The Opportunity Zone Expo Podcast

David Waxman - Historic Redevelopment of His Hometown Makes Philly a Better Place to Live

August 15, 2019 David Waxman Season 2 Episode 21
The Opportunity Zone Expo Podcast
David Waxman - Historic Redevelopment of His Hometown Makes Philly a Better Place to Live
Show Notes Transcript

Philly native David Waxman has been doing historic redevelopment projects in the Philadelphia neighborhood called Brewerytown since 2001. The reality is that he was an OZ developer long before the OZ program ever existed.

He's an investor, developer, entrepreneur, and exactly the kind of visionary who makes life better for everyone who gets involved with him. David Waxman of MMPartners is my guest on this episode of The OZExpo Podcast.

Host: Jack Heald
Guest: David Waxman

Jack Heald:

Welcome back everyone. This is the OZExpo Podcast. I'm your host Jack Heald and I am joined today by David Waxman, who is the managing partner at MMPartners out of Philadelphia. David, welcome to the OZExpo Podcast.

David Waxman:

Jack , great to be here. Really honored to participate. I have been a fan t o show for a while and u h, great work you're doing t o sort of shine light on the Opportunity Zone. It's good to be here.

Jack:

I appreciate that. I mean I'm , I'm, I am a genuine , um, fan. I'm genuinely excited about the Opportunity Zone program and anything I can do to , to , to make it a success. I am thrilled to be able to do. So, tell us a little bit about MMPartners. U h, you're in Philly, but of course there's more to it than that. Give us the background on what M LM partners does and u h, o h, why I'm talking to you today. I know why, but we're going to tell our listeners why.

David:

Sure. So, and MMPartners officially started in 2008 in the , in Philadelphia, but really the beginning of it was in 2001. Um, I was a young guy then and looking to develop my own projects and identified a neighborhood in Philadelphia called Brewery Town, living in New York City at the time, working for another developer. And I was ready to start doing my own stuff. And the genisi of MMPartners was basically we're going to redevelop the Brewery Town neighborhood in Philadelphia, which is on the outskirts of the CBD in the wave in the path of development. Very well located historical neighborhood. And we started the company to effectuate positive development in this neighborhood, residential, commercial, retail developments. Uh , since that time we've expanded into other neighborhoods in Philadelphia with the same sort of idea of doing quality development targeting sort of the middle of the market. Um, many people call it the missing middle where it's, you know , nice housing and regional opportunities that aren't super high end and aren't at the low end .

Jack:

Right.

David:

We've done almost $200 million of projects well over a million square feet. And our business today is really two fold. One is , um , large steel adaptive reuse projects, is one side of our business. The other is acquiring a apartment, buildings that sort of had deferred maintenance, longterm ownership. I've been invested in. Then we'll go in through kid kitchens, bathrooms, halways common areas, et cetera. Um, and I think what's also interesting is, you know, going back to 2001 we've been developing in what are now Opportunity Zones for well over 20 years. So when we saw the legislation passed, we said, hey, we know, we know how to do this. Now there's this new tax benefit which we felt would be a magnet for capital to come into these areas that really have just suffered from this investment and under investment for a very long time. So happy to talk more about it.

Jack:

Very good. Um, I was reading a little bit about Brewery Town where you started your , your development or redevelopment. Uh, I think it's bloody interesting. Give us a real quick overview of, of what Brewery Town is and then I'm interested in why you picked that as your starting point.

David:

First off, it's the real name of the neighborhood mean make it up. It's not like a marketing thing where you see, you don't really just going into neighborhoods and creating new names for them, this has always been Brewery Town. The area sits in the northwest corner of the city. It was a , it's probably in the latter part of the 1800s. There were more breweries there than anywhere in the United States. It's German immigrants that came here, built up the neighborhood, built up the breweries. Um , the last brewery here closed in 2001 it was a brewery called Red Bell. Oh , they went bankrupt. Interestingly enough, we're now redeveloping their former , um, brewery the Red Bell Brewery or [inaudible] brewery , which is what it originally was. What's interesting about the neighborhood as it sits on next to Fairmount park, which is the largest , um , park system in the U.S. or I believe in the world. So that's sort of your backyard.

