FULL TRANSCRIPT

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Slava Rubin (00:00)

In this episode of Smart Humans, we talk with Sanford Blumenthal, who's the Senior Vice President of Investments at Lightstone. He talks to us about the world of real estate and the opportunities that he sees. Having done over $12 billion of AUM as an organization, they now move into the world of direct, calling Lightstone Direct, giving everybody an opportunity to democratize access alongside them to invest into all of these real estate opportunities. We discuss where the market's at, what is possible, should you be getting into industrial, should you be getting into the life sciences.

why New York is still interesting, and of course, what his thoughts are on AI and the economy. All this and more in this episode.

Slava Rubin (01:03)

Hello and welcome to the latest episode of Smart Humans. I'm very excited for today's guest. We have Sanford Blumenthal, who is actually Senior Vice President of Investments at Lightstone. We're gonna be talking real estate today. We got a lot of to cover, but first I wanna say thank you, Sanford, welcome.

Sanford Blumenthal (01:20)

Thank you. Thanks for having me on this lovely chilly morning here.

Slava Rubin (01:24)

Absolutely, we're in New York. So we always start in the beginning, you know, where did this all come from? How did you get into the world of alternative investments? Take us back to as far as you want, childhood, high school, your first job, all of them. How do you get into the world of alternative investments?

Sanford Blumenthal (01:42)

Sure, you offered it, so I'll go way back when. So, keeping on the theme of winter, I'm a big skier, so growing up, I would go with my father all the time, skiing on Saturday mornings up to Hunter Mountain in the Catskills. And he was an investment banker, originally at Bankerstrasse, and then worked his way to Deutsche Bank. And he had one of those quintessential giant car phones in his car. And as a young child trying to sleep on the way up to go skiing, I would hear him yapping away on

doing deals on this enormous cell phone that probably costs $10, $15 a minute back then. So I was always growing up with the lingo. kind of was enmeshed in that whole world. But warping now to college, I specifically did not want to do an undergraduate business major. I wanted to have a broadened kind of perception of the world and have a depth, breadth of education that was outside the world of business, figuring that I would learn accounting, finance, and all that fun stuff.

on the job. So I went to UPenn, I was an international relations major. And there were moments in time where I fantasized about being a CIA agent, which is about as far from what I do today as you could possibly be. But ⁓ nonetheless, I think that gave me a literal figure of global view from that perspective of my education. But I did gravitate back towards kind of falling in the footsteps of my father within the world of real estate.

⁓ He was on the investment banking side, but I specifically wanted to get right into the principal side and avoid banking because part of that as well was you know, the the late nights of an investment banker in the late 80s early 90s and the grueling You know client service focused position he had was something that is obviously great for some but for me I wanted to get right into it, right? So that's kind of my whatever that was 45 second pitch of how I got to where I am and how I kind of dove into the world

Slava Rubin (03:33)

So do you go right out of college, right into ⁓ real estate investing?

Sanford Blumenthal (03:38)

Yeah, so that's a direct way of saying I graduated in 2007, right, when the world was unique. Summer of 2007 was a great time to start my career. I started my career at Vornado Realty Trust, which was at the epicenter of kind of that New York City distress, a little bit of trial by fire. And most of my friends were at Bear Stearns and they were playing Oregon Trail for those that are young enough to remember that game.

because the world had imploded right after we started our careers and, you know, they all went to law school and business school and moved on. But I started in the world where, you know, logic would say the REIT world is a little bit more rinse and repeat and boring, but being at the forefront on the main stage, kind of seeing the implosion of the New York City office market and being at the epicenter of the universe in New York at that time was obviously enlightening and

once again trial by fire, really learning how bad things can get. And I think that gave me real perspective as I've kind of morphed into my career. It was only in the last call, 24 months or so that the world in terms of finally seeing an interest rate that was not really above zero, right? Started to reignite the construct and concept of distress again. So I think I'm fairly well prepared to kind of

dive into that world and find risk-adjusted opportunity within the overall concept of distress in commercial real estate.

Slava Rubin (05:11)

Awesome, and now you're at Lightstone. How long have you been at Lightstone?

Sanford Blumenthal (05:15)

So I joined in the summer of 2012. And since then, the company has really grown leaps and bounds. So I joined with our president, Mitchell Hochberg. I was working for his family office for a number of years. And when we joined Lightstone, we had David Lichtenstein, our brilliant chairman. At the time, he had an organization, but he didn't have an institutional professional team. And the construct of investments, acquisitions team, asset management, development, construction, fully integrated.

and Mitchell and I, over the better part of the last decade, hired pretty much everyone that is now comprising our, view as a very elite team within the space.

Slava Rubin (05:52)

Great, and at Lightstone, are you focusing only on real estate or are there other assets that you're investing in as well?

Sanford Blumenthal (06:00)

So I would say 99 % of what we do is real estate. There's sometimes kind of a real estate tangential play where you're getting into the real estate vis-a-vis looking at an opco investment and then doing a classic spin-off play for the real estate. But for the most part, we're kind of your main buckets of flavors of real estate.

Slava Rubin (06:19)

Okay, great. And we're gonna dive a bunch more into real estate investing in just a second, but I wanna hear your perspective on what's Sanford's way of investing in your own personal net worth. So are you putting, know, the traditional portfolio is 60 % public equities, 40 % bonds, 0 % alternative investments. You must not have that portfolio since you love alternative investments, which is real estate investing. So what does your mix look like in regards to public investments?

you know, bonds and then alternatives. What would be that 100 %?

