have been married for, We just got married in March, and.

John Coe (00:04:48) - Congratulations.

Sean Caldwell (00:04:50) - Thank you. Very exciting, very exciting. So, if this is a podcast on, you know, 41 Days of Successful marriage, I'll happy to expound on.

John Coe (00:04:59) - But how did you meet your second wife?

Sean Caldwell (00:05:01) - Oh, great question. So, I'm sure the same way that you met your wife, it was on the apps. no. No.

John Coe (00:05:11) - I met mine on a mailbox in her. We lived in the same community, and we just met at the mailbox. Is that right? Yeah, it's kind of very cool.

Sean Caldwell (00:05:18) - Yeah. And how old were you guys when you met?

John Coe (00:05:20) - 28. 27.

Sean Caldwell (00:05:23) - And what city were you guys in?

John Coe (00:05:25) - We were in Wichita, Kansas. Oh, she's a Kansan, and I'm from Michigan, but I that was one of my stops early in my career was down there.

Sean Caldwell (00:05:32) - Very cool. That's awesome. Yeah, yeah. So we met we met just before the pandemic, and I think the pandemic forced her to stop dating other people. And she had to pick somebody so fortunate that she picked me and online app, then online app. Yeah. Yeah. Interesting.

John Coe (00:05:50) - That's how my son and his, his wife Matt.

Sean Caldwell (00:05:52) - Is that right?

John Coe (00:05:52) - Yeah. Yeah. So it's interesting.

Sean Caldwell (00:05:55) - It's much more, it's it's the modern world of dating. So. Yes. Yeah. So recently married.

John Coe (00:06:02) - That's great. Yeah. That's exciting. So, you then you went to high school, I assume in, Northern Virginia.

Sean Caldwell (00:06:12) - I did, so went to work to Bishop O'Connell High School. Sure. In Arlington. So, we which was, you know, I would say we'll chat about this more, but, you know, very mediocre student, fortunate education being in the working class family that I was.

John Coe (00:06:30) - Sports.

Sean Caldwell (00:06:31) - So great question. I was I did play sports, but I was not good.

Sean Caldwell (00:06:37) - You know, I was a very like I played a little bit of football, but wasn't that great? I found my athleticism actually in college where I started playing rugby. Okay. So, so in high school, it's just not like, you know, very mediocre athlete, you know, mediocre student. Really, like, found myself later in life. Yeah.

John Coe (00:07:02) - So you went to George Mason.

Sean Caldwell (00:07:04) - That's the right. That's right. So with my, you know with my family the choices were really you're going to go in state, you know you're going to you know wonderful choices in Virginia. I wanted to be an engineer. I had no idea what an engineer did, but I knew I wanted to be around, designing things. What's interesting to step back is with my family's background in high school, my first job was a, I was 14 years old, and I worked at a local construction company called Barlows Construction. So before I was even legally able to work, I was actually working on construction.

John Coe (00:07:46) - A laborer or.

Sean Caldwell (00:07:47) - What? A laborer. Yeah, yeah. So I was laborer, and I was like a carpenter's apprentice by age 16. So really? That's great. Yeah. It's cool summers in high school, summers in college. And so going into college, you know, I really thought, oh, I'll be an engineer. I'll, I'll do something like that. And. I took a very atypical path of college. George Mason is sort of an atypical university back then. Much more of a commuter school. Right. And the only program they had at that point was actually electrical engineering. And John, after three years of electrical engineering, I realized I've really hated it.

John Coe (00:08:29) - And was it all the math in it or what was it?

Sean Caldwell (00:08:33) - You know what it was. That's a great question, John. It was it was I couldn't visualize it. And it was how do I learn? Right. So the theme here we'll chat about is just who are you and how do you learn and what inspires you.

Sean Caldwell (00:08:48) - Right. So at the end of three years, there was a new program. I am the very first. I was the first student at George Mason to register for a new program of civil engineering.

John Coe (00:09:03) - Oh, interesting.

Sean Caldwell (00:09:04) - Yeah, it was, called urban systems engineering back then, and I had two choices. Right. It was. I was living on campus, playing rugby more than I was probably studying. And my two choices were probably quit engineering and go be a carpenter or try this civil engineering thing out. so I decided to do both. I actually moved back home, I work construction in the morning, and then I went to school at night. which made for a very atypical, college path. one of my dad's, one of my favorite lines of my dad was, he would always say to me that I was I successfully graduated from college in three terms Reagan, Bush, and Clinton.

John Coe (00:09:58) - So ten years.

Sean Caldwell (00:09:59) - Or so is it about six years of six solid years? Three years and three years.

Sean Caldwell (00:10:03) - And but it was a, it was it was I was it was the perfect program. It was civil engineering was spoke more to me. I could see it. You can see a bridge, you can see water, you can see structural. I couldn't see circuitry. That's not how my brain worked. and the program was really strong on communication skills. And how do you present and how do you write. And it was it was a really it was a really wonderful program for me.

John Coe (00:10:31) - That's great. Yeah. That's great. So then what.

Sean Caldwell (00:10:35) - So then what. So then it's, so I get out of college in like 1993. Right. Okay. And this is a you know this right. Yeah. Not a great time to it's a tough time. Yeah really tough time. And I think for the younger listeners like we all know we talk about oh nine because that was just a horrible time as you and I experienced. But that time was just a real estate depression. Right. I was competing and this is this is important.

Sean Caldwell (00:11:05) - I was my when I was trying to get my first job, I was competing with people who had 20 years experience because they were willing to take the pay of someone who was right out of college. That's how tough it was in the design world. so I was still working construction, swinging a hammer, and it took me ten months to 200 resumes, ten interviews and no offers. Wow. Yeah, it's pretty wild. So I'm. I finally got an interview. This is actually a pretty good story. So I finally got an interview at a local civil engineering firm called VCA, which I think, you know, of course, they're 45th anniversary is this afternoons tonight?

John Coe (00:11:53) - Oh, really? Yeah. The party.

Sean Caldwell (00:11:55) - There? Yeah. Going to the party there.

John Coe (00:11:56) - There you go.

Sean Caldwell (00:11:57) - So I walked in, and the owner of that company is a guy named John. And do you know John?

John Coe (00:12:03) - No.

Sean Caldwell (00:12:04) - So he's the a invite guy, and he's a New York Italian at his core. You know, he is he speaks his mind.

John Coe (00:12:14) - And civil engineer.

Sean Caldwell (00:12:16) - Civil engineer.

John Coe (00:12:17) - Okay. So.

Sean Caldwell (00:12:20) - and in New York at heart, so he walks in looking at my résumé and he just looks at me and goes, why the hell would I hire you? I love it, it's great. Right. And I stood up. And true story, he says. Today I stood up and said, Because I'll work for free. And six months from now you can decide whether you hire me or not. And he pauses and looks at me and goes, you're blanking, hire. And he's like, and it was. It was literally like I was desperate. Yeah, I was desperate, you know. Right. George Mason wasn't a name of a program. Right. I was competing with kids from, you know, UVA, Virginia Tech, Maryland, all all the classic civil. So yep, that's how I got in the program. So that's how I got an invite to John was a still to this day a great mentor.

John Coe (00:13:13) - And, so you learned a lot in those first six months, then without pay.

Sean Caldwell (00:13:19) - I did well, he did pay me. He did pay. He did. You did pay me. That's interesting. Yeah, it was great. He he did pay me. He was so we. But it was, I think that hunger of saying, I don't know if I'm going to be swinging a hammer for the rest of my life or if I'm going to actually get a job as an engineer were where it was. So, so I joined this is probably late 93, probably early 94 or something like that, and worked for John for 6 or 7 years. Right. all my clients, all my clients were developers. Right.

John Coe (00:13:59) - So I you got to know everybody, got to know everything. Cause Vika was, you know, a major player in the 90s.

Sean Caldwell (00:14:06) - Very much so. Yeah, very much so. it was a really. It was a wonderful experience.

John Coe (00:14:10) - So what of of those clients? Which one kind of stood out to you at the time, and what triggered kind of your thought process going forward from.

Sean Caldwell (00:14:20) - That great question. and this was not that's a wonderful question. And I had wonderful actually, I had really great clients. I had some good clients, I had some bad clients. I got exposure to a little bit of office and retail and a lot of single family homes. Right. You were sure?

John Coe (00:14:40) - the home builders, the.

Sean Caldwell (00:14:41) - Home builders were are really heavy on the civil engineering. Well, land.

John Coe (00:14:45) - Development, I mean, you know. Yeah, I like David Flanagan. You're. That's right. Do a lot of work for him. Absolutely.

Sean Caldwell (00:14:50) - So David Flanagan is an amazing developer. Right. And so the the groups at the end, I think I was with John for 6 or 7 years. So let's just say seven. So in year six I started to really come into my own. And it wasn't believe me, it's I saved the industry a lot of money by getting out of engineering. Yeah. That was I was not a detailed oriented engineer, but I knew how to manage, had decent leadership skills, knew how to communicate, and at the end of the day, that's what you really need.

John Coe (00:15:26) - So you wouldn't have classified yourself as a design guy. You were more of a relationships guy.

Sean Caldwell (00:15:31) - Yeah, it was more of a project manager, like very good at like manage. And the clients loved it. Right? I mean, it's the an engineering. Evan's pretty good. Designers, you just got to have, you know, good leadership, management skills and by an interface. And that's when you can really succeed. And, And he saw that in me, which was wonderful. He did more, you know, he gave me much more, authority than I ever deserved, which is a. And in a six year out of the blue, I got three offers from three different developers within the same month.

John Coe (00:16:09) - You didn't seek them?

Sean Caldwell (00:16:11) - I did not seek them. So I got an offer and I'll share. Those like Pulte Homes reached out, which made sense. JP, I reached Sam Settle. Yes, yes, yes. Hello, I'm Bob Jensen. Yeah. sure. And they're just wonderful.

Sean Caldwell (00:16:25) - You know, they were doing everything. I mean, they were overwhelming how much they would run.

John Coe (00:16:30) - And they still are.

Sean Caldwell (00:16:32) - And still kicking it. Right. and then JP reached out as a multifamily.

John Coe (00:16:37) - Okay. For sure.

Sean Caldwell (00:16:38) - And someone who. I think you know, Lin Forcas. Of course. Yeah.

John Coe (00:16:43) - I've interviewed lan, and.

Sean Caldwell (00:16:44) - Oh, is that right?

John Coe (00:16:44) - Oh, yeah. He's been on the podcast. Yeah.

Sean Caldwell (00:16:46) - He's wonderful.

John Coe (00:16:47) - Well, he's more than wonderful. He's just an incredible human being. Yeah, in many ways. Yeah.

Sean Caldwell (00:16:53) - And he's giving back on a on a very inspirational scale.

John Coe (00:16:57) - Oh absolutely. Yeah. Yeah.

Sean Caldwell (00:16:59) - So I had three, three folks who I admired all three of the greats.

John Coe (00:17:04) - So what did Len offer you just out of curiosity.

Sean Caldwell (00:17:06) - So he was, this is this is when he had milestone communities, right? He had I hadn't thought about this, so I had a my, my grandfather had passed away, and there was some land in Centerville that was in the family estate.

Sean Caldwell (00:17:23) - And Len stepped in and helped me navigate how to, you know, how to dispose of real estate. Right. It was just wonderful. And, I mean, it was like a small piece of real estate in today's world. But it was the entire estate of my. My dad's a family, right? So when just was a wonderful person and helped me navigate selling it to Bob Huston Homes. So when was beautiful. And I guess he saw something and just wanted he was a he was a developer of one at that point, and he wanted to be a developer of too. So I had the and this all happened at the same time. So I was like, I'm going to have Pulte and JP and three very different worlds. Right. And I approached John and Teddy and he was awesome. He said, give me one year, give me one year. At the end of the year, if you still want to be a developer, I'll make sure that you're a developer.

John Coe (00:18:23) - Interesting. But if you stick.

Sean Caldwell (00:18:24) - Around, you know, the world could be yours. Like, I want you to really give this thought because it's a big change. And once you change, you can't really go back.

John Coe (00:18:35) - So he was kind of like a mentor to you to some extent, where he said, you know, he was looking out for you. He said, you know, this isn't for me to keep you. It's more just to think about your long term 100%. That's that's really impressive. That's a really thoughtful observation.

Sean Caldwell (00:18:50) - And that's why I want to go see him today. It's like he's still my mentor today.

John Coe (00:18:53) - When you should tell him the story. Yeah, yeah, I will, but you were being interviewed about this and that's what you said. I will tell him that.

Sean Caldwell (00:19:01) - Yeah. And he. And over that year, I was 100% committed to him. I never was 100% committed. And a year later, I met Chip. Yeah, sure. And Chip offered me, he's. He and I were working together on a project in Herndon, Virginia.

John Coe (00:19:26) - To give a little background on chip, if you would first, before we. Yeah.

Sean Caldwell (00:19:31) - So Chip a, he is he was with Bill McDonald. And I'll share a little bit about this. You hire me, but, Bill restarted trauma residential. He his first hire was Chip. A, chip worked at Bazardo. He worked at Elm Street. his background was he was an Army guy, right? He went to Purdue and then went into the Army and then got into homebuilding and then got into development. They got into homebuilding. I think somebody before Elm Street, I think he went Elm Street and then Mizuho and then he had the chance to meet.

John Coe (00:20:14) - So he did work with Thompson, John Slidell, then at that sort of homes. Yeah.

Sean Caldwell (00:20:18) - And actually.

John Coe (00:20:19) - Right.

Sean Caldwell (00:20:20) - here's something for you. If you think about, you know, we're going to talk about the history of Trammell Crow later. But DeSoto back then had they called it Bay Bulls and butts. So Richard Boles, Jim Butts and Chip Bay.

John Coe (00:20:34) - All three of them.

Sean Caldwell (00:20:35) - All three were working under either Slidell or Tom. I don't, but it's a that's an impressive crew.

John Coe (00:20:41) - It sure is. Yeah.