:

Wow. In the path of development in terms of, it has a very solid neighborhood just south of it. And you know, again, like many urban neighborhoods in the 60s, 70s, 80s, and 90s, there just wasn't investment. You had red lining going on. You had an anti-urban sentiment and people were living in the suburbs. And what was really interesting about Brewery Town, it was an intact neighborhood in terms of you had a lot of the original architecture still intact. You had very high rates of home ownership and low incomes , meaning senior citizens who hung on and sort of help stabilize the neighborhood as much as they possibly could. Um, you had our little retail corridor that ran through the neighborhood. Obviously the ability to walk out of your house or apartment and go grab a sandwich or a coffee or the things you need on a retail quarter are what make a neighborhood great.

David:

So I saw all the pieces there and felt that maybe it was naive at the time I was 24 years old. I was like, Hey, if I can sort of get enough property here in this neighborhood, I can really help drive change at the same time, make sure that the change also benefited the people who lived here, not just the new people coming in and fast forward, we think we've achieved that. Um, and we're pretty much working on our last project here in the neighborhood now , uh , 19 years later. But , um , it's been really quite an interesting thing to see the neighborhood change over time. And originally there was only a very small number of guys up there doing development and now it's just, it's almost too much, if you can believe me saying that. It's just crazy amount of development going on in the neighborhood.

Jack:

Why were you in, I mean, you're , you've , you've listed the, the fundamentals of the neighborhood, but how is it that you knew about Brewery Town? Why was, why were you in particular attracted to Brewery Town, other, I mean, you tell me the fundamentals, but anybody who saw the fundamentals would be excited. How, how was it that you knew about Brewery Town?

David:

Yes. So I am , I grew up in center city, Philadelphia. Um , which today isn't that abnormal for a person to grew up in the city. But when I did, it was a pretty small number of us whose parents stayed in the city when they had kids sort of toughed it out in quotes. So , um, and my school that I went to was probably about eight or nine minutes from Brewery Town in our playing fields where we played sports. We're in Fairmont Park, so we would drive past Brewery Town all the time. Fast forward, I'm in college, I started urban studies and public policy, Boston University. Um , and I knew I wanted to do development right . Hence why I took that degree path. Um, and I wanted to do development on the edges in neighborhood redevelopment. So when I started looking around in 2001 I knew I couldn't do it in New York where I was living at the time. It just wasn't a viable option. Property was crazy expensive. People in New York will buy rent controlled buildings to lose money for 10 years in the hopes that they can turn the units. And I just, I knew it wasn't a place that I could be competitive with the finite amount of capital I had saved up, go do my own projects. I need to start looking into Philadelphia and maybe I need to move back there. And so I'd come home on weekends and sort of just scout around neighborhoods that I knew just from having grown up here. So that was very powerful . There's a neighborhood called Graduate Hospital, there's a neighborhood called Northern liberties and these were servants of places at that point that I was looking at. Wow . I felt that Brewery Town, aside from the fundamentals I mentioned was also mispriced by that I mean lots and vacant shells where maybe half the price that they were in other up and coming neighborhoods and I felt the end values, we're within 10% of the other neighborhoods. So I thought that there was one with this arbitrage where I had more cushion to go and do projects as my first project. I knew I was starting to get my ass handed to me. Um , learning as I went. I mean it was sort of, we call it tuition basically. So I wanted to go to a place where I had had an edge and, sort of like that. No one was there. So I had the opportunity to go in and, and kind of drive the change and hopefully set the tone for what development would look like in the neighborhood.

Jack:

Did you have any idea 19 years ago that it would be that long- term a project?

David:

So it's funny you say that one of the, you know, the , if I'll do like a interview or some way that one of the things like what are you like do you have, for someone trying to do this? Like everything takes longer and costs more. At the time. No Way. I think, you know , I tend to be a , uh, with some things, very patient as it relates to, you know, making bets and investments , um, and you know, sort of going to wait for it to pay off. I'm also very lucky to some degree that I don't, didn't end up like a lot of pioneers, you know, as they say, they sat with arrows in their backs . I was able to, benefit from what we're doing here. U m, and y ou k now, we're able to do some pretty large projects that, u h, really enabled us to take advantage of all the hard work. You know, a lot of the stuff we did, we took years and years to gestate and make money on a lot of the retail tenants that we put in literally would pay no rent, that they were good retail tenants that would set the stage for future retail tenants. Um , you know, sort of lost leaders. Um, so I certainly didn't think at the time it would take as long as , you know, now going in and we look at new opportunities, you know, we have sort of eyes wide open. If we were going to go do this again, we'd know it would take twice as long as we thought or at least would underwrited as such and be pleasantly surprised if it works out differently.

Jack:

This , uh, the, the loss leader concept, I want to just touch on that very briefly. Is that something that you just had to figure out on your own or did you run into that as you were, as you were learning the business from other people?