Sanford Blumenthal (06:53)

Yeah, so I would say a lot of it's direct investing in our deals, right? Because I believe in what we're doing. So I'll co-invest in a lot of our direct investments alongside our chairman, right? When we're balance sheet investors predominantly. So power pursuit with the team in terms of the friends and family here at Lightstone. And outside of that, you know, I tend to diversify away from real estate, frankly, because I live and breathe it every day. So I've dabbled in the world of crypto quite a bit. I'm not afraid to say it.

⁓ And then I will make some tangential public bets within the real estate space just because My day-to-day knowledge and kind of seeing through the fog of war allows me to jump into that world But I would say generally speaking I'm much more called like a 70 to 80 percent allocation to traditional equities and then the remainder being crypto or other

Slava Rubin (07:42)

And no bonds. Right, that's for grandpa. you're like, let's call it 75 % public equities, 25 % alternatives. And in that 25 % alternatives, you split that up to be, is that mostly real estate? And then is that 80 % real estate, 20 % crypto?

Sanford Blumenthal (07:44)

No Bonds.

Yes.

Yeah, generally speaking, depends on the cycle of the deal and how I put my finger in the air for I feel crypto pricing should be.

Slava Rubin (08:13)

Yeah, let's just double click on that crypto. you know, basically based on the math are like 5 % allocated into crypto, right? So 20 % of 25%, which is a nice holding, obviously more than zero, not a crazy holding like some of our guests, which are closer to 25 % total of crypto. So how do you think about that 5 % allocation? And with that 5 % allocation, how do you actually invest it? Are you only going into Bitcoin? Or are you diversifying beyond that into

L1, some YOLO, let us know what you have in mind.

Sanford Blumenthal (08:45)

Yeah, I have dabbled in the Dogecoin here and there just for fun. I view that more like sport. But in general, it's just pure crypto or in terms of Bitcoin direct. And then I will occasionally buy some of the ETFs and then do a covered call strategy or sell puts against it for income generating purposes.

Slava Rubin (09:06)

So when you say the ETFs, you're talking about like a grayscale product or?

Sanford Blumenthal (09:09)

Yeah,

yeah, bet or ether one of those.

Slava Rubin (09:13)

Great. And in regards to your real estate exposure, obviously it's probably mostly through Lightstone, but is there specific types of approach you're doing for your own self in terms of duration or risk or how you think about that for your allocation?

Sanford Blumenthal (09:28)

Yeah, I practice what I preach is what I would say, right? I'll invest in the same mode and kind of diversification and allocation as percentages as we are as a broader company. So when it comes time to investment committee and having the conviction of, hey, do you believe in this deal? Would you put your own money into it? There's nothing better from chairman perspective, looking at the team and saying, hey, these guys are practicing what they preach. They are putting their own skin in the game and they're along for the ride.

Thematically, I'll scale up or down depending on which specific strategies that I view to be more thematic and risk adjusted for the time, right? And ramp up or ramp down depending on which asset classes I personally feel are best suited for a particular point in the economy. But in general, we touch almost every food group. So I get that opportunity. I'm lucky enough to have that exposure to invest directly into our specific deals.

Slava Rubin (10:24)

It's a great transition you mentioned for where we are in the economy. It's a great transition for where are we in the economy? So I'm going to ask you a very open-ended question, which is, what do you think of the market? What do you think of the economy? Where are we with jobs? Where are we with unemployment? Where are we with rates? Where are we with AI bubbles? Where are we with recession? Just take it. Give me the Sanford Blumenthal point of view on any of it.

Sanford Blumenthal (10:53)

Yeah, sure. Obviously, sentiment-driven investing these days is highly politicized, literally and figuratively. There's a lot going on in the world. I could say that other than when I was very young and the Berlin Wall was falling, I think we're in a very interesting time in the world, ⁓ I think a lot more bad than good. If you just read the news every day, you'll go crazy. But that being said, when you look

and I only really invest on a domestic US basis. So when you look domestically, there's a lot going on that I think has either green shoots or has real momentum behind it. So we're heavily invested in industrial, for instance, right? So, and life sciences. So we've seen this trend of on-shoring, reshoring kind of hit us by storm in the last call two or three quarters particularly. And a lot of these policies are

driving investment dollars domestically. And how that translates into real estate is really interesting in the sense that, you know, putting aside the tariff mania and craziness this past spring, we're seeing companies make big commitments in terms of long duration bets to stay in the United States, particularly around manufacturing. Obviously, the tax incentives and the tariff implications of going elsewhere are severe. So what we're finding in our own portfolio is that the commitments are there.

The individuals are responsible for real estate allocation across a distribution network, for instance, of a major company. They're taking longer to make decisions, but when they make the decision, they're making it with a substantial commitment, both in terms of dollars and committed square footage. So that to me is ⁓ pretty compelling. Made in the USA is a real trend. It's a real thing. We kind of learned our lesson, obviously, during COVID. We don't want to be caught with our literal pants down.

and not have key medications and PPE and the key equipment that we need. It's not just that, right? It's going down the manufacturing and supply chain for everything and everyone. So we invest in lot of areas where there's what I call serving local rooftops, where it's literally a roof or it's a HVAC company, a plumber. So those companies, whether the economy is up, down, left, right, sideways, if you have a leaky roof, you're going to need to replace it, right?