Sean Caldwell (00:20:42) - Yeah. So yeah. So Chip I met Chip. And to go back to the Viking thing I he made me an offer and I walked in to John and I said, I got an offer from Trammell Crow. And he looked at me and shook my hand and said, best of luck. He was like he knew I was done. I gave him his year. He was. He gave me a year. And the best part of it is, I think the takeaway was, I knew I'd be a better generalist than a specialist. John's an amazing specialist and my passion is being a generalist to go into development. So that's that's the Vika story.

John Coe (00:21:20) - Well you had six years under your belt. Yeah. And you worked with all these different developers. So you had a sense of what the business was. Obviously at least the physical side, maybe the financial side might have been a bit of an eye opening experience for you when you first came there.

Sean Caldwell (00:21:35) - I'm I'm gonna guess it was a big eye opener.

John Coe (00:21:38) - Yeah. Because that's in my experience, that's the the biggest challenge for people that come from the construction and physical side of the business to learn that if they hadn't already learned the relationship building which you had. So you had two in my in my view, there's three legs of the stool in real estate. Analytical. Yep. Communications. That's right. And design. Construction. That's physical. So you had two of the three, which is a great foundation. It was a good foundation.

Sean Caldwell (00:22:06) - You're a I agree with you John I, I was I do the same thing. No matter what world you come from, one or the other legs are going to trip you up. It's going to it's you're going to you're going to be you're going to have a strength. You're going to have a weakness. Just be aware of your weakness. So I 100% agree with what you're saying.

John Coe (00:22:24) - Yeah. Yeah. So how did you get disciplined to learn the financial side of the business?

Sean Caldwell (00:22:29) - That's a great question.

Sean Caldwell (00:22:30) - So, first of all, I think there was two paths for me. One was, that was Bill McDonald. So we'll talk a little bit about the history of Bill McDonald after this. But you know that he is one of the sharpest financial minds that I've ever been around. I mean, he just we call it today at Mill Creek when there's some young folks who get exposure to him, we call it going to the school of Bill. And he can really just break down the financial side of the business. And he's actually been like writing all of his notes down. It should be like a tutorial.

John Coe (00:23:09) - Did he work with Ron Terwilliger? You did.

Sean Caldwell (00:23:12) - Okay. So, Ron, as you can imagine, is one of the sharpest financial minds in real estate.

John Coe (00:23:19) - joined by Trammell Crow himself. That's right.

Sean Caldwell (00:23:22) - So so it's like, let's go to Bill story. Right. So Bill has I've been with the company for 25 years. Right. I think Bill's been with the company for 37 years, something like that.

John Coe (00:23:37) - well the predecessor. Yes. Yes, yes. Yeah.

Sean Caldwell (00:23:40) - With with our, with our legacy. Right. And he was before opening up the Maryland office, he was the CFO for Chip for Ron down in South Florida.

John Coe (00:23:55) - Oh, okay. That's interesting.

Sean Caldwell (00:23:57) - So he was overseeing the southeast debt and equity. and as you know, the history of Trammell Crow Residential, we're chatting earlier is really deep. So in 93, or actually it was 94, the northeast group of Trammell Curve's potential, which was Crow, Terwilliger, Micheaux. Right. And then up in the Boston area, New York, Boston area, it was Chuck Berman. Right, right. So you remember Chuck. Yep. So, so Dick Michel was running the DC office. Chuck Berman was running the northeast office, and they spun off and they created Avalon. Right. So another spin off from Trammell Crow. And so that happened in 94. so when Avalon had the spin off, there was a three year non-compete. So obviously with an IPO, you want that group to succeed.

Sean Caldwell (00:25:05) - So, Crow and Tuilagi agreed that they would not compete from DC to Boston for those three years. As soon as that non-compete ended, they really wanted to be back in this market. So long. Ask Bill. I think he gave him multiple options, and I think he said, I think he said, you know, you can go to Dallas or you can go to DC. And I think, Bill, if you know him, would say, I hate Dallas. So I'm going to D.C.. So Bill came up to.

John Coe (00:25:40) - Ron was in Atlanta, wasn't he? Correct.

Sean Caldwell (00:25:43) - So Ron was in Atlanta, right? Ron and Bill were very close there at a very, very deep, deep, deep respect for each other. and then Bill came up to the DC market. He went to University of Maryland for undergraduate. He went to Columbia Business School for graduate school. played football at the University of Maryland. So he knew like he, you know, living in Maryland was an easier concept for him than.

John Coe (00:26:09) - You and Chip. And he hired you. That's right. Okay.

Sean Caldwell (00:26:13) - That's right. So Bill hired actually, what's interesting about it, one of the wonderful things about Mill Creek, John, is, you know, Bill McDonald's first hires were Chip, a Ashwani, Chitra, Cheri Brown, me, Sam, Simone and Jack. All of us are still with the company today. Sherry sitting on a board seat. So she's not an active partner, but the rest of us are still at the park. So his, you know, his first hires are still still forming. And today it's pretty cool.

John Coe (00:26:45) - And it's still a private company. Correct?

Sean Caldwell (00:26:47) - It is still a private company.

John Coe (00:26:48) - Yeah. He didn't want to go the Roll-up route. That's right, that's right.

Sean Caldwell (00:26:52) - It's, and both chat about public rights versus being private, but it's sure. Yeah, yeah.

John Coe (00:26:59) - So talk about your early years and, you know, your, you know, going, you know, building your business. And then at some point you jumped off and decided to go to graduate school.

John Coe (00:27:12) - So talk a little bit about that too. Sure, sure.

Sean Caldwell (00:27:15) - So what's really, I'd like to chat a little bit about the early years at Trammell Crow Residential, what it looked like. Yeah. And to a certain degree, you talk about diversity, right. And what I mean by that is in the old TCR days, in the old TCR days, everyone, everyone was a Harvard MBA, right? And why.

John Coe (00:27:41) - Is that?

Sean Caldwell (00:27:42) - You know.

John Coe (00:27:43) - I think Trammell is anything but that.

Sean Caldwell (00:27:45) - Trammell was anything about that. I, I guess I, I was on the inside, but I'll say I think it was I think it was Ron's bias. Right. Okay. It was his perspective on it. All the guys were like, you know, MBAs from, you know, elite universities. And that's a wonderful way to go. And and when I met Bill and Chip. And I looked at the group that was around us, you know, Sheri Ashwin and all these folks. It was it was the one the thing that I really struck with.

Sean Caldwell (00:28:20) - Someone asked me after I joined the company. He said, is there a typical CRO guy? And I walked in the room and said, absolutely not. I mean, he's a really disparate, very different personalities. And Bill really embraced and it's really kind of stuck with me a diversity of thought. And with that, the only way you can have diversity of thought is if you have a diversity of background. Right. Right. Sure. And in John, you and I know this like if you really have a diverse if you're really open to a diversity of background. You will have a diverse thriving company. And I've realized that as I was looking at like Chip who's this military structure guy with Ashwani Tucker who's one of them was brilliant creative minds and them working together and they're you know and they're just so different personalities and, and the common thread and all of that. In the early years, were the core values that we have today. So it was really, you know, we have these core values that are in our company today, six core values.

Sean Caldwell (00:29:34) - And in the TCR days, we didn't have them on the wall. But you knew what you had when you hired them. And as a small company we just always have these. Great. You know you knew what you were getting. You were seeking these people who meant that, you know work hard, smart together, you know be the best and the rest will follow. All these tenures that are just ingrained in who we are today is what we were doing back then.

John Coe (00:30:03) - Talk about why Bill wanted diversity. Was he looking for different points of view on on, you know, looking at residential property? I mean, what was the what was the angle there.

Sean Caldwell (00:30:13) - Yeah yeah yeah yeah, yeah I think he knew well, first let's step back. Bill's never been a developer. Right. So Bill is a finance guy, okay? He's a finance guy who is a sort of natural CEO like he can do. You know, he's a tremendous generalist, and he's one of those sort of like those you think about presidential leaders of someone who puts all the different opinions in the room to everything.

John Coe (00:30:39) - Team builder. Yeah.

Sean Caldwell (00:30:41) - Yeah. So you get all the ideas on the table and you can come up with a great solution. So I think it was he absolutely wanted, you know people that were complimentary of each other. Exactly. And absolutely not mimics of each other. He did not want 5 or 6 bill McDonald's different opinions. Really different opinions, really different approaches. it creates a really healthy tension. sometimes unhealthy, you know, sometimes it is what it is. But I think that I honestly like I think about what we need today. It's diversity of thought, diversity of background. And we got to be open to it.

John Coe (00:31:24) - So. Well, the key word you said there is open. Correct.

Sean Caldwell (00:31:28) - Yes. That's right. That's that's what's missing today.

John Coe (00:31:33) - In the discourse. Certainly politically. That's right. And unfortunately.

Sean Caldwell (00:31:37) - And that's right. There's a lot of people talking about that. Many people listen.

John Coe (00:31:42) - Yeah, exactly. So, you then went to the UVA Darden School talk about that.

Sean Caldwell (00:31:51) - Yeah. Thank you. Yeah, I think it's interesting when I was this is something to share, which was when I was 36 years old, I learned something about myself and I go back. I struggled in high school, as I described, kind of barely got through college. And when I was 36, I learned something about myself that I actually had dyslexia. And I wasn't a big deal for me because I had kind of gotten to the other side of it. I was a partner of Trammell Crows and Children. I was successful in my career, you know, doing better than I ever would have thought I had done at an early age. But it was a real gift to learn something about that later in life.

John Coe (00:32:38) - How did you learn about it?

Sean Caldwell (00:32:39) - it was it was actually my ex-wife was a therapist, and she was, as we were getting to know each other. Oh, really? Yeah. She pointed that out, and and it just this, this big light bulb went on for me, which was.

Sean Caldwell (00:32:52) - Now I understand why this was difficult. And now I understand why. You know, I do my investment memos in the morning or, you know, now I understand these traits that I had built up over time, that I didn't really know why I was doing it. Were coping mechanisms right? There were mechanisms to help and not to just survive. How do I thrive and work around this? And the cool part of learning that later in life is I want to make this clear. It was far. It was the opposite of being any sort of disability. It was a superpower. It was like I saw the world differently than most of my friends or colleagues. I wasn't afraid of failure. And I just, you know, it was a real superpower ahead. And the only thing that by learning that, the only thing that was left sort of unchecked for me. Was I still didn't I still did not consider myself. I was a good professional, but I wasn't a good student. And I said, well, I can change that.

Sean Caldwell (00:34:02) - Let me go back to.

John Coe (00:34:04) - Your therapy was to go to graduate business school.

Sean Caldwell (00:34:06) - That's right, that's right. And it's so it was for two reasons, really. It was like I did a lot of research and I was like, you know, I'm going to, you know, there's this little voice in your head and there's a little voice in all of our heads as to what you're good and what you're not good at. And a lot of it's just bullshit. So I was like, I'm going to get rid of that voice. I'm going to go back and and really master this skill. And so I decided I'm going to go back to graduate school. I decided on Darden at the University of Virginia because I think one thing that's good for the younger listeners to hear is, you know, I'm, I do support. I really believe that pushing yourself in this way really benefits you, but it benefits you at two points in your career. Oftentimes. You know, you someone's going back to graduate school so they can get a new job or they're going back to graduate so they could change careers or maybe try to get up in a job and I and that's great.

Sean Caldwell (00:35:10) - I didn't do it for that. I did it for the latter reason I just described. And the other reason is it's also good for you later on in your career, right? As you're thinking about being on boards and you're thinking about what do you want to do when you retire from your day to day gig? Sometimes credentials matter. Yeah, sometimes they do. And I knew that I would never regret not just having that box checked.

John Coe (00:35:38) - So how did you enjoy it. Did you enjoy it. So did you like the case study method that they have there?

Sean Caldwell (00:35:43) - Yeah. Yeah. It was just so there's a lot of friends of ours in the industry, and it, it pushes you a granted. like, I was listening to, Cameron Pratt, who was an HBS guy. like, I was, I was working during the week and doing an executive program director program. So it was a different format. So there's no way that I'm going to say that the HBS full time case study is as intense as the program that I was in.

Sean Caldwell (00:36:17) - But the program that I was in, you were working 50 hours a week. You were raising a family. You were going on in Charlottesville. You're spending probably 30 hours a week studying. So you're wow, you're doing like a 90 hour a week for two years. It's tough. It was tough. So it was different. But, it was a wonderful program. Wonderful friends. many of them were at my wedding, very, very fortunate, really. It was. It was a lovely experience.

John Coe (00:36:46) - So what if you had to say a few words about what you took away from that experience? What would you say about that?

Sean Caldwell (00:36:53) - So the first is always, to me, it's network. And I don't mean that in the network of who I'm doing business with. the friends I have from that program are the friends that I can go to to say, hey, let me collaborate with you on something. I'm struggling over here. I need someone to chat about this in pure confidence. What do you think I should do? So they're just really remarkable humans.

John Coe (00:37:28) - well, it's interesting, because of when you went.

Sean Caldwell (00:37:31) - Yeah.

John Coe (00:37:32) - You weren't there for a career. You knew what your career was. You were there for more perspective and academic understanding of disciplines that you may not understood before possibly that. And it was you already you know, a lot of people go to graduate business school thinking, okay, I'm building credentials just to go to get a job, qualify for a job. You were already employed. You were already set. You're a partner in a company. That's right. A different a different angle. They're completely different.

Sean Caldwell (00:38:00) - And, and it was just it was as satisfying for me as it was for anyone. So it was it was wonderful.

John Coe (00:38:06) - That's great. That's interesting. So let's see. we talked about Trammell Crow. talk about the formation of Mill Creek and the evolution of that out of the Trammell Crow ecosystem and all that, and you became a partner. So, I mean, I assume you weren't hired as a partner, and maybe you were, I don't know, but how that all transitioned that took place.

John Coe (00:38:34) - Sure.