David:

So I think, you know, the really, the godfather of neighborhood redevelopment was Tony Goldman, Goldman properties, you know, who did Soho South Beach get a pretty big presence here in Philadelphia as well. And you know, if you look at the stuff he did, he'd put in pop up art galleries or he would, you know , basically do complete sit out for restaurant, which he thought could drive business and give them really sweetheart deals. And so we sort of look to that and saw the blueprint. Um , interestingly enough, starting the company in 2008 in the down economy, which was deliberate, you also have to be very mindful of how you spend money. So, you know , we had this sort of bootstrap this, you know, the way a startup bootstraps itself, we have to be very creative with financing. Um, and it was a , it was a long game. You know, we had to convince commercial tenants that our plan was going to work because the chicken or the egg to get the residential people to move in , you needed the retail. So we had the saying retail drags, residential retail drives residential. Let me just sort of just kept add it, chipping away at it . It was, it was very difficult. And I would say within the last 24 months literally is when the retails really started to sort of come into its own there , states opening , it'll be have nothing to do with like a bank branch open . And we had nothing to do with it . Amazing. It could be able to see a great tenant like that come to, I mean retail quarter here and someone else did it well and we didn't have to be involved. We thought that was, you know, a really important milestone .

Jack:

You know, I've often thought , um , that there must be just an extraordinary sense of personal accomplishment from conceiving and then executing a really large project like this. And , and , and I don't mean a big shopping mall. I mean literally changing the trajectory of the neighborhood from, from negative to positive. Was that something that was driving you at the beginning or, or was it more just unlike the work, this is something I want to do. Did you, did you have a sense of genuinely making a difference in the world?

David:

Yeah, I think, you know, I , um , I attended Quaker school from kindergarten to 12th grade and if you know anything about Quakerism , I'm not a Quaker by religion, but you know, 13 years of it sort of, you know, being gets pounded into your head, it's something comes through in a big part of it is like you can , you know , you can do well and do good at the same time. So, you know, they were, they really drilled that into your head. So I knew that there was a way to do development and do it in a responsible way and frankly not be an asshole. Pardon my French. You know , developers have a bad rap to some degree deserved because there was a lot of bad actors come to this space because there's so much money involved. Right. But there's also a handful of good ones as well. And so for me it was important that we do it the right way. And you know, from day one we're giving back to the community into every possible way. We knew if we're going to make money here, we need to do things to give back to the neighborhood. And that was always an important part of what we did. From day one. We put an office here, day one, they were like, we can't be guys that are perceived as coming in from the outside , um , making money and leaving. And so, you know, it was important that we had a presence here day in and day out. People knew who we were, they knew they could come talk to us, we made the right relationships with local stakeholders and you know, we're respectful of the people that were here. We didn't discover this neighborhood. It was here, you know, simple little things like, hey, it's nice to say hello to people on the street, you know, especially the ones you see day in and day out. And so, you know, just little tiny things like that. And just being respectful and treating everyone the same way. And at the end of the day, everyone puts their pants on the same way in the morning. Right. And so a lot of folks sort of lose track of how simple that is. But, you know , just between respectful and , and nice , will get you far.

Jack:

Absolutely. Um, I, what I really want to talk about here is , um, Dale Carnegie, how to win friends and influence people. And then I want to talk about Jonathan Heist , the righteous mind and how we respond intuitively far faster than we respond rationally. But none of that has anything to do with the Opportunity Zone. So I'm going to leave that aside.

David:

We could go at that for hours. But fair enough.

:

Yeah, I think we could. I want to , I do want to ask you one more question about Brewery Town in particular. Do you have eight, like a flagship project that you point to in Brewery Town that you folks in the neighborhood could wander by and go, oh yeah, that's a Dave Waxman.

David:

Yeah, I think , um , ritually two projects that were across the street from each other. One is the Pyramid Lofts . It's this very interesting trianglear warehouse building, but six stories tall that we completed the two years ago, into lofts and commercial space. And then across the street is the Red Bell [inaudible] hop brewery that I mentioned earlier that we are under construction on. And that's just this amazing 1800 steel and concrete brewery. It's a square block and it's really the last sort white elephant in the neighborhood that's been blighted and you know, five or six developers over the years have tried to develop and failed. And you know , it's rewarding to meet the guys that are figuring that figured out how to do it. It's an Opportunity Zone deal. It's an historic tax credit deal with both federal and state credits. Um , and you know, when the , when this has done this, this, these two buildings across from the street, from each other, really interesting historic warehouses, Woodward , it's just going to be amazing to see. And one , one of the most gratifying things is that before, after images, before , after images of these two buildings combined, when they're both done, it's just going to be insane. So I think that for us , uh , is what we're most most excited about.