We like serving kind of that retail customer base in either affluent or kind of middle America dynamics. In terms of the broader market, right, interest rates, where we're going, obviously my industry is incredibly correlated to interest rates. And I think there's been a hard lesson for a lot of people in the last call 24 to 36 months that cap rates are in turn very correlated with interest rates, not one to one per se, but.

People can't underwrite anymore with a condition precedent being that way forever. You have to have some caprate expansion. You have to have a broader view of the what-ifs and sensitize your models to account for big macro changes. So in general, I think that there's a lot of wind at our backs domestically for that expansion. The AI bubble, the effect of AI in general is obviously completely unknown. think if anyone makes a true stance on that, they know something that we don't.

but I'm more viewing it as, does automation, big Tesla guy by the way, so I throw that in there.

Slava Rubin (14:04)

Meaning you own Tesla shares and you like it.

Sanford Blumenthal (14:06)

Yes. How are the humanoid robots going to affect productivity? How are things going to change? I physically own my second Tesla, so I spent many an hour at superchargers. How is that going to change when there's robot taxis that don't need to eat or go to the bathroom or have a cup of coffee? Where are they going to sleep at night? Where is that entire ecosystem going to shift in terms of the charging locations? And how are these robots going to impact the productivity of the country?

I mean, the dream is a utopian world where you kind of sit down and have agentic AI create multiple paths of side businesses and you have a robot that's cleaning your house and while you're hanging out doing your favorite things and hobbies. I don't think we're there yet. I don't think we'll ever really get to that kind of world. Although some of that could be dystopian. I wake up thinking.

Slava Rubin (14:52)

You don't think we're ever getting to that world or would

you have a date? You have a year that you might feel we might be there.

Sanford Blumenthal (14:58)

Well, I don't think we're going to get there in a utopian kind of way. And I don't think we're going get there in dystopian kind of way. think ultimately,

Slava Rubin (15:05)

When are you gonna own, since you're a big Tesla guy, when are you gonna own an ⁓ Optimus Tesla robot? When are you gonna have one?

Sanford Blumenthal (15:15)

I would say the second generation.

Slava Rubin (15:18)

Which

is what year are you predicting you will have a robot?

Sanford Blumenthal (15:21)

I mean, you take Elon's numbers, you add call it two to five years, right? So if I were to be a betting man right here now, I would say somewhere circa 2029, 2030 would probably be like the consumer version first coming out. that would be.

Slava Rubin (15:36)

2030

is V1 or V2?

Sanford Blumenthal (15:39)

I think that's going be a consumer V1, is probably going to you know, call it, they're past V1 conceptually, right? They're working on the hand a lot more than anything. But I think that'll be probably consumer V1 and a half, right? It's hard to put a model year on Tesla, right? Because they're constantly changing the software. But yeah, I wouldn't get the very first batch, put it that way. I'm not going to pre-order it. I'm going to wait to make sure that's...

Slava Rubin (16:01)

So are you buying

the 2030 one or are you buying a later one?

Sanford Blumenthal (16:05)

I'm buying, assuming the 2030 one is post foundation series, I'll buy that one.

Slava Rubin (16:11)

All right, nice.

Sanford Blumenthal (16:12)

I don't want to get the lemon or be the first one to get the first model year per se. I want to get the one that's right after the next wave.

Slava Rubin (16:18)

⁓ so.

What's your point of view, since you're bullish in general on AI, since you're going to get a robot in 2030, what's your point of view on all of the AI narrative in the market right now and what's happening with multiples and obviously Mag-7 owning a concentration of gains, et cetera, et cetera?

Sanford Blumenthal (16:44)

Yeah, I mean if you look at the interconnected web of all these guys invest each other, it's a bit incestuous. But I think anyone who's making the connection between pets.com and the original dot com bubble and kind of equivocating that we're in that same zone right now, I think that's a total misnomer. These are companies that have real revenue. These are companies that have real booked business, many billions of dollars into the future. I will say though, you we know this firsthand. We have

tried to dive into the power land infrastructure space and the delays of critical infrastructure and the complexity of putting one of these deals together is pretty extreme, right? And it's still from a real estate entitlement and traditional development and construction standpoint, the Wild West, there's a lot of people that claim to know what they're doing, but there's a lot, very few people that are really doing it. So I think the delay, right, of kind of pushing everything lock and step back, and we saw this obviously with Core Weave this past week or so.

⁓ I think that's going to continue, but I don't see any bubble bursting or this trend going away. I just think there's a realization that this country is incredibly far behind in terms of power utilization and enough trapped electrons finding their way home to use cases that we have quite a murky road ahead of us to sort all this out. But once we get there, hopefully it'll be to the benefit of everyone other than birds who are going to be hearing the humming of these facilities.

screwing up their migratory patterns. But yeah.

Slava Rubin (18:09)

Nice.

So a lightning round here. 12 months out. Let's call it Thanksgiving 26. Recession or no recession?

Sanford Blumenthal (18:20)

I say no recession. Assuming, big caveat, that geopolitical black swans don't exist and that from a Fed expectation, unemployment and all those things, the interest rate kind of dot plot generally falls in line with market expectations. I know the next meeting is a little bit of an insurance cut that the market's pricing in, but I think rates do need to come down.