Sean Caldwell (00:38:34) - So I think if we go back, what I really find interesting about Trammell Crow is and we chatted about a little bit of there's all the spin offs of Trump Crow. again, you know, Avalon Gables, Mill Creek Wood Partners, you know, these are really the pillars of multifamily. And if it's not a spin off for Mill Creek, there's a leader from Trammell Crow that's probably in that organization. Right. And what's really fascinating is and all those spin offs, John, the Crow family never sold off the body. They always would do arms and legs but they were always hold on to the body. And I, I really applaud Harland Crow and Trammell for doing that. And so Mill Creek was really no different in that regard. it was coming out of the oh nine recession. Right. We had built up a TCR, a very large portfolio of multifamily. Harlan was rightfully focused on his guarantee of all those assets. So this is probably ten and 11 where all the challenges are happening in the world, let alone the real estate cycle.

Sean Caldwell (00:39:59) - And, you know, there was not going to be a large Trammell Crow residential platform. You know, and I use the sports metaphor that, you know, Crow Holdings was very focused on playing defense. And we had to but we did see the opportunity to play offense. We all know that in down markets or when you find your best opportunities, those are the deals that have the best returns, just like where we are today. And, Charlie Brindle was our CEO at that point in time. Ron had stepped out. And both, you know, Charlie Brindle and Bill really saw that. We had to but saw that this was a great opportunity to start a new platform. So we went from I mean, gosh, I bet we were. We were well over 13, 1400 people at TCR speak. So but there was only 70 of us that spun off from TCR. So rough. Justice. at that point in time, I was a partner. but there was 35 partners, and I was one of them, and there was 35 associates.

Sean Caldwell (00:41:14) - And, you know, mainly, you know, really only, you know, development, some finance, some construction, and then a couple, you know, chief, you know.

John Coe (00:41:28) - Chief, what year was this? Now when they formed the company.

Sean Caldwell (00:41:30) - So this is, Mill Creek is a spinoff in 11.

John Coe (00:41:34) - 2011, 2011. Yeah.

Sean Caldwell (00:41:39) - Charlie Brendel had a very good relationship with folks and the state of North Carolina. And so we launched the platform in 11. we basically replaced the Crowe family with the state of North Carolina, who was being advised by, Rockwood Capital. So Rock wood, representing State of North Carolina, invested about a quarter billion dollars in our platform to really get us off the ground. And we were off and running. Right. And that's that's how we started. we had so we had 70 people, we had five deals. Right? We, we call them the Fab Five. and so I think an investor said, you know, the you would know as a Michigan of the Fab Five didn't win the championship.

Sean Caldwell (00:42:35) - No. That's true. That's right. So, but yeah, so it was 70 people.

John Coe (00:42:40) - The two North Carolina teams beat them.

Sean Caldwell (00:42:42) - That's right. Exactly. That's right.

John Coe (00:42:44) - Duke and North Carolina. Yeah.

Sean Caldwell (00:42:46) - That's I think it was a that's funny. I think it was a North Carolina graduate who pointed that out the same. Yeah. Got it. Our worlds collide for Michigan. Yeah. yeah. So that's really how Millcreek started.

John Coe (00:43:03) - so. And you had been there how many years prior to that, that start.

Sean Caldwell (00:43:07) - So this is 11 and I had joined the group in 99, so I'd been there for 12 years.

John Coe (00:43:12) - Yeah. So you were already a seasoned developer at that time?

Sean Caldwell (00:43:15) - Yeah. As a seasoned developer.

John Coe (00:43:17) - we met I think, when you were still tcrs, I was, I recall. Exactly.

Sean Caldwell (00:43:21) - I'm pretty sure I'm sure. Ron who introduced us.

John Coe (00:43:23) - Yeah. Well, I remember Sam, too. I mean, you and Sam and you guys were on Executive Boulevard at the time.

Sean Caldwell (00:43:30) - Yeah. That's right. Exactly. We haven't moved far.

John Coe (00:43:32) - We actually, it may have been actually lent for us. Introduced me to you guys, but possibly I just don't remember exactly, but small world. Yeah. Yeah, exactly. So, 2011 and then so really the operating company did it function differently or it's just more or less the same. It's just a different name on the on the banner per se. Or did you have a new theme of what you wanted to do?

Sean Caldwell (00:43:57) - So great question. So how we started was we knew that the West Bank, Trammell Crow Residential, was an incredibly and is an incredibly entrepreneurial organization, of course. So our roots were really in the heart of being an entrepreneur. and that was both their strength, our strength and our weakness. And what I mean by that is before that, spinoff, there were efforts to sell the company. There were efforts to really not recapitalize the company out of defense, recapitalize the company out of office, you know, go out and really do something big.

Sean Caldwell (00:44:46) - And the lessons learned from that was we had 16 offices across the country that were really operating at 16 different confederations. So there were 16 different groups that were running in 16 different ways.

John Coe (00:45:00) - Well, that's the way Crowe ran his company generally. That's right. He set up different partners and cities, and they each city ran their own entity.

Sean Caldwell (00:45:09) - They ran their own entity. Right? I mean, we had a, you know, I think when one group was looking at us, they pointed out they had probably 16 different offices and 16 different performers and, yeah, all these different things. So if you start with that, when you go to go raise platform capital of that magnitude, you can't be 16 offices. You need to be one company. Yeah. So the biggest shift happened from Trammell Crow to Mill Creek was just that. And what I and this is a great conversation to have because the strength of Mill Creek and the tension in Oak Creek is that we've taken, we've held on to the entrepreneurial spirit of Trammell Crow, and we've overlaid the institutional discipline that's necessary to run a large organization.

Sean Caldwell (00:46:04) - And the tension that I feel when I try to work around and, well, all of us in leadership do. Is every day we get a little bit more institutional. You're always trying to get better as a company. How do you make sure you hold on to that entrepreneurial spirit? Interesting. That's huge. That is that is not an easy challenge. We are not always succeeding in that. But my personal passion is to make sure that real estate is still a local business. At the end of the day, the local partners are driving that business, but they're doing it the Millcreek way. Okay. And that difference is what makes Millcreek different than.

John Coe (00:46:51) - It's actually interesting. Yeah. Yeah. Well, when you broke away, you had to find a financial partner. That's right. And so the financial partner looked at you and said, wait a minute. Now, am I investing in one company or 16 here? No.

John Coe (00:47:06) - Yes. So, you know, you're right. He probably they.

John Coe (00:47:11) - Probably said, you know, you guys need to get your act together.

Sean Caldwell (00:47:14) - Exactly.

John Coe (00:47:15) - And and help.

John Coe (00:47:17) - Us figure this out.

John Coe (00:47:18) - Because, you know.

John Coe (00:47:19) - I can't we can't just figure it out here and look at 16 pro formas and and all these deals and the deal. And not only that, the corporate structure is probably different in each one. That's right. So the question is how did you amalgamate 16 operating partnerships into one. So there's let's be an interesting story there.

Sean Caldwell (00:47:37) - Yeah. So that's that's that's a great two hour podcast. And I think if I'm brutally honest John, not everyone makes that transition. Yeah. Right. It's

John Coe (00:47:51) - There are a few parachutes out. Right.

Sean Caldwell (00:47:53) - There were there were a few parachutes out. Right. And, and there's no commentary on who left who. But I do remember looking around one day, and I turned to Bill and one of the early Mill Creek meetings, and I'm like. And I looked around and said, these are all really good, like minded people. Like, we ended up whether it was intentional or by accident, we ended up with a group of people who wanted to be entrepreneurs, but wanted to also be part of something of a company.

Sean Caldwell (00:48:24) - Yeah. And like when I interviewed people today, you know, I do not judge, you know, if you're the developer who just wants to do your deal and get your piece of the promotion, like if you want to do it the old TCR way, I get it, that's a that's a good model. there's pros and cons with it that I lived with. I like this model better, but there's pros and cons within it, if that's what you want to do. This may not be the company for you. Right? There's a better company over here for you. You can go live and die by it. You know, we're a local partnership. We're part of a national partnership within the business on the local level that where we're having the the benefits and sometimes the drawbacks of a part of a bigger company. So, and your question, though, is, you know, it's a massive evolution, right? That what we just discovered is what we just discussed was where Mill Creek started.

Sean Caldwell (00:49:23) - I mean, that's 13 years ago. We've changed completely since then.

John Coe (00:49:28) - So but you, you, you said you talked about your core values. So you kept those constant. Yeah. But of course the real estate markets changed. Yes. Yes. As dramatically probably as the company has.

Sean Caldwell (00:49:41) - Yeah. Yes.

John Coe (00:49:42) - So to adapt to those things you have to you have to be flexible. So, you know, we talked a little bit about your career. How did your responsibilities expand? So you start out as soon as a project manager on a, on a, on a, on a job or two and then just grew from there. How did you how did that grow?

Sean Caldwell (00:50:02) - My personal growth within the company.

John Coe (00:50:03) - Right.

Sean Caldwell (00:50:04) - So like Chip and Bill gave me way more responsibility than I deserved. we were the entry level position was a development associate, and Sam Simon and I were the two developers. You know, Sam's a friend of yours says hello, and, I think at one.

John Coe (00:50:20) - Point he's on the West Coast now.

John Coe (00:50:21) - Right?

Sean Caldwell (00:50:21) - He is. Yes.

John Coe (00:50:22) - Or he's. I haven't seen him a long time.

Sean Caldwell (00:50:24) - Yeah. So he is, a leader in our fundraising business. So another way that we've evolved. So he's moved from the East coast to the West Coast. He has moved from development to fundraising, and he's doing fantastic.

John Coe (00:50:38) - That's great.

Sean Caldwell (00:50:40) - but Sam and I probably had, gosh, you know, 910 deals between us. neither was probably knew what we were doing. we're making mistakes left and right. And it was a so this is in the early 2000, when Washington, DC was probably the best multifamily market in the United States. You know, the.com boom.

John Coe (00:51:06) - I know I remember a conference call with you, Sam and Sherry Brown. Yeah. On a deal? Yeah, on a financing one time. I do remember that distinctly.

John Coe (00:51:17) - In the early 2000s.

Sean Caldwell (00:51:19) - Yeah. We were very, very blessed to have, Sherry Brown as our CFO back then. And I was chatting with her last night, so it's, Yeah, she's still a great mentor for us.

John Coe (00:51:30) - That's great. Yeah. That's great. So it's just, you know, this evolutionary process. So how did you grow your responsibilities then?

Sean Caldwell (00:51:37) - Oh, personally.

John Coe (00:51:37) - Yeah.

Sean Caldwell (00:51:38) - So I think it was, my responsibility is there was a natural progression that fortunately, it was a meritocracy. You know, commonality between Trammell Presidential and Mill Creek was that of a meritocracy. So as long as you, you know, did the right things and worked hard and frankly, created value, right. sure. there was always the promotional opportunity. So. Steps along the way. It was I became a partner of Trump Crow and in the Middle Creek years, I stepped in the chip bars role and took over the, the DC office and oversaw, at that point, both construction and developments. We were integrated differently where construction would report to the. Developer. so I ran that operation for.

John Coe (00:52:31) - Was was construction just vertical construction or did you do underground and that kind of thing?

Sean Caldwell (00:52:37) - Yeah, we've done is we've always been a our own general contractor.

Sean Caldwell (00:52:42) - okay. It's been a core competency of ours. and so we've always, I think I would say, John, probably 98% of our deals were the GC from start to finish. and to put it in perspective, maybe if I can pause for a second and just, you know, it's pretty fascinating to think about where Mill Creek started with five deals and 11. And if you fast forward with basically a construction development and a couple finance works. If you fast forward to today, we have 25,000 homes under management. 15,000 homes under construction and almost 20,000 homes in the pipeline. Wow. So that's 60,000 homes of multifamily. We're about we have 600 folks on the property management side, just over 400 folks, and construction up north of 100 folks in development. And probably I think we're probably right around 1250. Succeeds today.

John Coe (00:53:56) - So, That's traumatic. It was really.

Sean Caldwell (00:53:59) - A really dramatic growth over, you know, just over a decade.

John Coe (00:54:04) - so that's fantastic. So I didn't want to get deep into the construction side, but in fact, I didn't realize that you that was kind of a core part of the business.

John Coe (00:54:16) - It's interesting because that's unusual for most development companies to have that.

Sean Caldwell (00:54:21) - it is, and I was when I was listening to and I. And it works for us. You know, I listened to the wonderful interview you had, Cameron. And they made a different business decision. Right.

John Coe (00:54:32) - They completely left construction and property management.

Sean Caldwell (00:54:36) - As I'm listening to him and I'm thinking about, I think it was the right decision for, for. We're fortunate. We're. You know, 24 markets. Yeah, right. And so it's absolutely the right decision for us. But I sincerely appreciate, as I'm listening to the challenges that he had or a lot of our competitors, when, you know, I'm not sure which one is probably profitable on a per person basis, but the way that he's managing, for the threats doing, I get the business decision. It's not easy to.

John Coe (00:55:13) - Well, the analogy I give to your company, and I sat next to him last night was I was it last night or a night before last at the Oval? I was Toby Pesto.

Sean Caldwell (00:55:26) - Oh, excellent. Yeah.

John Coe (00:55:27) - And, you know, so they're very vertically integrated.

Sean Caldwell (00:55:32) - Very vertically integrated. Yeah.

John Coe (00:55:34) - Somewhat analogous to you guys.

Sean Caldwell (00:55:36) - Somewhat analogous, I think. So I like Toby's a great guy. I've gotten to know Toby well over the years. Obviously Chip knows Tom very well. One difference that separates us that I is we do not do anything third party. Right. So our management company.

John Coe (00:55:54) - And it's only your own assets. Correct.

Sean Caldwell (00:55:57) - So and we're proud of it. Right. You could go make a lot a lot more money a lot more fees by going third party. But every person in our company property management, construction, asset management, you know, everyone, every they wake up thinking about the Mill Creek assets, right? The Mill Creek communities, our investments. And we did third party management on the property management side when we were at TCR. What we found, right or wrong, was. The best in the business. The best in our business was spending all their time focusing on.

Sean Caldwell (00:56:43) - The other clients. They were trying to grow their business. And said well we'll give up on that revenue to have their focus and skill set and all their energy and have all of us rolling.

John Coe (00:57:02) - Yeah, well, that's why the world has a lot of different people, you know?

John Coe (00:57:06) - And that's really. You got it. You got.