Jack:

Okay. Um , I love this idea of a triangular building. I just, I get such a kick out of these odd things. I grew up in a town that had their, with Frank Lloyd Wright had built a, had designed and uh , okay . A building in my hometown and the driving idea behind the building aside from it being Frank Lloyd Wright was that it would have no right angles in it. It is just the weirdest, bizarre building, obviously very , extremely iconic. Um , I think that drove my interest.

David:

The price tower?

Jack:

The price tower. That's exactly right.

David:

Yeah, absolutely.

Speaker 3:

Yeah. Um, so let's, let's go deeper now into the subject at hand, the opportunities that we've been developing in neighborhoods in Philly for 20 years , uh, January 1st, 2018. All of a sudden you've discovered that you are in, you are already developing in Opportunity Zones. Talk about, tell me a little bit about what your mindset was when you wake up. I know probably not on January 1st but you wake up one day and you realize, oh my Lord, this , uh , this gift has been handed to us. What was going on in your head at that point?

David:

Yeah, I mean, I think, you know , we had heard rumblings of the legislation had been tracking it and when it finally passed , we were like, wow, this , this is really a game changer for our business. Because our business, it's always been about going into neighborhoods that other folks or you're scared to go into or don't understand. And the ability to go in and create really strong risk adjusted returns for ourselves and our investors. And so not only are we in Brewery Town, we're in university city where Drexel University and Penn are okay . That the areas where we were playing, there were Opportuntiy Zones. We have a project in the next neighborhood over from us called Francisville, a former hospital that we're finishing up right now, redeveloping that was an Opportunity Zone.

Speaker 3:

Oh, I've read about that.

David:

Yeah. So we've pretty much everywhere we played or we're planning to play where Opportunity Zones and we said, okay, we're able to get our projects done now the projects work, you layer on this benefit. Uh , we felt that it would just be um, you know, sort of just a magnet for investors who are looking to invest in , you know , a lot of investors may not necessarily understand the neighborhoods that we were going into or felt there was too much risk, not really understanding them. We always inherently knew that we took the long view. We're not guys that are building this lift we're we're building to hold . And so we inherently understood that over time if your project was in the path of development and good neighborhood, if you were going to hold for 10 or 15 or 20 or 30 years, which is how you really create real wealth and real estate and look and look at these New York and Washington DC, you know , families that are dynasty that I'm on real estate for generations. Over time, real estate is going to appreciate. There will be cycles in between and as long as you aren't over levered, as long as you aren't building something that should never have gotten built to begin with. Um , we felt that , um , you know, we'd be in good shape. So for us, number one, the deals have to work without the benefit . The benefit to us is greatly . Um , and , and that's the approach we've taken and will continue to take. Um , because if you look back over time, people started to do dumb stuff to avoid paying taxes. And if you look at the 80s, obviously I was a kid then, but heard, the war stories from guys that I worked for. Real estate, was getting built purely as a tax shelter with no need for the inherent real estate that was being built. And so there was this massive overbuilding which led and turns it off to the RTC and you know , a really serious correction with real estate. And so we've always, we've always taken the approach, the deal has to work first and foremost. And what we've found is the investors that we are doing deals with appreciate that sentiment. There's a fair amount of folks out there that are promoters who aren't really necessarily developers and see this as , as a new product to quote unquote sell and make fees off of.

Jack:

So you know, when I , I talked to an awful lot of folks in this, in this industry, in this space, specifically Opportunity Zone, I mean , so in some ways you're not competing with other developers. You're really competing with other developers who are in the Opportunity Zone space who are specifically , um , looking for the Opportunity Zone investment. What is it that that sets MMPartners apart from those , that particular set of competition?

David:

Yeah, I think, you know , for us it's sort of twofold . One, not to Belabor it, we've been doing it for 20 years before there were Opportunity Zone, so we really understand how to underwrite, we understand how to sort of comp out the apartments that we're going to build where someone be like , well, there's no direct in the neighborhood . Sure. But you know, we've sort of figured out through trial and error over 20 years, how you can sort of extrapolate that, you know, what the end rent would be versus a comp that maybe is 10 blocks in a better location. I also think we're very good at being creative with the capital stack. So it doesn't just mean raising those deep capital. It means if the building is old enough to get a start tax credits, both federal and state , um , getting interesting subordinates financing from government agencies and basically being able to use leverage in a, in a non-dangerous way. And by that I mean you're not levering off with, with toxic debt that if the tide washes out you're toast, you're using tax credits and low interest secondary financing from government agencies that enable you two need to raise less equity capital and at the same time bolstering your returns if you're correct. And so I think those two things have helped have helped differentiate us.