If they don't come down materially, know in my world, the extended pretend world of a lot of these resi deals that were done in the 21, 22 vintage, they're going to run out of runway for the extended pretend. So I think there needs to be a quintessential interest rate based bailout, unfortunately, for a lot of my industry for those vintage deals that I view in the context of wine. Those are pretty bad vintages of wine, right? So they need to be figured out.

Slava Rubin (19:07)

For sure, and continuing some of the things you just mentioned. So continuing the lightning round. So unemployment, 12 months out, up, down, or neutral, red, yellow, green.

Sanford Blumenthal (19:17)

I think it's going to be up a little bit because I think companies are going to be little bit rash in their decision making of kind of reading the tea leaves and overreacting with the cut before they neutralize. And obviously, immigration is a huge component of that factor, is largely unknown. But the path of that is not conducive to adding to the labor force, particularly with visas and whatnot.

Slava Rubin (19:45)

So inflation 12 months from now, up, down or neutral? Red, green, yellow.

Sanford Blumenthal (19:51)

I

generally neutral. I don't view a world in which these manufacturers and the consumer mentality, if you're used to a price, it becomes sticky. It's very hard to take that price down. But I think people are not going to want to some of the exponential increases we saw in the past. I think there's a functional limit for people to take that.

Slava Rubin (20:10)

So you're not seeing much tariff inflation or AI deflation.

Sanford Blumenthal (20:15)

I think the AI deflation is years away from actually sorting its way through the system.

Slava Rubin (20:19)

Great.

Perfect. And then.

So as part of this, Fed rates up, down, and by how much?

Sanford Blumenthal (20:32)

Talking about a year from now?

Slava Rubin (20:33)

Yeah, Thanksgiving 26.

Sanford Blumenthal (20:35)

Yeah, I think down somewhere between 75 and 125 basis points. I'll call it an even one, 1%.

Slava Rubin (20:45)

Okay, so down 1%. And then finally, what is the impact of all of these opinions on the stock market, meaning New York Stock Exchange or the QQQ, meaning the NASDAQ, 12 months from now?

Sanford Blumenthal (21:04)

I think up, but not up as much as the pundits would say. I think the AI effect, as I said before, a lot of it's going to be delayed in the context of actually bringing the incremental compute on. think that perception becomes reality, and the capex spend naturally gets pushed back. But until such time as there's these breakthrough cases where it trickles down to your average company.

Obviously at the Fortune 500 level, right, the Amazon type level, you're seeing crazy efficiencies that could save a lot of money and that will trickle down. But I don't see the revolution in the traditional sense happening to touch kind of your small private family held businesses anytime soon. I think we're at least three to five years away from that kind of, and small businesses are still like the engine of this company, right? So this country, mean, which is one big company if think about it. But yeah.

I think generally positive, but I don't think we're going to continue this kind of endless outpacing traditional returns on a CAGR basis going forward.

Slava Rubin (22:08)

So if

I was gonna simplify this all down, you seem pretty bullish through 26, is that fair? Not aggressively bullish, but you're definitely not negative, but almost feels, I'm gonna say almost Goldilocks-y.

Sanford Blumenthal (22:20)

We like to use in our company the kind of cruise ship or battleship analogy. You can't turn those things on a dime. So obviously, there's exceptions to the rule. But our view is that we're on a path. That path will continue on, generally speaking. And you're not going to make these sharp right angle turns but for something horrible happening, which we all hope doesn't.

Slava Rubin (22:42)

Great. Well, you're clearly a smart guy and where you invest your smart guy time is at Lightstone being, you know, in charge of the investments. So can you tell us about Lightstone? And I know you're working on a new initiative and we'll talk about that in a second. Can you tell us first about Lightstone? Exactly. What does Lightstone do and what do you do there?

Sanford Blumenthal (23:02)

Yeah, sure. So we like to think of ourselves as kind of one of one. And what mean by that is we have the breadth and depth of capital of a major institution, plus or minus 12 billion AUM and growing, but we kind of remove all the bureaucratic nonsense that you see in other large organizations, meaning we let our human capital talent foster, grow within, and everyone has a voice at the table. We're nimble, right?

quick decisions. We don't make rash decisions. We don't make unsafe decisions in the context of kind of investing, shooting from the hip. We calculate our bets, but from our perspective, we have a very simple mentality here, which is don't be the schmuck that pays the highest price, right? If you win a mass market broker process, you end up at the end of that beauty pageant with a beautiful blue ribbon on your side that says number one, right? Number one, buyer.

setting price records for this asset at this point in time. Brokers are great. I don't see AI replacing them. There's a lot of talk of that in our industry. But in the end of the day, it kind of cuts both ways. You don't want to be the guy that wins that beauty pageant. But at the same time, there is some benefit to on-market processes because you have a bid-ask spread that becomes fairly narrow at the end. So we're very calculated in making tangential bets to those mass-marketed deals that have the same momentum-based investment.

desis and underlying fundamentals, right? But you're getting an arbitrage play by moving quickly, finding the right opportunity at the right time and using our balance sheet and speed to kind of clear out the competition. So what we've basically done, and this kind of stretches across all of our asset classes, using, you know, planes as an analogy, right? Finding your spot, your pocket of air, right? Your price strata and deal size strata. We're able to basically do the deals that are too big for the small guys.