John Coe (00:57:09) - It. because, you know, I just interviewed Henry Fonda. Rapoport. Yeah. And he brought the entire third party, leasing and management, you know, brokerage business to the Rappaport Company when he came over from Charles E Smith. And it was just interesting to hear how that transformed their company into a massive retail engine. And Gary had had that. The philosophy you were talking about before, just doing my own deals. That's right. He had to do some third party management during the early 90s. There's a lot of companies had to look at fees and figure out how to stay in business. That's right. But, you know, he was doing a lot more just more of his own business.

John Coe (00:57:50) - And then suddenly all this came in was like, whoa, yeah, tremendous growth. But it's you guys have looked at it geographically, it sounds like to me. So you've grown by looking at other markets, keeping to your sticking to your knitting and not third party services per se. That's what it sounds like.

Sean Caldwell (00:58:07) - Correct. So we we never wanted to we wanted to stay. The culture was to make sure we stayed in our markets. And then the way that we grew, which actually is another crossover into another one of your podcasts, is strategic.

John Coe (00:58:20) - Planning. Oh, there we go.

Sean Caldwell (00:58:21) - Right. Yeah. Right. So Hewlett Darby, so who we actually use for our strategic planning. And so a core strength of ours, as Charlie discussed, is. You know. Do you have a strategic plan. Do you follow it and then do you revisit it. in every one of the growth areas that we've made as a company, whether it's regional growth, going to a new city, whether it's expanding our product line, getting into the build for rent space, whether it's attainable housing, whether it's doing investment management and fun side has all come out of that strategic planning process.

Sean Caldwell (00:59:15) - So we have, So when you talk about growth, it's like it's a very intentional. Sure, every couple of year process, stepping back in and saying.

John Coe (00:59:25) - So what length do you write that plan for just out of curiosity.

Sean Caldwell (00:59:30) - So it's a I think the last one we ran was a ten year vision ten that gets revisited every couple of years.

John Coe (00:59:39) - Oh, so ten with A22 resets, something like that.

Sean Caldwell (00:59:42) - Yeah. Okay.

John Coe (00:59:42) - So it's interesting because Willie Walker I don't know if you heard the podcast with him. Yeah. He's one this is a five.

Sean Caldwell (00:59:47) - Year is the five year. Yeah. Yeah.

John Coe (00:59:49) - He resets every five. And he's you know religious to that plan.

Sean Caldwell (00:59:53) - Yeah. Yeah.

John Coe (00:59:54) - And you know the success is you know I mean 16 times multiple from his start. Oh that's.

Sean Caldwell (01:00:02) - Amazing. That's amazing.

John Coe (01:00:04) - He's.

Sean Caldwell (01:00:05) - Yeah he's he's he's a it's a remarkable growth story. And I think ours is we will we try to have a longer term vision but also some shorter term goals. Right.

Sean Caldwell (01:00:16) - What was interesting for us is I was in the most recent, strategic plan. And the reason why we had it was we set a goal for where we wanted to be in 7 or 8 years. Volume wise. Yeah. And we got there in 18 months.

John Coe (01:00:33) - Oh my goodness. Yeah.

Sean Caldwell (01:00:35) - So we got to a place where we were ready to develop like 8000 homes per year from 2 or 3000 per home. And Bill came in and restructured the organization to be more vertically integrated for volumes. And we just took off.

John Coe (01:00:51) - So when you look back in that at that accelerated growth path and you sat down for the next planning session, how did that happen? Yeah. And how what do we want to continue in this space? Are we going to become a, you know, a behemoth? And we're we're going to be, you know, out of way over our skis, you know, too quickly because can you stay ahead of that business? I mean, you have to hire around that. There's just so many big decisions you make trying to stay at that kind of pace.

Sean Caldwell (01:01:22) - It's. Yeah, exactly. And it's exactly. And we actually what was amazing about that is we, you know, of course the joke was, well, we just didn't set the bar high enough. Right. And and we're all kind of looking around and going like, well, we really did. It was hard. It was not easy. But we did, we saw that once we restructure, once we got everyone and also just a alignment of interest that, yes, we can do this. And the simple metric was just, you know, can you do one deal per division per year versus 0.7.6? And what does it take to do 1.5 or maybe, you know, and we realized that for a company of of Mill Creek stature, access to capital, talent pool and a leadership that has many layers of succession already built into it, there's no reason that we can't be building, you know, on average, multiple years in a row, 10,000 homes per year. And now you're going to be market dependent, right.

Sean Caldwell (01:02:30) - There's going to be market cycles like we're going through now because we really try to visualize and structure. So we could have it's worth holding for a long period of time.

John Coe (01:02:40) - Interesting that you know you go along with this rapid growth pattern. Yeah. And then all of a sudden this very black bird starts flying out of the horizon, right? Known as the pandemic that lands on your lake. Yeah. And says, oh, my God, the Black Swan is here. What are we going to do now? That's right. Yeah. And that came out of left field for almost everybody, all of us. And so the question is how do you manage a process like that? You know, if you've been in the business in the early 90s and in 2008, you would understand what those things come out of left field sometimes. That's right. Well, I think that's.

Sean Caldwell (01:03:19) - That's the benefit that we have when our leadership has had this sort of experience like you've had. Right. So Bill's been here for 37 years.

Sean Caldwell (01:03:32) - I'll just take an example, you know, not a just a, a discipline we have in our investment committee, in our committee is you can never be levered on a development deal more than 65% lower cost. You just we will not do it. If you have to get leverage higher than that to make the deal work, we're not going to do the deal. So our average leverage is probably, if I'm being honest, it's probably around 5,960%.

John Coe (01:04:01) - Across your lenders. Love that, right?

Sean Caldwell (01:04:04) - And you would think that as you get more conservative, relatively speaking, it's going to be harder to get. It's harder to make your IRS work right. And so it's gonna be hard to get deals done. But what has the intentionality behind that has yielded the fruit of when we started Mill Creek, I was looking at our list. When we started Mill Creek, there were 15 investors that we thought were fantastic investors. For us sitting here today, John, we have. 47 active capital partners that are investing in the.

Sean Caldwell (01:04:41) - So as we've gotten more conservative or thoughtful and prudent. More institutional and entrepreneurial, more capital has approached us in wanting to invest. Maybe that structure in that discipline does not yield the biggest promotes on every single deal, but it yields a much more predictable and sensible pipeline, and it certainly protects you from downside when you're in the market. Where I wanted to throw this out there in the past 18 months, we've refinanced or restructured. $3.5 billion worth of debt. So that's all just you know, and they're all they're all friendly extensions and rfis and all that.

John Coe (01:05:29) - So it's A11 philosophy I want to get into a little bit. And, and it kind of segways to my next question to some extent. What is your when you look at a site and a project, what's your your projected hold period on a on the job? And to me, the whole period in reality and in projection determines not only the I mean, the philosophy of the company and the strategy of the company and the structure of the company.

John Coe (01:05:58) - All those things come into play when you're talking about what how long you're going to hold assets. Great question. So go go into that a little bit. We'll do.

Sean Caldwell (01:06:07) - So we look at we first let me go back to the basics that we have to look at everything today. Today okay. Today's rents today's cost today's expenses. Today's yield okay. It can never be. It never. We're not going to trend anything to make it work. Does it work today. Does it work in today's economics. And then we really look at it. And they are modeling internally is kind of a typical development model. Right. You look at it like okay we're going to we're going to build it. We're going to lease it up, we're going to get it to stabilization. And six months after that, what are the returns to look like. So that's how we model it internally. But in practice what is happening or what we're as a company where we've really grown and set us apart is about a half to two thirds of the business is long term holds.

Sean Caldwell (01:07:04) - And somewhere between third to half of the business is as we're doing it, with capital that wants to sell the asset on.

John Coe (01:07:10) - The other side, it's more of a merchant.

Sean Caldwell (01:07:12) - Strategy. So there's both a merchant and long term strategy with an interesting business. That's interesting. Right. So I used to joke I mean TCR we sold everything.

John Coe (01:07:22) - Yeah it was merchant.

Sean Caldwell (01:07:23) - It's merchant. It was land. Flips were the best thing ever right. Yeah. Yeah 100% of the.

John Coe (01:07:28) - Profits you've driven all the way.

Sean Caldwell (01:07:29) - Right? Absolutely. So whatever we could, the quicker we could sell something. Actually, this is a fact. I did a lot of deals with TCR. I never took one deal to stabilization.

John Coe (01:07:41) - Incredible.

Sean Caldwell (01:07:42) - Yeah, I bet I worked on 12 deals. Wow. Every single deal was sold before stabilization. Sometimes a land flip, sometimes a condo flip, sometimes a kind of sale, sometimes at 50, 60, 70%. And never once did I have to get the stabilization. And now.

Sean Caldwell (01:08:01) - You know, two thirds, a third or I'm sorry, half to two thirds of our investors are holding it for 7 to 10 years. so it's a we're a much more diverse. AUM driven. So when you.

John Coe (01:08:16) - Look at a deal, do you know up front whether that's going to be a merchant deal or not? Not really. You don't know?

Sean Caldwell (01:08:22) - No. It's, we have opinions. You know, you look at good real estate and good economics and. Right, you know, you can sort of know, like if you get into a garden, suburban community, really low bases, you can kind of look at those economics and say, okay, that feels like the investor who wants the 20 IRR and wants to churn it pretty quickly. So you sort of have an intuitive feeling. and then conversely, you're in a really core location where probably the yield is a little lower. Like that's probably going to attract someone who has a more ten year horizon. You get intuitive. But honestly Joe, I have John, I had examples of where it's been the opposite of that doing a suburban deal in Boston where Ecker is our investor and they're going to own it forever.

Sean Caldwell (01:09:16) - Yeah.

John Coe (01:09:16) - That's their mission. Yeah. So well, that gets into the question I was going to talk about structurally as a company. Yeah. you know, a lot of your competitors have not only rolled up publicly to form a REIT. Yeah, but some have formed a private right for basically capital raising purposes, you know, to be able to do a line of credit using the entire portfolio as a, as a, you know, your balance sheet instead of deal by deal, one off financing on every deal, or maybe roll up a portfolio to some extent across collateralized through however you want to structure it. Yeah. But you know, what's been the thought process and have you looked at it as a roll up potentially just out of curiosity?

Sean Caldwell (01:10:01) - It's a great question. I'm going to go back to Willie Walker for a second, okay. Sure. And he said, I heard him say he goes, you know what? No one goes public to have fun. It's a great line.

John Coe (01:10:14) - But he does.

John Coe (01:10:15) - But he.

Sean Caldwell (01:10:15) - He personally.

John Coe (01:10:16) - Does. He does, he does.

Sean Caldwell (01:10:18) - He's having fun. yeah. But he goes, you do it for access to capital, right? Right. I mean, that's at the end of the day you go, at least you go public. So the question you have to ask yourself is, do you have access to capital? To to run your business? And would doing something like that attract more capital? Because at the end of the day, it's the ability to raise capital is and the talent you have in your company. Those two things combined will define whether you can, you know, have volume or not. And we're very fortunate first and foremost with the people we have. Organization and therefore were very fortunate to raise the capital that we're. almost all these, you know, a large portion of our business are one off joint ventures. We do have multiple SMA funds going. So, you know, a $400 million fund that will have 7 or 8 deals rolled into one.

John Coe (01:11:24) - But is there a theme behind those funds, or is it just a pocket of capital you get from an investor and say, okay, here's the amount of money I've got a seven horizon. Get it invested, and then you sell it off or, you know, roll it out to something else.

Sean Caldwell (01:11:41) - Right. So we so from the theme is that. It's the same sort of capital partners that we're doing business with on the JV side that just wants the benefit of having multiple assets with some look at a pipeline and say that they get, you know, they don't they want to make sure that they get decent looks at deals.

John Coe (01:12:03) - So it's more than a strategic relationship where, you know, you have a box to fit in. That's right. That's what a lot of guys do. And they set up a box that fits in that box. Then it's it's approved. That's right. But you're you're aggregating capital in a, in a box. We got to move this money out of here and get deals into it and that kind of thing.

John Coe (01:12:24) - So okay.

Sean Caldwell (01:12:25) - So that's I mean that's so we our longer term view a lot of our assets have that longer term view either through a fund life or one off investors who are built core. In each of those instances Mill Creek is crystallizing there. Promote maybe leaving some money in the deal, but generally finding a way to crystallize the. And then we'll, you know, oversee the equity through A or M will oversee the property management for 7 or 10 years. So we're enjoying that side of the business. But it comes back to also, I think this is an important concept when you think about going public. the values aren't there today. Right. No, they're they just aren't. But a wise advisor to us. you know, Dick Michaud was on our board for a long time. So that was wonderful. And I remember him saying once,

John Coe (01:13:24) - So he was chair of Avalon and he was on your board.

Sean Caldwell (01:13:27) - He had left Avalon.

John Coe (01:13:28) - Oh, he left Avalon.

Sean Caldwell (01:13:29) - Okay. Tim Naughton had taken over.

Sean Caldwell (01:13:31) - Okay. And he was retired and living in the area, and he. Okay, you know, he came from TCR. Of course. You know.

John Coe (01:13:37) - The culture.

Sean Caldwell (01:13:38) - Yeah. So he sat on board. He was awesome. And so I remember him saying to us one day, you know, you don't have to go public. But if you build the organization with the discipline to go public, every exit strategy will be at your disposal. Right? So if you think about governance right and culture right, and how you run your business and how you present yourself, yep. Then you can do whatever you want. And I think that's a guiding principle that's been lovely for us.

John Coe (01:14:12) - Yeah. So you're on the surface. You're you're on the surface. You're like a public company, but you're really a private company.

Sean Caldwell (01:14:19) - Yeah, we're we're still entrepreneurial. We're not answering to quarterly earnings calls. Right. We're still making, you know, none of us have to get grilled by analysts.

John Coe (01:14:28) - But you have a board of directors.

John Coe (01:14:30) - You have a.

Sean Caldwell (01:14:30) - Board, right? we have a board.

John Coe (01:14:33) - We have all the governance issues.

Sean Caldwell (01:14:35) - You have a management committee. so we really operate, you know, a gold standard.

John Coe (01:14:42) - So. Yeah. And I assume you have audits very similar to public companies to some extent. Right.