Speaker 3:

Yeah, absolutely. And I, you know, it's funny, I , I've, I've talked to just talk to somebody , uh, in Atlanta, guy named Jerry McGaughy and he's, he's doing the same thing in Atlanta. He's, he's figured out how to just, how to layer all these different types of tax credits and tax abatement and nonstandard financing , um, in , in a lot, in really creative ways . So it's good to know that there's folks doing that out there. I haven't asked this question of anybody, but , um, I want to ask it of you just cause it seems appropriate. What's an ideal outcome for you as a result of folks listening to this, to this podcast today?

David:

That's a good question. I think first and foremost is just sort of going in eyes wide open that if you're an investor, the deal has to work on its own and don't be so enamored by the tax savings on the front end to defer , you know, whatever it's a stock sale or a business sale or , or another piece of real estate, you know, understand that fundamentally the deal has to work. And so I think for me it's important because I think what the danger is, you start to see bad deals getting done and it poisons the well for everybody. And that's like good for folks like myself or other people that you've had on the show who are responsible and doing this the right way and don't want to see this, this program disappear or get a bad reputation. So I think really that people understanding that fundamentally this is real estate development one-on-one. The deal has to work when you layer in the tax savings. Yes, it has a benefit, it has some value in terms of return, but you don't want to go and do a bad deal

Speaker 3:

if you have , uh , you have published an article about using social media as a developer and it's obvious that, that you've given some thoughts to this. Apparently it, it looks to me like from a marketing standpoint, you've, you're pretty sharp in this regard with the social media. How did you, how did you figure that bit out? That's really unusual for a , a developer.

David:

So getting back to, you know, when we started officially started in 2008 the economy was in the toilet. It was hard to raise capital and we just had to be really mindful of every dollar and frankly be cheap and you couldn't really underwrite large marketing budgets and projects. So we say , well, you know, Facebook's out there. And then Instagram came out, I think in 2010 we just started to experiment, let's use this. You know , it's, Facebook was good, but Instagram was really great because it's a visual and real estate as visual we do as visual we found was people like to see how the sausage is made, they want to see what it looks like when it's getting built. They want to know the history, they want to sort of get a view into what the day in the life of what you do as a developer is . And so it was literally us , hmm . Until maybe two months ago doing the MM Instagram ourselves. It finally just started to be to much. No. So literally the, I would say night up until April, all of the photos where myself on the MM we had some ancillary accounts as well that we still run. But it was authentic. It wasn't, you know , a lot of times you'll see people outsource it and the people that are outsourcing to. It just becomes very formulaic and cheesy. And we did, we didn't want to go there. And so what we found is , um, our target market is where they live . They're on these apps , uh , and they really appreciate what we did. We at least up our Pyramid Lofts building. Um, in pre-construction I would say of the 50 leases, 40 we're referrals through social media.

Jack:

I'll be darned.

David:

Which a, from a cost perspective, it costs you nothing other than the time to post a. B . It was really gratifying to see that , that it's working. Um , you know , w we're trying now to even amp it up even more by bringing in a photographer who runs the MNP one. We do a lot of targeted advertising on these platforms. We were able to, to , um, have you know different content to speak to different target groups and really experimenting with that. I mean , I think for us, Gary Vaynerchuk is really sort of our , the gospel and we're really trying to follow his social media marketing plan and his whole thing. It's like content, content, content every day, day in and day out across tons of different platforms. And niche content so that you're speaking to your various audiences with content that they want to see rather than one size fits all. And that's sort of the next iteration for us to try to get to.

Speaker 3:

I'm impressed. I, you know, as somebody who's , who lives in, you know, my native spaces, the marketing space, I know how challenging , um, and , and frankly what a time suck social media can be and to, to have cracked the code and do it well speaks. Oh , that puts you in an extraordinarily small group. Um, so Kudos to you. I, I'm ,

David:

Ahank you. It's a lot of, it's just trial and error and right place, right time ,

Speaker 3:

uh , you know , well, what, what's that saying? Uh , all that hard work tends to increase your good luck. Um, I want to talk, I want to talk a little bit about , um, about David Waxman, the man rather than David Waxman , the developer, just because this is, I think this is fun. How did you get in interested in becoming a developer? What's the backstory there? It seems like you've been on a pretty straight trajectory for most of your life.