Yeah, too small for the big guys on a one-off basis. So we're buying the same ingredients to the cake that the big guys are buying, but we're assembling those ingredients one by one, almost like you're making, I'll go to a chili packet, because my wife's actually making chili tonight. It comes perfectly packaged with the flour, with the mesa, with the cayenne, if you so choose to go that route. We're effectively doing that, right? We're concocting and putting together our own portfolios on a one-by-one block and tackle. And the deals we're doing,

are out of the reach of the small syndicators that are syndicating all the equity, let alone the hard deposit money. And on a one-off basis, they're not worth the time of the large players in the space because time is most valuable commodity. And they have capital needs to be more efficient, deploy a capital at three, four, five million square feet at a time. So yeah, I'll pause there.

Slava Rubin (25:39)

Yeah, that

was great color. ⁓ 12 billion AUM is quite a bit. So what is your, let's call it average deal size that you're looking for? And just to double click, again, this is 99 % all real estate. And when you say assets, it's really all kind of slices of real estate, right? So I would love for you to give any more detail on the types of slices. I know you've mentioned that briefly before, but can you mention what's the average deal size that you're looking for? And I know it could vary, but just to give some guidance.

Sanford Blumenthal (26:06)

Yeah.

Yeah. So I'll kind of give it quickly by food group. So in industrial, we're largely focused on shallow bay multi-tenant nationally right now. Those deals are as little as called 15 to 20 million, but as high as 75 million, if they're kind of a three or four pack, I would say our average is somewhere around 30 million gross asset value per transaction. Multi-family, we tend to be more focused because we have between 25 and 30,000 units nationally right now. We tend to scale up.

to make our time more valuable and hit our economies of scale better. So those are more in the realm of called 60 to 80 million and up on a per asset minimum. And then hotels, we have a very big historic portfolio of hotels. We're known for unleashing the Moxy portfolio domestically. We're actually working on some interesting ultra luxury products that we'll announce in the near term future as well. Those deals tend to skew up much higher. So.

called entry level 150 to 200 million gross assets value and up. And then life sciences also kind of mirroring our industrial size point called 30 to 50 on average.

Slava Rubin (27:11)

And are those like your four favorite flavors right now or have been?

Sanford Blumenthal (27:15)

Generally, yes.

but there's obviously a lot of detail in terms of kind of peeling back the onion into the sub-sectors within those to optimize our capital deployment and kind of find our area where we like to press forward.

Slava Rubin (27:29)

And what's your typical cadence? So like in 2024, last year, how many deals did you do?

Sanford Blumenthal (27:36)

So we tend to do between half a dozen and called 15 or so individual transactions per year. It does become lumpy in the context of some of these sizes are all over the place. So when I say half a dozen, that doesn't mean that it's $180 million of deals, right? We tend to be in the 700 to a billion per year. So some of those transactions are large portfolios. We've skewed to be much more volume driven in terms of individual assets.

⁓ which obviously also coincides with our investment goal. So our run rate right now, or at least on the industrial side, we're north of 100 million a month of product coming in. So gross asset values were well above a billion on a run rate. And then multifamily has been tough sledding as of late. So we'll selectively go in and buy deals when we see that arbitrage value, particularly in markets where we kind of have the cheat sheet of knowing the rents, knowing the expenses, knowing the tax plays. And then life sciences, we're really heating that up.

That's one of my favorite sectors right now because the blood is in the water and there's a rational fear that has overtaken the psyche because a lot of people got burned.

Slava Rubin (28:44)

Sorry, which one is the blood in the water? Did you say multifamily or the life sciences? Yeah.

Sanford Blumenthal (28:47)

Life sciences, there's

blood in the water in multifamily, but the proverbial come to Jesus has not happened yet where the extended pretend is still in full force and you're not having that realization moment where investors are blowing apart with those assets. But life sciences, totally different story.

Slava Rubin (29:02)

Does that coincide with biotech struggling in the public markets?

Sanford Blumenthal (29:06)

Absolutely, very fundamentally. Yeah, it's a spigot that was using fire. I'm a big analogy guy if you haven't caught on yet. ⁓ Drinking out of the fire hose was an understatement, right, in terms of any random suburban office building. You could just slap a life science banner on it and what could go wrong, right? The reality is a lot went wrong, because these are very specific tailored business plans with base building systems and specific scope and stats of the buildings need to match the business plan, right?

Slava Rubin (29:13)

We've caught on.

Sanford Blumenthal (29:36)

fit a round peg into square hole. in general, the spigot of VC dollars closing, and then you have the compounding effect of what's going on with the NIH, it's kind of a perfect storm, right? And interest rates rising. You have all those factors coming into play that have decimated the relative values of the individual assets. And we're finding incredible buys in the market today in that space.

Slava Rubin (30:01)

Great, so thank you for double clicking on Life Sciences. Multifam, we've had some feedback before and you gave us a little bit of color. Can you give me a double click on industrial and why you like what you like and what you don't like in industrial?