Sean Caldwell (01:14:49) - You do we do we you know, we value our company every quarter and we do that through an audit system. And that's interesting. Yeah. I sit on an audit committee and, you know, I mean, we that we very much value ourselves in a, in a public manner.

John Coe (01:15:08) - And I'm guessing that the RCL people advise you to do it that way to some extent, to give you some structure and organizational correct ability.

Sean Caldwell (01:15:17) - Correct. And it's and it's really I think what's an important concept here is all of that makes for an evergreen company. Yeah.

John Coe (01:15:30) - Right. Continuity. It's so important. Yeah I'm forming a nonprofit right now. So I'm trying to build continuity with that. I mean, I can be a one man band and do what I do.

John Coe (01:15:40) - Yeah, but I'd like it to last longer than my life, if possible. Be wonderful if I can. Finger crossed.

John Coe (01:15:47) - That's a goal of mine. So we'll see. So, let's go now into.

John Coe (01:15:52) - Your transactions, some of your local deals and. Sure. the first one I have on my list here is Madeira CDC. I guess I assume you pronounce it, which is the former. Yeah, which is the former Italian embassy in town. And I'm going to guess I'm speculating. This is not a deal that you're going to merchant deal. This is one you're going to hold long, am I right?

Sean Caldwell (01:16:14) - That is 100% correct.

John Coe (01:16:17) - Talk about that deal.

Sean Caldwell (01:16:18) - Sure. So that was a that was a very, very special investment especially community is think you know this was the historic Italian embassy. It was built 100 years ago. the first building permit was signed by Mussolini.

John Coe (01:16:35) - Isn't that something? Yeah. Oh, my God.

Sean Caldwell (01:16:37) - That was neat. And, I sort of joke that.

John Coe (01:16:40) - You'll do che.

John Coe (01:16:41) - Yeah, exactly.

Sean Caldwell (01:16:44) - I got to sign the second building permit, so maybe that says something.

John Coe (01:16:47) - About the management skills. Yeah. That's funny.

Sean Caldwell (01:16:51) - Yeah, but it was great. It was a it was a lovely community. great story behind that building. That's really fascinating about that. Well, first of all, it was a great story, which is that embassy was owned by three different developers that tried to develop it and failed. one of those developers who bought it, tried it and failed was Christian Leader. So when he was at the Wizards, he was trying to get into, oh my goodness.

John Coe (01:17:17) - Really?

Sean Caldwell (01:17:18) - Yeah, he was trying to be a developer with his colleague Brian Davis, and he bought it and and it didn't work out that well. And you know, I'm sure he tried and but I did a as I was pitching our investor, which was the state of North Carolina, and all of them were Tar Heels, I absolutely brought that story.

John Coe (01:17:36) - They lit up and they were they.

Sean Caldwell (01:17:38) - Were ready.

John Coe (01:17:39) - To go.

Sean Caldwell (01:17:40) - And said, you.

John Coe (01:17:41) - Know.

Sean Caldwell (01:17:42) - If we can't do it, we can.

John Coe (01:17:43) - No love lost there.

Sean Caldwell (01:17:47) - So it was what what was I'm very proud of this team locally is a lot of these investments that are on here are extremely complex, more complex than Gil would like me to take on. And the execution on this was exceptional. I mean, they they took on an embassy that was 100 years old, and they built it on schedule and on budget, and it was just a giant, giant custom home. so, That was a special community. It was, it delivered in a horrible time, you know, to deliver in the pandemic.

John Coe (01:18:26) - How many units in that project?

Sean Caldwell (01:18:28) - There was 134 homes in that community. Okay. And, you know, was on 16th Street. So you think about beautiful building that's delivering in the pandemic and all the challenges that we saw with, you know, all the challenges we saw with the District of Columbia and the pandemic. And so that that definitely, struggled.

Sean Caldwell (01:18:52) - So. Cool.

John Coe (01:18:56) - the next one is Founder's Row, which you mentioned earlier near where you grew up. So talk about that project.

Sean Caldwell (01:19:03) - So yeah, it was three blocks from my, my home in Falls Church, as the. We were buying 14 parcels, one of the largest assemblages ever put together. One of those parcels was the 7-Eleven, where I used to buy a beer as an underage girl. There's all these great connections. but that's a you know, that's a fascinating investment across Harbors or Capital Partners. And PNC is our lender, and it's a, you know, 400 home community with 90,000ft² of retail. So.

John Coe (01:19:38) - what's the structure of the buildings?

Sean Caldwell (01:19:40) - so it's, it's high density stick. So it's five stories of stick over one a retail. we have age restricted homes in there, which we've never done 55 and over, because of the local school system, but a small amount of 70. What's really interesting about that deal, and, you know, one of the bigger mistakes that I've made in my career was we, I agreed in early on that the retail would be anchored by a movie theater.

Sean Caldwell (01:20:13) - That was a condition of the city. And the deal wouldn't have happened if I didn't agree to the theater. So it was just a very clear business. Right? Do you want to do the deal or not? So those were there was no like working your way around. If you didn't agree to the theater there was going to be no deal. And I did and Joe Muffler and the team of we've had this vision ever since. But in the I mean, in the pandemic, we closed the, you know, we closed with a theater signed lease and in the theater in the middle of the pandemic, the theater just goes bankrupt. Yeah. So then we're negotiating with a new theater in the middle of a pandemic. And if you if you if you ever want to feel do a negotiation when you have no leverage, try and try negotiating with the theater in the middle of the pandemic where you need to have a theater, right. And the market's better now. But we did it successfully.

John Coe (01:21:11) - That would have been a one where you sit down with the city and say, how about a public private partnership?

John Coe (01:21:19) - You guys own the theater? Will own the residential.

John Coe (01:21:22) - Yeah, it was we Joe.

Sean Caldwell (01:21:27) - Joe Muffler.

John Coe (01:21:28) - With.

Sean Caldwell (01:21:29) - That deal. So well in that decision and he you know, I worked on it for three years, four years. And he's worked on it for ten years. And they should they should put a monument in Joe's honor in the City of Falls Church. But, you did a remarkable job bringing this one success. And it's, the theater is going to open next year. And we have.

John Coe (01:21:52) - Who's the operator for the theater?

Sean Caldwell (01:21:53) - Paragon. Oh, okay. So good group. so very good about them. Good. but he has a, there's a restaurant there called Ellie Bird now, which is New York Times ranked it the best restaurant. And Virginia and it's a it was a difficult deal. Way too much complex complexity to put on the team. But. It will be a special community. It'll be a special investment.

John Coe (01:22:21) - Is this project close to what EIA did with their project? Yeah. Okay. Which was tied into their schools there.

Sean Caldwell (01:22:29) - Yeah. Right. Next. Right. A part of the George Mason High School.

John Coe (01:22:32) - Right? Yeah. Right. Interesting. So the next one I have is Madera on H Street northeast. Talk about that project. And I interestingly, back in oh, boy. It was probably 2008 or 9. I just wandered up and down H Street because it was really, you know, I think the first deal that I remember being done was Jim Abydos, the Children's Museum update. I think that was really the first project that I remember being done on that segment of the, of the area. And then I saw Gary Rapoport s redevelopment, with Chris Smith of the two buildings on eighth and H Street, which is quite a project.

Sean Caldwell (01:23:13) - That's quite a project. It's you know, and then you have JP Morgan with Insight at Apollo.

John Coe (01:23:19) - That's right. That theater. Yeah. Yeah. Wonderful. That was an incredible project. Yeah, yeah.

Sean Caldwell (01:23:24) - So we and we we missed out on that initial run on H Street.

Sean Caldwell (01:23:28) - Right. There's a lot of folks who were, you know, a little bit more, had more forethought than I did. So they.

John Coe (01:23:34) - Stan Slaughter did a deal there.

John Coe (01:23:36) - Really.

Sean Caldwell (01:23:37) - Well there. Yeah. And, yeah. So it's a it's a quarter that's that was, a vibrant revitalization of the district, this opportunity, this was the land that was owned by JBG.

John Coe (01:23:52) - Oh, okay.

Sean Caldwell (01:23:53) - So they were the seller on it. you know, they they had to sell some of their assets off.

John Coe (01:24:00) - Was it entitled at the time.

Sean Caldwell (01:24:02) - It was entitled it was entitled, it was, I mean, like the. That's going to be an interesting investment. It's an opt zone deal. Our investor is an opt zone investor. So they're going to they have a ten year horizon on it. So they're going to be very happy right. I do think that area and DC has been hit pretty hard. Yeah. So it will be like when we close that deal. That was a theme deal.

Sean Caldwell (01:24:34) - That was a sub6 yield on cost.

John Coe (01:24:37) - Yeah.

Sean Caldwell (01:24:38) - And that's with the low interest rate environments. Oh, right. So we've got patient capital. the execution is really strong on that one. And so it's one of those things where as a developer, you have to look at it and say, the investor is going to be happy we put the right capital partner in that location. Pretty confident the promotes won't be there, right? But we've also low leverage, so there won't be any distress there. And it's you just you execute it.

John Coe (01:25:12) - Where is it now on the on the operational standpoint.

Sean Caldwell (01:25:15) - So it's under construction.

John Coe (01:25:17) - So so you're not even in lease up yet.

Sean Caldwell (01:25:19) - Not even on this site. So we're I think we're probably 8 or 9 months away from anything.

John Coe (01:25:25) - From delivering homes there. Is that it? Bladensburg and H.

Sean Caldwell (01:25:28) - Yeah. Yeah. Exactly. So 17th and H. So just just a couple blocks in the lead. We got it. So it's a I think that.

John Coe (01:25:37) - Mark you're near the star intersection then.

John Coe (01:25:39) - That's right.

Sean Caldwell (01:25:39) - Exactly. Yeah. Yeah. So it's a we'll see how that one does.

John Coe (01:25:44) - I'll never forget the early 90s. I went out and looked at Hechinger Mall to refinance it. Yeah. For the Hechinger family.

Sean Caldwell (01:25:50) - Oh sure. It I.

John Coe (01:25:52) - I said I was going to have a hard time with this one.

John Coe (01:25:57) - That market was a little different then a little different.

Sean Caldwell (01:25:59) - That's right.

John Coe (01:26:00) - Yeah. Yeah.

John Coe (01:26:04) - So Madera. Clarendon. Yeah.

Sean Caldwell (01:26:06) - So that one is I mean, I just absolutely love that investment. It's outside of the it's a great example of terrific real estate. It's where the old sporting health gem was located right on Washington Boulevard. And I think I honestly think that it's one of the best, you know. Best pockets of real estate in the DC metro area. so it's one of our funds that invest in it. So they're thrilled and it comes back like it's a great example of great real estate, good economics, good partner in our funded quadrille. And we're partnering with pro Mark who's a local developer.

Sean Caldwell (01:26:47) - They're wonderful. And but right now we have a math problem right. The values aren't there because the capital itself.

John Coe (01:26:52) - So you know so it's a long term hold.

Sean Caldwell (01:26:55) - It's a long term hold. So yeah yeah it's a long term hold. But it'll be a terrific investment long term.

John Coe (01:27:01) - So well Clarendon is just you know an amazing market.

Sean Caldwell (01:27:05) - Yeah it really.

John Coe (01:27:06) - Is I think McCaffrey is really what made that.

Sean Caldwell (01:27:08) - Market McCaffrey.

John Coe (01:27:09) - Their project.

Sean Caldwell (01:27:09) - And market comments. Yeah. Yeah absolutely. That was an amazing project.

John Coe (01:27:14) - Yeah. and then Madeira mosaic which is that Eden Project. That's right.

Sean Caldwell (01:27:21) - So we were the I guess Avalon was the first one to develop in mosaic and we were the second, but I t's the Avalon guys that we got a better site. And, so that was a terrific investment. I mean, I really, you know, Eden is a unique group to work with. very good at retail. But I think when I learned from the Founders Row experience versus mosaic is, mosaic is perfect for us, right? We're very creative with partnerships.

Sean Caldwell (01:27:53) - Eden says a group is better at retail than we are. We're doing good retail, Founders Row. We're doing a good job there. But Eden is fantastic at it, right? Right now we're partnering in Texas and Carolina with the asana Group. Right there are the spinoff units. You know, we very good at doing creative structures. Let them do more on the retail side. We'll create a lot of value. We'll take construction risk. And that's what we did here, right? We came in, they were the master plan. They had the benefit of the master plan value from a land value perspective. and then we built it out and we deliver them the retail, and they just crushed the retail. And then we had the value of the multifamily above it. So, that's done very well. We still own it long term. Hold again. that one is with the state of North Carolina, our original platform partner, but it's, mosaic's been special for us.

John Coe (01:28:49) - Well, it's a I mean, that's a critical mass project that just it's similar to Urban Mart, you know, their their union market deal in DC.

John Coe (01:28:58) - It's just they build this critical mass that just everything kind of surrounds around it.

John Coe (01:29:02) - It's, what's.

Sean Caldwell (01:29:03) - Really interesting about that and you could talk a lot about this is we did a big mixed use deal right up the street. So we did Dunmore Metro. it was the Avenir investment with JP Morgan. Okay. And that was anchor. And you just think about this. You like this? Which is? It was anchored at Metro with the grocer, with inline retail.

John Coe (01:29:26) - Okay.

Sean Caldwell (01:29:26) - And mosaic is not at the Metro, right? No real grocer. So usually all day long would say this is the better. Right? But the reality is that what Edens created, where there was a nightlife there, a vibrancy there. Whereas you describe there's there's real synergies there. The rents are much higher in mosaic in there at the mall.

John Coe (01:29:53) - So from an academic standpoint, you look at it and say, wait a minute, does this make any sense?

John Coe (01:29:58) - That's right.

Sean Caldwell (01:30:00) - Yeah. And it's you're 100% right. And you would have said they would at least be equal.

Sean Caldwell (01:30:05) - If not, put a if not put a metro premium on it.

John Coe (01:30:08) - So tell me how you were sold on doing the deal at mosaic even after doing your Dunmore deal, or was that I assume that was done first, right. Don Loring was.