David:

So as a kid , um, my dad's , my dad's a physician. Um , a lot of his patients and very close friends were the guys building Philadelphia. And so just as a young kid that was around it , um , his closest friend , um , was a developer . And I remember spending a lot of time at his office. He would have models of the high rise as he was building. And just something about him and what he did and the way he carried himself. I knew it was what I wanted to do and when I went to college it was a decision that I roll and I don't want to do this. There's not a degree program for it. I mean today, there are a few degree programs for it. There weren't, wasn't in that in the early nineties. And so my choices were at go A business track or B , I can do this sort of urban studies and public policy degree at Bu , uh, where it was very fluid and I had the ability to pick and choose classes from any school in the university, graduate level and undergraduate level . So that's business classes, that's law class architecture, urban sociology, urban psychology , um , land use, financial analysis, et cetera. And it was, it was a great experience. I also got the opportunity to do some research for a sociology professor , uh , on work that he did where he was examining , um, various redevelopment strategies and what successful and what's not. And that was a great experience. I worked at the Commerce Department of Philadelphia studying tax abatements, you know , their cities before Philadelphia passed its own. And so really for me, the best learning experience. So it was post college working for 'em , a handful of developers, first in Miami for a guy that did shopping centers and condos. Uh , and then in New York for a guy that did a lot of loft conversions and interesting retail in Soho and Tribeca. And then when I came back from Philadelphia to do my own projects, I also worked with an older developer here doing large scale projects while doing my own. And really mentorship and learning from these guys was the key. And I think most interesting was my first job in Miami. I literally made $200 a week, but the trade off was, you can follow me around, you can sit in my office, you can ask me anything you want open book, you're gonna learn a lot. I think that's sort of a lost hanging out for a lot of young people that there not willing to do that.

Jack:

Wow. That's, that's more like a.

David:

Apprenticeship.

Jack:

Yeah, an apprenticeship. I've heard a story and now I heard a story about an investor. Gosh, who was it? I was, I was, heard the story. He, he, he wanted to go to work for Warren Buffett and he told him I, I will work for free if I can just follow you around. And, and Buffet said you would be overpaid at free, and you know there's, there's actually a lot of, there's a lot of wisdom in there and , and I think at $200 a week, as awful as that, I'm betting, I'm betting it was, it was, you would have paid to be part of that. I'm just betting .

David:

Yeah. I mean I think it's, yeah , it's sort of a lost art. You know, everyone is like, oh, well my friend got this job out of college paying $80,000 a year and for 21 year old kid , what do they know in that , you know , unfortunately the goal getting back in social media, they go on social media and they see their friends flaunting something, they spent money on a fancy trip. They feel like that happened to keep up with that. But I think, and then when I started to do my own projects for smaller scale, that was a whole new level of understanding because once you're out there and you're exposed and you're borrowing money from a bank and it's your money you've invested in, maybe you've raised some from , from some friends and family, the buck stops with you. And so every decision , um , has an effect. And so, and that's where you really start to start to learn. And frankly, you know , you can kick your balls, day in and day out and as long as you can keep getting back up, showing up the next day and pushing and pushing and pushing, you will find success. I think, again, that's another lost art. People are impatient and we want it. They want it yesterday and aren't willing to put in the work. You know, and people from the outside think this all development is sexy business. And you know , you go to lunches and you drive fancy cars and you know, they don't understand the work that goes into it. Um , and just, you know, the anguish of like those sleepless nights where you're like, wow, I'm really exposed here. You know, we had a problem with this and I have to fix it. And you know, the l oans due in six months and we're two months behind schedule and you know that that's, y eah, no, not for everybody, but I think if you w ork t hrough o ther folks and sort of understand how they solve problems, particularly these older guys who w ere involved with the R TC i n the early nineties and hearing these stories, it's just amazing.

Jack:

Oh yea.

David:

So , um, that's, that's how I got there. And then when I started doing my own projects, started small and then a couple of small ones at once and then a medium and then a couple of mediums at once and then a big one and then multiple big ones at once. And you know, it's just sort of, okay , I worked for, I had the saying it's all blocking and tackling whether you're building a fourplex or a hundred unit building, but you don't know that until you've done it over and over again. Understand the rhythm of things and how diligence works and how predevelopment works, how financing works. And so it's essential to sort of do this with people who've done before because it's, you know, you learn from their mistakes, frankly.