Sanford Blumenthal (30:13)

Yeah, industrial has become commoditized. However, what industrial is today is what multifamily was 15 to 20 years ago. And what I mean by that is fragmented ownership. There's still relative kind of strength in markets and buys that have not been fully kind of picked off in terms of the meat off the carcass. have a lot of, I'm not gonna call them simple stupid investments because that's downplaying natural risks that are in.

the marketplace, but if you keen in, hone in on your supply-demand dynamic, right, we're very focused on supply and demand, very fundamentally, something that think the industry has largely kind of shied away from, or they refuse to look at it through the granular lens that needs to be looked at. With industrial, we look at a specific market, a specific sub-market, specific suite sizes, and then we use all of our various...

data sources to kind stratify that supply demand across, for instance, a 3,000 square foot suite versus a 15,000 square foot suite. And we find the tenants in the market, we find the ongoing available supply, we look at the relative product and quintessential qualitative comparison, and then we kind of put ourselves in the mind of a tenant. Where would I want to go and what relative price can I come in at? And when you look at the dollars, particularly if you're going in shallow bay, another couple bucks a foot per square foot per year on a couple thousand square foot space,

Slava Rubin (31:34)

Sorry, when

you say like shallow bay just for the listener, are we referring to like some space for Amazon to be able to like, you know, do drop off their deliveries or like.

Sanford Blumenthal (31:46)

More,

yeah, more multi-tenant, kind of what I described earlier, the local businesses that are the lifeblood of ex-urban or suburban America, where you put a point in a MSA, you go 35 miles out, and it's where, if you were to have a leak in your toilet today and you needed some sort of widget, right, or some sort of roughen. HVAC, roofers, it could be third-party logistics companies, small distributors. Part of the overall ecosystem in terms of consumerism,

Slava Rubin (31:51)

Okay.

so this is like some HVAC provider or were they?

Got it.

Sanford Blumenthal (32:15)

but not in your traditional e-commerce focus set. These are actual contractor type businesses that have supply and product coming in and out on a daily basis. Multi-tenant, where you may buy a building that's 150,000 feet spread amongst 15 to 20 tenants, for instance.

Slava Rubin (32:31)

And why is that 35 miles? I caught that. That was interesting. Why is that 35 miles outside of what's called the center of the MSA? So outside the center of Houston or Chicago or Miami, whatever, why is that the right distance? Why is it not 135 and why is it not 3.5?

Sanford Blumenthal (32:47)

So for all intents and purposes, another kind of tenet of Lightstone in terms of our investment thesis and how we operate, we don't like to be the lemming going off the cliff and following everyone else, right? If you start using ChatGPT or Google this, Gemini that, whatever, and you talk about industrial, you're gonna get the most common vanilla flavor answer, which is last mile logistics. It's all the rage. What the market doesn't realize is,

The crowded nature of bid-ask spreads and prices going way up and yields going way down for everyone chasing that same thesis is neglecting the obvious, which is when I say 35 miles, the reason is because labor is such an important factor of these businesses. We look for blue collar, gray collar type locations that are very affordable, good quality of life. And the foreman of the shop doesn't want to drive 50 minutes into CBD. They don't want to pay

$25 for a salad, right? They're creatures of habit. They want to be able to go to their job, have a good quality of life, and have an affordable house and community to live in, right? So we look at more of the availability of labor and kind of looking at approximate areas where good buildings in good locations can be in order to foster those up and coming businesses or long standing multigenerational businesses that service the local community. The real estate is just too expensive.

within that inner ring. And from a fundamental investment standpoint, kind of real estate 101, we're getting probably 50 to 75 basis points of going in cap rate expansion by going outside that main bullseye. But we're trending off of the same fundamental macro and micro momentum in that particular market. So it's kind of the best of both worlds without taking outsize risk.

Slava Rubin (34:35)

Awesome. So you're doing, you know, 700 million to a billion dollars of investment per year, six to 15 investments. And now you're introducing, this has all been done underneath the umbrella of Lightstone just for, uh, yourselves, but now you're opening up this brand new opportunity called Lightstone Direct, right? Where actually others outside of Lightstone can get involved with you. Can you share a little bit more of what is Lightstone Direct?

Sanford Blumenthal (35:01)

Sure, I think it's important to note kind of the genesis of how we had everyone kind of in their career has an aha moment. You we went down the path of being a sponsor on one of these, you know, a credit investor or retail crowdfunding type channels. And it was eye opening for us in the context of looking at the other deals that were on these platforms, knowing what we know about the specific markets. It really made us scratch our heads, right? We basically said,

We need an adult in the room. We need to clear out all the noise and the broker babble and kind of the selling that goes on in our industry and create a product that you could sit back and say, these are deals that I would invest in with my own money and I'm seeing the forest from the trees, right? It's almost like Neo in the matrix. You're seeing all the green, right? From our perspective, we saw this huge void and it was an addressable market that we needed to tap into and find investors that are of like mind.

that want to invest with a massive organization like ourselves with incredible human capital talent and align interests incredibly well. So, whereas not to put down the 33 year old entrepreneur that leaves their company after a few years to start their own thing, right? I wouldn't call them neophytes, but they're dangerously amateurish in the sense of they know enough to be dangerous, but not enough to avoid the lava pits. We've seen so many lava pits.

across many cycles, right? This gray hair, lack thereof, whatever thinning hair I have left is not for nothing. We have created a product where we could find accredited investors to invest alongside of us. We're putting at least 20 % of our own capital into the deals. We're very often times buying these on balance sheet before these investors are even let into the party. And our conviction in these deals is such that if these investors never existed and this opportunity to find these creative partners never existed, we're doing these deals with or without them.