Sean Caldwell (01:30:17) - First. then we ended up mosaic caught up, and then we ultimately did mosaic, too. really, it was a belief, you know, in what Edens was pulling off. they at that point had pulled off target, Angelika Theaters and as they were like as they were like, you know, I'll throw us under the bus, you know, we're pulling off nail salons. They're pulling off chef driven restaurants.

John Coe (01:30:47) - Right. Okay.

Sean Caldwell (01:30:49) - And you sort of see what's happening. You're like, all right, I'm really glad it was my urgent care. And they have these, you know, amazing vibrant restaurants and you know I don't know on the retail side who did better financially because there was such credit challenges, you know, at in the early years in mosaic.

Sean Caldwell (01:31:07) - But just from a livability perspective, you could really see the value that what mosaic, what what Edens was creating was special. And. The takeaway for the for the younger audiences. You realize that's not us. We will pay them for that.

John Coe (01:31:26) - Well, for the listeners, if you want to know more about Edens, listen to Jodi McLean's interview with me and she talks about the philosophy that she has about both, you know, union market as well as the mosaic. And she talks about the distance from our customer, the time they spend on the shopping center. The whole thing. I mean, she's got it down to a science. She really is incredible.

Sean Caldwell (01:31:51) - She's having her, her supper dinner this Sunday down at Union Market, where she is really design focused. The details matter. Oh, yeah. She's very good at what she does.

John Coe (01:32:05) - No question. So, there's a project, that has a little bit special to my heart that I wanted to bring up, that I heard a rumor that you guys were pursuing, but I wasn't sure if you were because I haven't read anything recently about it.

John Coe (01:32:22) - And maybe you've pulled away. There's a shopping center at the corner of 48th Street in Yuma. Yes, in Washington, D.C. was was the second property I financed when I moved to Washington, DC.

John Coe (01:32:33) - Is that right?

John Coe (01:32:34) - It was anchored by Super Fresh at the time. Yeah. And, KB theaters had their screening room in the basement of the property. And so the land is owned by the Coast Guard or the the burka family. Burka family. The burka family owns the dirt. And Melvin Lincoln built the office building next door, which is now the American University Law School. And he was involved in the shopping center as well and owning that. And I think that was kind of a when he built the, the, the office building, he had to assemble that whole site because the center had been there before he was involved. So I, my he was my borrower as a lease holder on the burka property. So it was a small deal. It was only $2 million loan. Yeah. But it was the most complex $2 million loan you can imagine.

John Coe (01:33:24) - Because it was a ground lease and.

John Coe (01:33:26) - And whatever. And Melvin was an interesting guy. I don't know if he ever had a chance to meet Mel Lincoln, but.

Sean Caldwell (01:33:32) - So did you actually work with the burka family?

John Coe (01:33:36) - Well, only to get approvals for the ground lease, because they weren't their borrower. They were gotcha. They were just the ground lessor. So but they had a it was an on subordinated ground lease. Yeah. So you know, they were you know we had to subordinate to them. Right. Our lender was a Canadian life insurance company right at the time. Anyway, that deal closed the day my oldest son was born. Is that right? Yes. And, the attorney was one of my podcast guests, Fred Klein of, DLA Piper. Yeah. And Fred's birthday was that day as well.

Sean Caldwell (01:34:15) - Fred is a true icon in this thing.

John Coe (01:34:18) - Fred has been.

John Coe (01:34:19) - Around a long time.

Sean Caldwell (01:34:21) - Yeah, yeah. So I can tell you that the berk is owned that land up until about six months ago.

Sean Caldwell (01:34:27) - Really? Yeah. So we bought it. We, we worked on. So. Yes. This is our model Ladybird community.

John Coe (01:34:34) - Ladybird.

Sean Caldwell (01:34:35) - Ladybird is our brand name. There is our brand. we actually tied that up in 2017. We got it approved through the PUD process in 2019. And we got it out of appeal about two weeks ago.

John Coe (01:34:55) - Oh my goodness.

Sean Caldwell (01:34:56) - So it was a five year arduous process of zoning approval denial approval appeal. And it was we are 100% out. We're starting construction this September.

John Coe (01:35:14) - Really? Yeah.

Sean Caldwell (01:35:15) - And we're announcing our grocer here in a couple of weeks. So super fresh. And so, we'll have to invite you out for the groundbreaking. And, we're very excited.

John Coe (01:35:24) - I mean, that house, I mean, that site, I mean, it just it was so unique, such a different, such special asset property that, in fact, I had lunch at the Wigwam, which is right around the corner from there just about last month. Yeah. And, you know, the the, what's the name of the family? The Miller family, of course, is a major investor in that whole area.

John Coe (01:35:49) - Yeah. And recently Percy is her PRP, but the the crate and barrel center that was across.

John Coe (01:35:55) - That's right.

John Coe (01:35:56) - Across. So they have that and they're building residential over there, I understand. Or or thinking about.

Sean Caldwell (01:36:01) - It from Wall Street, I guess. I guess they yeah.

John Coe (01:36:04) - Well maybe Elm community now. Yes. Elm community. Oh, goodness. Now they're called.

John Coe (01:36:08) - Yeah yeah yeah yeah.

Sean Caldwell (01:36:10) - It's a it's a special location. But yes, Prudential's our partner on that.

John Coe (01:36:16) - Oh interesting.

Sean Caldwell (01:36:17) - And yeah, it's it's it's that appeal process was something. It was very much. It was. What's really interesting about it is we had every political support you can imagine. The mayor was supportive of it.

John Coe (01:36:34) - What are you going to build there?

Sean Caldwell (01:36:36) - So we have on that community. We're looking at 200. And I mean, do we have 235 homes. and we're going to. Plus a grocer. So high density state construction again. It'll be a special community.

John Coe (01:36:57) - That's, So you're not going to do concrete there? That's interesting.

John Coe (01:37:01) - Yeah.

Sean Caldwell (01:37:02) - It's, you know, that's one of the markets where you. The economics could support it, but the zoning would never like it was, you know, stick frame construction was even. Too high for the neighborhood. Really? Yeah. So interesting. It was one of the challenges we had. It's. They. The the neighborhood. Did you know there was a lot of folks who wanted to see change there? They knew that it was just going to be a dormant, you know. Vacant. Grocery store for the next decade if we didn't do something. Yep. But then, you know, there was some you know, there's a lot of very active residents who just, you know, you know, just change his heart sometimes.

John Coe (01:37:47) - So when I was financing the property, this was 1986. I learned that that was where Nancy Reagan got her hair done.

Sean Caldwell (01:37:54) - Is that right.

John Coe (01:37:55) - In that property? Yeah.

John Coe (01:37:57) - And she was she was the first lady at the time.

Sean Caldwell (01:38:00) - I did not.

John Coe (01:38:01) - So she came out and she came out there to get her hair done. That's great. Well, I was financing the property. Yeah. I had to change the.

Sean Caldwell (01:38:09) - Ladybird.

John Coe (01:38:09) - Name, too. That's why. We have a.

Sean Caldwell (01:38:13) - First lady for the human hair going. That's pretty cool.

John Coe (01:38:16) - There you go. I thought I'd dovetail.

John Coe (01:38:18) - That in there.

John Coe (01:38:20) - so, anyway, that was,

John Coe (01:38:21) - That was fun. Are there any other projects that you want to share and talk about that are unique and something that would be worth considering?

Sean Caldwell (01:38:31) - Sure. I think, you know, we're always, always active in the market here.

Sean Caldwell (01:38:39) - you know, right now, our.

Sean Caldwell (01:38:41) - Local team is led by Joe Muffler. The next generation is really exciting. So Joe Muffler and Peter Drumheller and Chad Price are they're always got something exciting.

John Coe (01:38:51) - Chad is in my community.

Sean Caldwell (01:38:52) - Chad is. Yeah. So Chad was the one who coached me going into this. So he told me what what what his community wanted to hear.

John Coe (01:39:01) - Okay, good.

Sean Caldwell (01:39:02) - Awesome. So, Yeah. So we have a community in Old Town Alexandria. where? Just on the on the north side of Old Town, where the Samuel Madden, housing project is existing. And we're actually partnering with, a local affordable housing developer. Interesting. And we're so faire stead we're, you know, our, you know, our house or our has the local, developer owner of the existing.

John Coe (01:39:32) - You know, the head of that group was honored the other night at Uli. Yeah.

Sean Caldwell (01:39:37) - They're wonderful. So we're partnering with Ara, we're partnering with First Ed, and they're going to build a light tech building. And we're going to build a market rate building with really deep affordability.

John Coe (01:39:49) - Did Brett Myron Grove structured that deal for us?

Sean Caldwell (01:39:52) - Did Brett did. Yeah.

John Coe (01:39:53) - He's no longer there now. Yes. It's own company.

Sean Caldwell (01:39:56) - He's spun off on his own and he's going to do fantastic right. Specials. So he he brought us in I think very highly of Brett. you know they'll be breaking ground on the tech building later this year.

Sean Caldwell (01:40:07) - We'll be breaking ground probably a year from today. Plus or minus. but it's the first one, I think, in Northern Virginia where, you know, it's truly mixed income. You know, our, our army's, some of the units that are as low as 30%.

John Coe (01:40:21) - So you're west of Washington Street, then you got it correct? Yeah. You're towards the Braddock Street Metro in that direction. Okay. Yep, yep.

Sean Caldwell (01:40:29) - so that's an exciting project and it's exciting community. And I guess I'm gonna have to think about DC real estate is, you know, we'll talk about DC, but. You know, the local team. I think that the second best market in the DMV is Richmond right now, right? It's it's, you got. Northern Virginia has always been exciting. Richmond is much more of a primary market and. So the team is trying to, you know, find opportunities down there now too which is different.

John Coe (01:41:00) - Yeah. Well it's this market continues to expand you know in every way right.

John Coe (01:41:07) - Yeah I mean you go north into Frederick. It's almost up to up to Pennsylvania. Stuff going on in West Virginia. That's right, that's right. I don't know if you're going those directions or not.

Sean Caldwell (01:41:18) - Not that far out. Yeah, but maybe one day.

John Coe (01:41:22) - Yeah. The data center growth too, in this market has been spectacular. It's been amazing. It's been really.

Sean Caldwell (01:41:27) - Remarkable to grow. My mom lives out in Ashburn. You go out there. That's just crazy. Yeah.

John Coe (01:41:32) - So just earlier today in a fundraising discussion, I was talking with Bob Kettler.

John Coe (01:41:36) - Oh, okay.

John Coe (01:41:37) - And he's now getting into the data center business, which is really interesting. Yeah. Yeah, because he has a lot of land development experience, as you may remember.

John Coe (01:41:47) - So.

John Coe (01:41:49) - the multifamily business is evolving due to several factors, including work from home, amenity wars, the capital markets, affordable housing crisis, among others. Describe some of the innovations that you believe have the greatest impact on both developing and operating properties.

John Coe (01:42:07) - What is happening today that has been the most impact on current business in your mind?

Sean Caldwell (01:42:13) - Yeah, so that's a great question I think. So I think let me let me describe it like this. Where are we on the technology spectrum? We're the second mover, right? When you think about technology and how much we push the envelope. And I was I was with one of our public REIT competitors. And they share that they that they invest $25 million per year on AI and sort of AI adjacent. Right. And that's both human capital that are their own designers and investment and prop co and, and all that. And they and that's good for them. That's not us. So there's there are leaders in the multifamily industry and generally more on I think more in the public REIT space that you were describing that are really on the forefront edge of technology evolution. So we're really right behind them. Right. We're probably ahead of most of our private competitors. but we're not right on the forefront. So as an example, you know this public is doing that.

Sean Caldwell (01:43:26) - And all of their in the past year 95% of their residents do not talk to a person. New residents that are signing this will be at that same ratio of about 95 to 96% residents. Being introduced to a mill Creek community. Who's the boss name is Millie.

John Coe (01:43:51) - They'll meet. They'll meet.

Sean Caldwell (01:43:53) - Millie. probably 95% of our residents would meet them. And that'll just be a few months from now. So we're rolling out that sort of technology a little bit slower than maybe the reads do, but generally ahead of it.

John Coe (01:44:05) - So let's say I've got a backed up toilet in my unit.

John Coe (01:44:09) - Yeah.

John Coe (01:44:09) - So I get on the internet and type up Millie. Right, a chat bot and say I got it backed up. Toilet. My unit number is X. So within a certain period of time there will be a response to that.

Sean Caldwell (01:44:20) - But there is by human being. Yeah. So we have so I mean Millie can't fix your toilet yet which would be wonderful. We can if I can figure that out we're gonna really have some yield.

John Coe (01:44:32) - We'll have robots come up and a fleet of robots coming.

John Coe (01:44:35) - Right. So right.

Sean Caldwell (01:44:37) - Now, Millie's focus. It's very funny to refer to her as a person. So Millie's focused is really when you. The better example is when you call for a new home. Millie will be the person you chat with and engage in. Very friendly. And Millie will absolutely reach out to you and set you up and set you up for a tour and answer all your questions. Very interactive, very customer focused, very thoughtful program. Millie will also call you and remind you that you may be a little delinquent on your rent in a very kind way. so Millie is very customer focused and will ultimately be involved in the operational side of the business about your, you know, your clogged toilet or whatever it is, not quite there. but it is an AI technology, right? So we're very we're so we're, we're, we're pushing the envelope there, just frankly drafting off where other people have invested in Proptech. so we've got a solid you know, I think we're doing well there.

Sean Caldwell (01:45:43) - I think more for us where I think this is interesting to go is more macro issues. Right. Middle Creek, the way I described the Mill Creek product is you know we're the Lexus and BMW of the rental market right. we're a luxury. That's the moderate brand. the what we've also now gotten into is the Amalfi brand. We're also single family, you know, single family for rent, build for rent. We're out building townhomes, cottages and duplexes further in the suburbs. so we've now embraced that.

John Coe (01:46:30) - How did you get into that business?

Sean Caldwell (01:46:32) - So that was really quite a few of our if you just look at the world, there's a big movement due to the lack of affordability. Right, right. So a large population that doesn't really want to live in the city, doesn't want to live in a five storey multifamily park underground. Right. But they can't afford to buy a home. In the suburbs. That's a huge portion of the population. Right. So we're really delivering new luxury, living at a very affordable price in a good school district.