Jack:

Do you have, do you have folks in the skills, in the trades , um , who've been with you? And I'm not saying as employees, but who've just been doing projects with you for, you know , over a decade. They just know, hey, if Waxman's doing it , we're in.

David:

So we've been lucky . We have on the investor side, we have a core group of high net worth. So pretty much do come along on all our projects. Um , very early on we had for the large scale adaptive reuse, we have our goto general contractor access construction with just great group of guys. And you know , they've sort of been looking for a long time for a developer that they could have a programmatic relationship. We'd been looking for a general contractor that we can do that with and it's been fantastic. I think we're on our fifth project with them. Same thing with our architects. Marshall Sabatini phenomenal from just, you know , really understand how to do work for developers. It's not, it's not the easiest thing and knows how to balance between building a really quality, nice building but also understanding costs, cost ramifications, particularly when you're building to the middle. You have to be very mindful of costs. And we actually generally have the same major subcontractors when all of our projects as well, which is , which is great. They like working for our team . They get paid on time, they understand how we like to design our buildings and , and, and it makes it so you're not starting from zero every time we do a new adaptive reuse project.

Jack:

Right.

David:

So it's been great for us and it was a long time coming to find the right mix and we , and we, we found it just frankly through trial and error.

Speaker 3:

I can imagine. One of the questions I want to ask you is, do you have an , a notable memory of a project that at the time felt like , um , a failure that in retrospect you realize it was a really great thing for you to have, have gone through that has made the difference in your success? I realize that's a complicated question, but I think,

David:

No, that's a , that's a great question and I think it's a pretty easy one. So we had this , uh , really interesting historic project that we completed and 2016 called the A.F. Bornot Lofts in the Fairmont neighborhood of Philadelphia. Sum to 50,000 square feet of historic buildings had determinate the initial contractor, new contractor came in and the cost accelerated exponentially. Um , we also, at the same time, our construction lender, their bank was purchased by another bank and it was like this perfect storm. And, you know, one of our investors who was in the deal, who was the older guy was a retired developer or actually still developing, you know, he was very helpful to me as sort of a mentoring like, you know, this is, you're crossing the Rubicon , you're going to get through this and you , you're gonna see like this is the worst case scenario of what could happen and you're going to turn it around and, and it's going to be a really a big milestone for you. And Lo and behold, he was correct. I just punched through, got it done, leased it up, refinanced it, and you know , it's turned out to be a good project for us. Um , but I think more importantly, psychologically for me it was like, okay, you can solve whatever problem is thrown at you as long as you keep your head up , keep pushing forward and you know, have some folks that are on your team that believe in you and are willing to, you know, fight for you. So I would say, you know, easy to, to identify the project .

Jack:

I used to back before I was a world famous podcaster, right ? I got my start in the tech industry and I spent a long time in the tech industry and I used to tell clients, you know, they'd ask, well, why should I pay your rates? You're a whole lot higher than, than, you know, this, this bright eyed, bushy tailed young kid over here. And I'd say, well, I've fallen in all the ditches. I know that. I know where the ditches are, how keep you out of the ditches. It's, it's , it's more than just, you know, being able to, to get out of them. It's, it's no one where they are and they're in any way to learn that lesson other than just falling into them. Keeps you from doing.

David:

Tuition, exactaly. Tuition, it's what we call it, y ou k now, it's expensive for a reason. If you don't learn from it, it's at your own peril.

Jack:

And that's the truth. Hey, I wanted to ask you, this might be a little bit of a curve ball and if it is, we'll edit it out. Um, tell me about Vita Products.

David:

Ha , yeah, of course. So I've always had a bug for technology. I love, I love tech on most startups. I love creating things. I worked with an executive coach and one of the things we discovered early on through some , some testing was like I thrive on being creative and creating things and figuring out how to get from them from A to Z in a straight line. And so, you know , in the late 90s while also doing real estate, I started a company with a couple buddies and we were literally a couple quarters from an IPO and 9/11 happened and the Nasdaq tanked and it was a great experience. It was almost like getting my MBA at 23 years old. Um, we went from, you know, a team of five of us to a hundred plus people, multiple offices. It was really interesting. So I never sort of lost that bug. And so myself and a really good buddy of mine, Jason Brown and I grew up with here in Philadelphia, came up with the idea of a wearable device that held your health records and also a contactless payment chip like that is now on your iPhone for active people. The idea was you go out for a run, you either don't bring anything or you 10 in your sock , or if you're a woman, you put it in your sports bra, you know , that didn't work. So we created this product that didn't exist. Um , we were very early. Uh, you know, contactless readers are now ubiquitous. At the time they weren't , um, but we moved about 10,000, 15,000 units. We had some pretty interesting partnerships with U.S. Bank , with Nathan , uh , which is a running apparel company that licensed our technology. But at the end of the day, we couldn't get the traction because of the lack of the contactless readers, which today are, are , you know, because of Apple Wallet and Android pay are sort of ubiquitous. Um , tech timing is just, I , you know, you come from that place. Let me tell you is everything. Um, and so sort of at the time we created, it was almost like a solution looking for a problem rather than today where, you know, it would probably be pretty widely accepted. But again, it was, it was an amazing experience. It was very hard working with the banking industry. I mean we couldn't necessarily pick the harder space or we'd get it. We got it done. It was um, you know, looking back, I can say it was a lot of fun at a time that was difficult. But at the same time I was also building MM um , so it was a , it was , it was certainly an interesting time in my life. I was not married at the time, didn't have kids, so I had a lot more time to dedicate to these things.

Jack:

Okay . Isn't that the truth? I was going to say this doesn't sound like somebody who had much of a family life.

David:

No, no, not at the time.

Speaker 3:

Hey, I'm , why'd you pick B.U. Why ?Boston

David:

A good question. Interesting enough , I think from my high school, it might be like a one or two most popular schools for whatever reason. I don't know why. Um , I visited a bunch of my brother's friends who are older. I went there and I saw , I visited there I think when I was in 10th grade. And in all honesty, I think I spent five minutes on campus, but just like being up there and doing things that probably a 10th graders shouldn't be doing that for another time. I just said, hey, this place is great. I want to come here. Um , who's was one of a handful of schools I applied to. They offered me an academic scholarship as well, which was certainly enticing. And so , um , you know, it was , it was either there or George Washington, which are very similar schools just in different cities and I just felt like I want it to be in Boston more than Washington DC. Um, so yeah, it was a , it was great. I really , uh , I really enjoyed it . Actually, interestingly enough, went back and did a guest lecture for a, a real estate class two years ago, two years ago. And it was really a lot of fun.

Jack:

I bet that was a blast. Yeah. I haven't had a , my college has not asked me to come back and lecture to the music composition department. Oh Hey. Um , so a couple more questions. I just, cause this is interesting to me. Uh , why the name MMPartners? There's just as I can tell, there's only one M anywhere in your name and it's in the middle. That doesn't make sense.

David:

Yeah, that really doesn't, you know, I think when we started the company, you know, somebody developers like love to put their name on it and we just like , we didn't want to do that. You just, we just sort of liked the way it looked and you know, from a logo perspective and so there's not really much to it unfortunately. I think that , you know, the long story short is I need to come up with something because this is like 50 millionth times when asked. And I think people sort of glaze over when I don't have a good answer.

Jack:

Actually. Actually I really like the answer of I liked the way the logo looked. Yeah, that's, that's a really good answer. That's ,

David:

and the URL was and the URL was available and that's that bi fold.

Jack:

Well, yeah, there you go. That's a good one. Well, David, I'm , I'm sold. I'm , I'm totally in. I think, you know.

:

Fair enough.

Jack:

If folks, if folks want to get a hold of you, get ahold of him MMPartners and talk more about the projects and how they can be involved, what's the best way to do that?

David:

Uh , so our website is www.mmpartnersllc.com. Our social media, Facebook or Instagram is MMPartners. And allour contact information is there. They can also send an email to [email protected] And we'll get to us. Okay . Certainly really honored to be on the show. A lot of fun and truly appreciate the interest.

Jack:

Hey, awesome. I'm, I'm happy to talk to folks like you. I just, I feel like my brain gets bigger every time I , I interview somebody interesting. Like you. Um, any last words for us before I let you go?

David:

Yeah, just keep doing interesting podcasts. I love listening to them and , you know, keep creating awareness of the , uh , of the space. I think this is some really great legislation that they really does have the ability to positively affect neighborhoods throughout the entire country.

Jack:

Yeah. 100% agree. Well, I appreciate the time, David. For David Waxman of MMPartners. I'm Jack Heald the OZExpo Podcast. Thanks for listening to us. Please go ahead and click on that subscribe button so you're updated every time we release a new podcast. Those things you're dropping a multiple times a week and we will talk to you next time.