Right? So what we're really doing is it's literal and figurative, allowing investors to directly tap into Lightstone and our capabilities and the breadth and depth of our platform expertise and kind of invest alongside all these trends and kind of major bets we're making across industries because we have that ability with our scale to see, you know, I'm a big hockey guy too, where the puck is going. I hate using that one, but

Love Wayne Gretzky. So we're super excited.

Slava Rubin (37:24)

I

love that one as well. Who's your team?

Sanford Blumenthal (37:26)

I am fortunately or unfortunately a New York Rangers fan. Last night was not so great, but my grandfather got seats in 1968 when the garden opened. So I can never get rid of them, nor do I want to. But yeah, I could go on and on for hockey here. But in general, know, Lightstone Direct is a great opportunity for investors for the first time really to come to a scale of an enterprise like us with all of our different verticals, all of our different flavors that we bring to the table and really

Slava Rubin (37:36)

That's amazing.

Sanford Blumenthal (37:56)

It's almost like they're investing in real estate, but they're making an investment into me, into my team, into our human capital and our expertise. And we are investing alongside them in these deals. So we're creating that institutional access to real estate on a deal by deal basis where they're not making just a read bet or a sector bet. They're able to pick and choose which deals they want to invest in at any point in time, which is huge.

Slava Rubin (38:06)

Awesome.

And is this a brand new initiative?

Sanford Blumenthal (38:24)

Yeah, we just launched our first deal, industrial deal in South Carolina, near Spartanburg right by the BMW plant that serves the exact types of tendencies and investment thesis that I've been describing all along on this podcast. So we're very excited. We're live with that first transaction and there's many more to follow. And we're going to be, you know, dipping into our different expertise in terms of asset classes along the way. But we're starting with shallow bay industrial as that's where most of our funnel

in terms of our most actionable deals these days are coming in through.

Slava Rubin (38:55)

Great, so let's take me as the potential client, because I could be a client and you would be a perfect salesperson since you run it. So do I have to be accredited, did you mention, or can I be unaccredited? Okay, so accredited only. And what's the minimum investment?

Sanford Blumenthal (39:06)

accredited

So we're really trying to solve to six figures and up as both an efficiency standpoint for our platform and really catering to the market's needs as we see it.

Slava Rubin (39:20)

Is that a hundred thousand?

Sanford Blumenthal (39:23)

Depending on the size of the investment, starting there upwards of 200 300 grand, depending on the scale of the investment, the minimums are going to kind of flex depending on the particular deal.

Slava Rubin (39:32)

Okay, great. Then you mentioned you're doing like six to 15 transactions a year with Lightstone. So is this the equivalent for Lightstone Direct of me being able to invest in one of those six to 15 investments, meaning the ones you would be doing anyway as Lightstone?

Sanford Blumenthal (39:46)

Yeah, now we're

just to be clear on the number of investments in our run rate in 25 is much higher than that are projected run rate in terms of individual deals and 26 and 27 is way higher as well. We're talking about dozens of deals. I've viewed more of AUM, right? And total kind of sizing. We have runway and purview from our industrial platform to hit stride without getting too far over our skis.

Slava Rubin (39:58)

Okay.

Sanford Blumenthal (40:10)

We're in the billion and half to two billion dollar gross asset value size. So we're talking about dozens of transactions and that's kind of been our run rate into 25, a lot more individual deals because once again, we're scaling down shallow bay, naturally our smaller buildings, more tenants, therefore the individual deal sizing tends to skew a lot lower than our typical kind of mega deals we've done in the past.

Slava Rubin (40:30)

Got it. But just to clarify, are there are lightstone only deals and then lightstone direct only deals or are they all one in the same?

Sanford Blumenthal (40:37)

So Lightstone Direct deals are really gonna focus in on particular strategies like that shallow bay multi-tenant or value add multifamily in our key markets or life science value add deals. There's potential in the future once we get in scale into our traditional hospitality, ground up development bets and whatnot to potentially integrate Lightstone Direct into that mode of investing. But for now we're really looking at as ⁓

individual deals that are more conducive to those check sizes and share number of investors on a per deal basis.

Slava Rubin (41:10)

Great, and what are the ⁓ fees or how do I think about fees?

Sanford Blumenthal (41:14)

Yeah, so I would say fees are commensurate with the value we're bringing to the table, their market, their prototypical acquisition fees, AOM fees, all the fundraising stuff is very prototypical. We're not fee-driven from the perspective of our investment thesis here. Once again, we're investing 20 % of our own capital. For us, it's all about making the investor their net return and for us to make a tremendous promote, which means that

If that were to happen, everyone is very happy in the end of the day. We're principal investors. Fees as a business unto itself, that's been a lot of the problems in the industry where people are investing 1 % or less and their fees outpace their equity. That's a recipe for disaster. We're putting our money where our mouth is. And for us, the whole dollar profits from the money in versus the money out is paramount for our day to day. That moves the needle for us.

Slava Rubin (42:07)

Great.

So let's just use the real example, which is the South Carolina industrial shallow bay opportunity next to the BMW plant. So let's say I put in 100k now because it's open. So what would be next in terms of distributions or getting the money back or expectation of returns? Can you give me some visibility on that?

Sanford Blumenthal (42:27)

Yeah, so the beauty of the deal is it's 100 % occupied. A number of the tenants are actually serving the giant BMW plant. Great place to visit, by the way, because you could sign up to drive any of their M-series cars on the racetrack, which is pretty cool. But for instance, we also have a company that manufactures a number of the components, the new Accelatrans. They're doing the super cool automatic sliding doors and the glass panels.