Sean Caldwell (01:47:15) - Very important distinction. you know, that feels like single family living, right? A duplex, you feel like you're living in a single family home? it's a very different model, but we're we're going to be a big player in that space. So you know and that's I think that's a byproduct. That's a bigger byproduct. But you know the pandemic really supported that. As you work from home.

John Coe (01:47:44) - Where can you do that economically around the DC area. Because the land values here are so high. Yeah.

Sean Caldwell (01:47:50) - So we're not. Yeah. So this is more of a national comment. So we're in the Sunbelt. So we're we're Carolina through Texas and Phoenix.

John Coe (01:47:59) - That makes sense.

Sean Caldwell (01:47:59) - So that is a good model there. you really couldn't do it right now in the suburbs that we operate in because frankly, the homebuilders would come in and pay. Yeah, 300 grand for, you know, 300 grand per lot for land and sell townhomes for a million bucks. But we're not going to compete against that.

Sean Caldwell (01:48:23) - But I can tell you in Carolinas part of my footprint, we're very active in Charlotte, will be very active in Raleigh down there. And there's a great opportunity for that. So. That coupled with Mill Creek is going to be. We have rolled out a new attainable housing brand called Beckett, which is, I like to think of it as, you know, entry level luxury. But it's multifamily, right? It's, you know, three story living. going back to our roots of just simple product gardens. Gardens. Just and. What's interesting for the listeners is it's very hard. It's very easy. I shouldn't say it's easy when you go from garden to high density. There's a growth curve there, and it's very hard to go from high density back to garden. It's very hard to go from a Lexus or BMW back to a Toyota. It takes it really is a mindset.

John Coe (01:49:24) - So where would you build those in Serbia or what.

Sean Caldwell (01:49:29) - So I'd like to think it's suburbia. I think that right now where we started in Houston Texas and that's that's working fantastically.

Sean Caldwell (01:49:38) - but I honestly think that there is a spot for attainable housing in most of these markets. I think that it's going to be hard to do it in the DC area, but we just have to explore it.

John Coe (01:49:51) - Charles County.

Sean Caldwell (01:49:52) - Charles County. I mean Charles County would be a great market for that.

John Coe (01:49:57) - even parts of Anne Arundel.

Sean Caldwell (01:49:58) - Anne Arundel, Prince William County. Yeah, right. I mean, these are areas where, you know, a new home with great good amenities.

John Coe (01:50:11) - would be even if you want to go as far south as Culpeper County, possibly so.

Sean Caldwell (01:50:15) - Possibly so, you know Stafford.

John Coe (01:50:17) - Yeah.

Sean Caldwell (01:50:18) - So those are the sort of markets that we have not been operating in. And over the next ten years, I hope we do. Yep.

John Coe (01:50:29) - So in that answers somewhat of my question about the future of the DC real estate market in a way. But I also want to ask, Will Amazon's HQ2 and other tech company expansions in the region over time have impact? Has the pandemic's impact created secular changes and why?

Sean Caldwell (01:50:47) - Yeah, that's a great question.

Sean Caldwell (01:50:49) - And I think and I know that you feel similarly, but you have to step back and say the DMV are really, really distinct markets. If there is one thing that we've learned from the pandemic, it's that. Public policy matters, right? And I actually like to think about this as it relates to the there's actually a competition. I'd like to see it as a public policy competition that exists between D.C., Maryland and Virginia. And the scorecard. And I don't blame the politicians, but to a certain degree the politicians are voted in to have a scorecard being surfaces and the real scorecard is jobs. And do there. If your policies can really yield jobs, then they can yield services. And as we all know, I think that the fair assessment is that. Northern Virginia has done very well in that regard. The district has tried.

Sean Caldwell (01:52:08) - In trying a very big challenge ahead of.

Sean Caldwell (01:52:12) - Maryland has really struggled.

John Coe (01:52:14) - And well, I'll take a historic perspective to this. And when I talk historic, I'm talking maybe back to the origins of each state.

John Coe (01:52:25) - Yeah, yeah. Virginia was founded by businessmen in 1607. They came here for that purpose.

Sean Caldwell (01:52:35) - That's a great point. Yeah.

John Coe (01:52:37) - Yeah. They were tobacco farmers. They wanted they the whole idea was oriented that way. Maryland was Catholic, was founded by Lord Baltimore and the Carroll family. The whole so they came was very religious from that standpoint. The District of Columbia was formed to for the federal government in John Adams administration. I'd have two named after our first president, of course, and who had actually done the the CNO Canal. He, you know, surveyed himself along the Potomac River, where he grew up down in Mount Vernon. So and the city was a swamp when it was first built. You know why they decided that site? I don't I still haven't figured out that to this day. But anyway, the orientation of the history of each of those jurisdictions leads to what I. I moved here in 1985. I saw the conflict and the total different orientation politically, and it came from that, those cultures of that era.

John Coe (01:53:48) - And then if you've ever read the book James Michener's Chesapeake, which is also talks about the origins, even though it was a fictional story, but it does talk about the history of the Chesapeake Bay and and how, you know, the you had the indigenous indigenous cultures here, you know, and just how all those things evolved into today. That's fascinating. So people don't think about those things when they talk about current politics in this region. Right. But if you think about it, where the orientation came from, it makes sense is, you know, Bethesda, Maryland was formed because of the the hospital that's there. You know, the Bethesda Naval Hospital, the whole health care orientation of Montgomery County comes from that. You know, if you look at.

Sean Caldwell (01:54:36) - Really part of our DNA.

John Coe (01:54:37) - It really is. And yeah, so and there's a very social perspective in Maryland that is not the same in Virginia. So it comes a little bit more from the religious social side. And you look at Virginia as a business community, you know, the whole thing.

John Coe (01:54:56) - And even during the Civil War, you know, they fought for slavery because because that was the business of mayor of Virginia was to to the crops and the whole thing. So George Washington and Thomas Jefferson and they all had slaves. Right. And the Lee family, of course, was the origin of all of it. They they were the part of the original, you know, settlers of Virginia, you know, great respect. And Robert E Lee had to give up his land. And now Arlington National Cemetery. Yeah.

Sean Caldwell (01:55:28) - Right. It's fascinating. You know, it's I mean, that's a great perspective. I'm going to read I'm going to read that now. So that's that's awesome. But you know, when you translate all of that, it's fascinating to think about how that DNA really influences has establishes the roots for the opportunities and challenges we have today as a business that operates here. I mean, our offices in Maryland, since I've been with this group, we've built, we've developed 11,000 homes here.

John Coe (01:55:59) - Okay.

Sean Caldwell (01:56:00) - And 484 were in Maryland. Wow. So that's something, right?

John Coe (01:56:06) - It sure.

Sean Caldwell (01:56:07) - Does. And we would, you know, we we work here. We'd love to do more, but it's. Before you have less than 500, you know.

John Coe (01:56:16) - So taking it to the to the day, the attitudes and the perspective of the federal government in the overlay of the federal government and its influence is weigh heavily to the eastern side of the of the Potomac River than to the west.

John Coe (01:56:33) - Right? Yeah.

John Coe (01:56:35) - except for the Pentagon.

John Coe (01:56:37) - Yeah.

John Coe (01:56:38) - so as as we when I first moved here, you had they called it the death sciences. On the on the on.

John Coe (01:56:46) - Maryland, Virginia and the life sciences on Maryland. Right. Yeah.

John Coe (01:56:51) - and that's the Merck, you know, soft side the, the whole so and government, you know, the whole government orientation. So government is more dominant in Maryland and Virginia than in or Maryland, in D.C. than in Virginia, per se. It's more of an independent thought process in Virginia.

John Coe (01:57:11) - Yeah. So that's the cultural difference.

Sean Caldwell (01:57:15) - I do I, I would like to have us do more in Bethesda. I believe in Bethesda Market. We've tried many times. We've had to be successful, but we will I do struggle at the end of the day with the. Job growth story up the 270 corridor. between the regulation not being able to kind of get out of their own way, it's we just were more and more gravitated towards better opportunities. I don't what I do see everyone says business friendly, right? I would say this, I, I like when we work in areas that are difficult. I want it to be difficult. Right? I want to be able to create value.

John Coe (01:58:00) - Spring Valley is a case in point, right?

John Coe (01:58:02) - Spring Valley is a case.

Sean Caldwell (01:58:03) - In point that's maybe a little bit too much.

John Coe (01:58:07) - I think a little bit more than that.

Sean Caldwell (01:58:09) - But Falls Church, like we worked in, you know, I, I don't want the DC area to be Houston. Right.

Sean Caldwell (01:58:18) - But you can't be San Francisco like, right? And Marilyn just has to see it in that change. Marilyn. But it's a competition and we're going to naturally gravitate. And there's nothing easy about working in Arlington or Falls Church, but you kind of know the rules you're going to play by. You know the jobs are going to go there. It's difficult enough that the supply can stay controlled. but the it's predictable enough that the demand drivers will be there. If there's one takeaway that this pandemic has taught us. And I've heard you say this, which is the biggest challenge in the multifamily has is just supply challenges that are happening throughout the nation. But we also have some demand challenges. You know, we had an investment in Oakland, California that was in a supply issue. That was a demand issue. So we've learned the difference between and I'll take a supply challenge over demand challenge. Look at all of this.

John Coe (01:59:21) - The pandemic just crushed it. That's right.

John Coe (01:59:24) - So. Yeah. It's. Yeah.

John Coe (01:59:30) - so I get it. And, you know, it seems like the, you know, the center of gravity is moving across the Potomac and into Virginia and, you know, the recent Caps Wizards situation, right? you know, Virginia said we're not going to pay for it. That's right. you know, you know, the downstate folks said, no, why should we subsidize, you know, Ted Leonsis to, you know, build a stadium there. And so, and I somewhat agree with that decision that. You know why they did that? So I'm switching to another point. hotel ization. Yeah. Which is kind of the trend that I've seen. And it's it's not just in the residential sector, but it's also the office sector too, with Oliver Carr does that in his buildings and just this whole hospitality orientation. And it's it's an attitude thing. So, I toured, Chevy Chase Lake, which is a Rose Trophy project in Chevy Chase, and they've got a Ritz-Carlton residence there. Right.

John Coe (02:00:38) - And it's it's for sale for condominiums. But I sat with the, you know, with the folks, and I asked him and they all said, we learned a lot with that. Yeah. About the whole orientation. I mean, the Ritz-Carlton playbook is pretty impressive, apparently for for that.

Sean Caldwell (02:00:59) - So that's a special investment. I I'm going to. Mill Creek is not played in that. I think there's value there. So in case Bill McDonald's. Listen, I'm not going to embrace her. I've done enough in age restricted, mixed use. I don't need to go there. But I think that like the why hotel folks. Right? Right, right. He's they're fantastic. And I we would I would personally look at something like that if we had a really big community like. the place maker guys are smart or you know, 400, 500 unit community in an exceptional location where the hotel rates are really high and you want to have a slower lease up. It's a pretty smart concept for a multifamily person.

Sean Caldwell (02:01:48) - You got to be really focused on your brand. Introducing hotel in the same process. But the bottom line is we haven't done it, but we've studied it. But I can see that happening in the future.

John Coe (02:02:02) - Well, I you know, I toured Reston Station recently with Chris Clemente. Yeah. And he's doing an interesting structure. I don't know if you're familiar with what he's doing there. He's got a JW Marriott hotel, and then condominiums on top.

Sean Caldwell (02:02:19) - Oh, wow. Okay. Wow. Okay. Yeah. That sounds that sounds brand.

John Coe (02:02:24) - Branded condominiums on top of.

Sean Caldwell (02:02:26) - That building.

John Coe (02:02:27) - Yeah, it's under construction now. They have four cranes there. At last, I was there with office, residential, you know, hotel.

John Coe (02:02:36) - All time in two.

Sean Caldwell (02:02:38) - Days.

John Coe (02:02:38) - World well in office state. They're leasing up like that.

Sean Caldwell (02:02:41) - That's amazing.

John Coe (02:02:42) - Yeah. And it's because the, you know the the tech corridor there, you know their their anchors Google. Yeah. So that's a pretty good start.

Sean Caldwell (02:02:50) - That's impressive.

John Coe (02:02:52) - Yeah. so you know people say office is dead. Well it's not necessarily that.

Sean Caldwell (02:03:00) - Quality office is not. Yeah.

John Coe (02:03:03) - Yeah. so let's see when you, when you interview people, what characteristics do you look for the young professionals. Oh, that's a great question.

Sean Caldwell (02:03:14) - and I think at our core, this is what this is one of the things that makes us special. It's just the. Who you hire and how you hire is the most important decision you make. And we have a very structured process and very specific things that we look for. And obviously it has a lot to do with the core values that we talked about. there was a tenor that I heard which was, you know, higher, slow and fire fast. Fortunately, we don't have to fire fast because we do hot or slow. and personally, what I really, really look for. We've taught this a big cornerstone of the. Over the years, the education we've had through the Bell Institute in Chapel Hill, North Carolina.

Sean Caldwell (02:04:05) - Doctor Bell has guided us on so many levels of personal growth. What great leadership means.

John Coe (02:04:15) - Is he on your board?

Sean Caldwell (02:04:16) - He is not on the board. but I get to see him in two weeks. But he is a constant advisor, and he is part of succession planning. And he is. We are sending key associates and every partner down for personal assessments to understand who they are as a person and a leader, and understanding your strengths and weaknesses. And he has taught me to hire in a manner that has allowed me to really, you know, just bring the right people, which is a look for three qualities, which is, technical skills, personality. And the quick summary of this for the listeners is the least important is technical skills. And I mean that that if you get the right person at anything.

John Coe (02:05:01) - You can teach them. That's right.

Sean Caldwell (02:05:03) - And then and and no one's ever been fired for not being able to do an Excel spreadsheet, right. It's really about personality and commitment and the concept there that we.

Sean Caldwell (02:05:17) - Is commitment is non-negotiable. It's 100%. If you're not 100% committed. Anyone on the interview committee can say this interview was done. And you don't do that by asking them. Are you 100% committed? You go back to their past life and you walk through their behavior as to how they have demonstrated commitment since they were a young child. What how old were you when you had your first job? When someone first gave you a nickel for doing a job? What did you like about that? Walking through. To understand what commitment means. That's cool. It's cool. Right? That's cool. Everything you learn from the first time someone gave you a dollar affected you today. I like that.

John Coe (02:06:01) - So let me let me let me jump in. Yeah, please. Because there's somebody that works for you. And I'm going to ask if did you hire Chad Price? Yes. Okay. Tell me what characteristics.

Sean Caldwell (02:06:13) - Joe muffler, Peter Braun. All right, so we.

John Coe (02:06:17) - Talk about Chad.

John Coe (02:06:18) - Yeah, if you don't mind.

John Coe (02:06:19) - Wonderful.

Sean Caldwell (02:06:19) - So it's, you know, Chad's very great guy, right? So he quickly met the technical skills very quickly. Then it was commitment. So commitment we went through, you know, Chad's life from beginning to end. And what was it that, you know, did we think that he was passionate? Do you think he loved what he was going to do? And was he driven? And the answer was yes, yes and yes.

John Coe (02:06:55) - How did you determine that?

Sean Caldwell (02:06:57) - So going through the questions on the commitment of what did you do when you were, what was the first job you had? So the questions go like, this was the first job you had okay. How old were you? what did you like about it? What did you not like about it? what did you like about your boss? What did you not like about your boss?

John Coe (02:07:14) - Why did you leave? Is there something about Chad that stood out to you?

Sean Caldwell (02:07:20) - dynamic? he was obviously incredibly hardworking. He was. I think he was a good student who pushed himself to be a great student.

Sean Caldwell (02:07:33) - Right. He has his background is a little bit like mine. Like it wasn't. He wasn't just naturally gifted to crush school or anything like that. He actually had to see through that and get to the other side to get to Georgetown. He had to really overcome his own challenges to be the best person that he could be. And for Chad. I want to pivot, though, to the other one, which is there's commitment, which was pretty obvious. And then Chad still gets in before me. He's here, you know, he's here after me. His commitment is off the charts. Personality wise, personality is really about awareness and compatibility. And really understand. So it's not about saying we need to have a certain personality type in the organization. Rather, do you know who you are? And with Chad. You know, he just lights up a room and he knows he does, and he can do so in a very humble way. And it attracts people. Right. And so that's exciting.

Sean Caldwell (02:08:41) - If you if he did not know that that can be dangerous. And being a really nice guy who's not aware of it can be can be a liability. So his awareness was really high. Its commitment was off the chart and he was smart and we knew that we could teach him. So it was very hard.

John Coe (02:09:01) - Well, when I met him and of course in the community, I just immediately noticed his enthusiasm. Yeah, right.

Sean Caldwell (02:09:07) - Commitment, enthusiasm. Yeah.

John Coe (02:09:09) - He just had this, you know, curiosity and wanting to learn and just grow. That's awesome. And he's going to hopefully help us, to build a partnership with Project Destined. Oh, good. Which is the, you know, the minority group, you know, Cedric Bobo's group to bring on new members to our community, which is exciting. okay. let's shift to your personal philosophy, Sean, when you when you were fully engaged in multiple projects, how did you see balance among family business and giving back?

Sean Caldwell (02:09:45) - So it's really like I was I like that question a lot.

Sean Caldwell (02:09:49) - And balancing real estate is really a tricky thing. and living balanced lives is one of our, you know, core values. And I've learned over years that it takes a lot of it when you hire someone enthusiastic like Peter Broomhall. Chad Price. You don't have to kick him in the pants to get him going. But you do have to kick him in the pants to say. Don't open up your phone when you're at dinner with your wife. Don't answer emails when you're on vacation, right? You have to really force them. And I have to do that by doing it myself. I have to make sure when I'm on vacation, I don't email. I don't check in with them because when they're on vacation, I want them making those deposits with their spouse and family that they're really. And because you know the business well John, when it's on it's on. And when you have a closing or a big hearing there's nothing you can do about it. You're on. And I love the concept of deposits and withdrawals and relationships with my wife.

Sean Caldwell (02:11:10) - And when I have to do those multiple nights in a row, that's a withdrawal. The relation. Yeah it is been there.

John Coe (02:11:17) - Done that right.

Sean Caldwell (02:11:19) - So I have to acknowledge that our job has a lot of withdrawals where they may miss a soccer. And so, you know, you hear people say, well, it just don't miss the siren. Well, you're going to miss some soccer games. But let's make sure that events as those happen and the most important times and it's not a. And that we really encourage them to, to check out, really support them to take as many. It should be more of how do you encourage them to take action? So that's really the balance in life. I think as an organization, we're. Pretty darn good that we encourage people to check out, celebrating as far as giving back. I think that you're an inspiration for me. I the way that I've given back to date. So I'm at the start of that point. Early years, right? I'm really enjoying teaching, so that's great.

Sean Caldwell (02:12:27) - Yeah. Well, it's like. So I still a few times a year, I'll do a case study at American. You can start doing it at George Washington. It started doing George Mason and I go back to to come full circle on this conversation. You know, I was a mediocre student who learned a very odd way. And. Which makes me a pretty darn good teacher to go in and say, you know, teach people in a much different way and get them excited about real estate.

John Coe (02:12:58) - So that's an interesting pivot. So let's assume you're teaching yourself. Yeah. When you were 1920, in college how would you get your attention? At that point, how would you have gotten your attention.

Sean Caldwell (02:13:13) - So as a teacher. That's a great question, I think. I've never thought of that, but I think I teach in a way that would. I'm absolutely teaching to my 1918 year olds.

John Coe (02:13:27) - There you go. Right.

Sean Caldwell (02:13:28) - Which is with enthusiasm, with, good descriptions of what it's about. Understanding why.

Sean Caldwell (02:13:40) - You know, really taking it in interesting directions and then throwing numbers at the end, but really explaining the core competencies of why I'm there.

John Coe (02:13:50) - To get attention. And my experience is you gotta you gotta have a story and storytelling orientation that gets to their level right and speaks their language. Yeah.

Sean Caldwell (02:14:03) - It is a storytelling.

John Coe (02:14:04) - So you almost have to bring in something that might not be directly related. Right? But that ties in somehow. Yeah. And they say, oh, now I see.

John Coe (02:14:16) - That's right.

Sean Caldwell (02:14:18) - I think that's right. I think being Irish, the storytelling comes naturally to me. So that's yeah, I think you're right.

John Coe (02:14:23) - But I mean another subject that kind of gets there.

John Coe (02:14:28) - Yeah.

John Coe (02:14:28) - In a roundabout way. so I haven't told this to too many people yet, but I'm considering writing a book.

Sean Caldwell (02:14:35) - Good for you.

John Coe (02:14:36) - That's great. considering. And I'll just leave it at that because it's it's a it's a commitment. Yeah. You talk about commitment. It's a commitment. Right.

John Coe (02:14:44) - But I now have enough content that I think I can come up with something that's.

Sean Caldwell (02:14:48) - Certainly.

John Coe (02:14:49) - Pretty interesting. So, the question is, you know, what's the framework of what that's going to be? I don't know, but, you know, I'm trying to take it from a storytelling standpoint, and that's what I try, why I do what I'm doing with this podcast. Because every, every, every person has a story to tell. And the question is, how are they all kind of interrelated? Right. From a, you know, a typical developer story, is there such a thing? I don't know if there is, but are there common themes? Yeah, there are a few.

Sean Caldwell (02:15:25) - That's great John, I look forward to reading it.

John Coe (02:15:28) - It should be fun. so what lessons would you share, both in career planning and in business performance, to the young leaders in the listening audience?

Sean Caldwell (02:15:39) - You know, Here's two things that I would say is. Don't be afraid to take risk.

Sean Caldwell (02:15:52) - Failure is not that bad. Right. It's not that far. You'll grow more from that than anything else. And so don't be afraid to.

John Coe (02:16:00) - Take a risk. Especially young.

Sean Caldwell (02:16:02) - People. Absolutely. Never be afraid to make a well-informed mistake. Well informed is important. You know, we'll chat about that. Man. But lastly, I have a cultural thing. There, which is no company, is perfect. No leader is perfect. We as individuals are perfect. So when you're in an organization and it's really good and Millcreek is not perfect, right? I say this to myself, as Mill Creek is not a perfect organization, and the ways that they're imperfect, that I don't like, I lead the way. I want to be led, I do, I do it. You know, I just say, if you don't, if there's something you don't like in the company that you're in, just lead that way. Don't wait for someone else. Don't expect someone.

John Coe (02:16:53) - Else to do it, as long as you're not completely contradictory to what the culture is of the firm.

Sean Caldwell (02:16:58) - Right? That's right. It's not. It's not about taking it in a different business direction. It's normally it's normally those values we're talking about, which is, oh, my company doesn't celebrate success enough. Then do it yourself. There you go. Start it like do it yourself and people will follow you. And I think it's people wait for it to happen.

John Coe (02:17:18) - Father was just one of my core values of this community that I started is going first.

Sean Caldwell (02:17:24) - Going first.

John Coe (02:17:25) - Going first.

John Coe (02:17:26) - Right. That's right.

John Coe (02:17:28) - And that's taking initiative. You know, use your gut to figure out what the right thing is to do.

John Coe (02:17:35) - That's right.

John Coe (02:17:36) - And do it.

Sean Caldwell (02:17:38) - Exactly your gut. This is a great. You like this your your gut opinion is your subconscious telling you something that your conscious is not ready to hear? Right. Exactly. Yeah.

John Coe (02:17:50) - That's excellent. That's excellent. How do you see the advantages disadvantages to acquisitions versus development and to long term holding and merchant building. Do market cycles have the most impact on those decisions.

John Coe (02:18:04) - So yeah I think.

Sean Caldwell (02:18:05) - We've covered that. I think it's you know yeah I think we've you know we're we're a we're all the above. We're doing acquisitions. I think if you're a small shop, you kind of figure out exactly what you do in our platform. I see we're fortunate that we have a well rounded platform. Yep. So yeah.

John Coe (02:18:25) - Tell us about some of your biggest wins and failures, along with some of the most surprising events in your career.

Sean Caldwell (02:18:33) - You know, I go back to one of the biggest challenges I had as a young developer was just a deal that went sideways, and we got over our skis on the sort.

Sean Caldwell (02:18:43) - Of product that we were building and, and. You know.

Sean Caldwell (02:18:49) - So it was such a god awful process. The project went really literally sideways on me, and Bill and Chip just stuck by me and.

Sean Caldwell (02:19:00) - I should have fired. And they stuck by me and I just.

Sean Caldwell (02:19:04) - So the biggest things I learned. Around a failure was sure about great. You know, it's really about communication.

Sean Caldwell (02:19:13) - At the end of the day that when I think about that project and you think about drawings and you think about all these things and just everything that went poorly that I could have redone had everything to do with communication.

John Coe (02:19:26) - Did it get built? Yeah, it did get built, got.

Sean Caldwell (02:19:28) - Built, made a lot of money to be interesting. But, you know, I never want to go through that process again. So, so many of these things that you challenge. We challenge it, whether it's a project or a team or a culture. It all comes back to.

Sean Caldwell (02:19:50) - Being a good leader.

Sean Caldwell (02:19:52) - Having great communication skills and ultimately, like the court, all that's just being a good listener, you know? And that's, So at the end of the day, every success and every failure revolves sort around whether I was I was in a good leadership place.

Sean Caldwell (02:20:11) - And good communication. Isn't it great?

John Coe (02:20:16) - So if you're a 25 year old self were sitting here, what would you tell him?

Sean Caldwell (02:20:20) - You know, it's what you said just a second ago, off of which is take more risk getting bigger.

Sean Caldwell (02:20:25) - Right.

John Coe (02:20:26) - And, were you apprehensive originally? At that time, I was.

Sean Caldwell (02:20:30) - So am I. It's a great question. You know, growing up in a, working class family, right. Stay humble. Work hard. Right. you're a good number two. But you don't need to be a number one. And I sort of whether it was Darden or working for Bill and ship and all that, it's like now you, you know.

John Coe (02:20:53) - You can be did you have imposter syndrome at one point.

John Coe (02:20:57) - I think I did I.

Sean Caldwell (02:20:58) - Think I probably do. I think you're probably touching on something and I think I probably did.

John Coe (02:21:03) - that's.

Sean Caldwell (02:21:03) - A great you know.

John Coe (02:21:04) - You.

Sean Caldwell (02:21:05) - When you get to the other side of that, you're, you're it's a pretty powerful experience to know that and get to see it.

John Coe (02:21:12) - Yeah. So if you could put a billboard on the Capitol Beltway with a message for millions to see, what would it say?

Sean Caldwell (02:21:20) - So I've had some fun with this one. And I realized, John, that there's an inner loop and an outer loop.

Sean Caldwell (02:21:30) - So I have two signs for it.

John Coe (02:21:32) - I love it, that's great.

Sean Caldwell (02:21:35) - And they're both communication signs. because ultimately I think that's the foundation of great leadership and great business models. And on the outer loop, the outer expression of communication. I quote a good friend of mine who, Clarence Williams, who's a writer with the Washington Post. And he reached out to the editor in chief of the Washington Post and said, how does my reporting get on A1. And the editor in chief responded with, you want to write better, ask better questions. Profound. And so my so to the young listeners. Be curious. Ask the.

John Coe (02:22:22) - Questions. That's great.

Sean Caldwell (02:22:25) - And the inner loop is a little bit more internal, which is very simple and shared around. Which is listen well for what's not being said. So at the end of the day we can be curious, ask better questions and listen to what's not being said. We'll, we'll create amazing communities and great organizations.

John Coe (02:22:49) - Nonverbal communication. Yeah it's interesting.

John Coe (02:22:53) - That's great. Well, Sean Caldwell, thank you very much for a very insightful.

John Coe (02:22:57) - Conversation, I appreciate it. I loved it. Thank you so much. I appreciate.

John Coe (02:23:02) - It. Take care.