It's not just BMW focus, but obviously BMW dominates that market. In general, because it's 100 % occupied and because we have great debt in place, the investors out of the gate have very attractive cash on cash yields that far exceed any sort of treasury type yield, right? You're well into the high single digits out of the gate for that type of investment. And then depending on their particular tax situation, right? Depreciation obviously is a great thing to have as you build up a real estate portfolio. But in general,

It's a mark to market strategy, right? Most shallow bay. I'm kind of speaking agnostic to this deal, but in general, terms of the overall thesis, we're going into deals where we're certifiably buying well below replacement costs, proven comp analysis across the board. could become experts in the markets we invest in. And there's usually, you know, a 20 to 30 % give or take mark to market. So as the leases turn, there's a natural uptick in rents, vis-a-vis contractual rent bumps.

but there's also embedded called loss to lease or mark to market because we're finding deals where leases were either signed, you five, 10, 15 years ago with tenants taking fixed options. And what's happened in the industry is that market dynamics in terms of the macro and micro shifts, rents have grown outpacing the contractual bumps. So you have the ability to mark those tenants to market. And we're very conservative in our underwriting with how we handle renewal probabilities and

down times and tenant improvements for those that are focused on real estate analytics, we really take into account our ultimate risk paradigm here. And we're aligned with the investors to make sure that they have both the benefit of current pay yield and they have the ability to kind of uptick in terms of the value creation on the residual.

Slava Rubin (44:42)

So just to speak specifically to this BMW opportunity, the industrial one in South Carolina. So I put in 100K. So am I expecting a quarterly or annual yield? Is that what's happening?

Sanford Blumenthal (44:54)

Yeah, I believe the distributions are either going on a monthly or quarterly basis, but there's money out of the gate. And beyond that, we're actually offering a product whereby, kind of if you invest into the queue prior to the money actually closing, right, because we're going to be doing, I believe, our first closing right into the winter, where we're going to bundle the first X amount of investors and do a single closing of scale. While their money is waiting, kind of in limbo, they're earning a great yield that surpasses

quintessential treasury yield. And that is a distribution that ultimately benefits them while they're waiting to then get into the physical real estate and have a capital account with all the distributions and depreciation benefits and whatnot through K-1s.

Slava Rubin (45:36)

Great.

So on my 100K, you're saying I'm targeting something like 9,000 a year annualized? that something like that? Or what will be annualized? Might expect to return on this opportunity on a distributions annual.

Sanford Blumenthal (45:50)

⁓ so we are in the high single digits to low double digits, depending on which year of the cash flow you look at, of a yield on that. using simple math, you put in 100,000, you'll make somewhere between, call it seven to $10,000 a year on that bet in terms of cash flow distributions. And then looking at the overall return paradigm, this is a high teens IRR.

Slava Rubin (46:10)

Yep.

Sanford Blumenthal (46:16)

over called a three to five investment to your horizon.

Slava Rubin (46:20)

because I'm also getting the equity on that 100k, meaning it might become 110k or 150k.

Sanford Blumenthal (46:23)

the value.

Yeah, in terms of the residual appreciation on the back end, right? The terminal value of the asset under rent growth and compounded contractual bumps grows to a point where if you scrub and exit cap rate on that, there's a sizable bump in the appreciation of the asset itself. So, a lot of deals that the market targets these days have kind of one of two flavors. You either have solid yield and steady eddy.

at market leases that are just growing with inflation, to which end your residual value is kind of just moving in pace with a lower inflationary growth. So you get your coupon and then you get a moderate called high single digit to low double digit return. What we offer is kind of the best of both worlds in that out of the gate, you have well better than any sort of treasury type yield, not even on a tax adjusted basis, on gross basis, current pay, visa fee, the cash flow of the property.

But because the rents are below market, you also have the quintessential pop in value that can be realized within that called a three to five year investment horizon.

Slava Rubin (47:31)

Great, and when ⁓ would I be fully exited from my position after the yields and after, let's say, so when would I get my principal back, et cetera?

Sanford Blumenthal (47:41)

Yeah, so as you're holding the asset, you're getting that single, mid to high single digit yield while you're waiting. So over three years or so, you're getting called 20 to 25 % of your principal back fees of distributions of cash flow. And then on the back end, because the nature, and this is not specific to our South Carolina deal, this is the space in general. Most of these leases are typically three to five years. Sometimes you'll get some outliers. So because of that,

the moment you invest to the moment you exit, you'll naturally see a number of opportunities on the rent roll to mark those tenants to market. So called by year four or five, the bite of the apple would have been taken and the kind of moving the speedometer, if you view it that way, heading into kind of the higher rents and the higher ultimate value that all is able to be realized within that called typically four year horizon.

Slava Rubin (48:36)

Got it. So in total, what would happen, let's call it with a four year horizon is maybe I got eight on my a thousand dollar investment. I would have got $8,000, maybe somewhere between seven to 10, but let's call it $8,000 a year. So I got $32,000 of cash distributions and then my a hundred K of original principal value appreciated to let's call it 115 K. So I got 115 K at the end plus the 32. So I got 147 total. Is that right?

Sanford Blumenthal (49:06)

We anticipate higher pop on the backend. From a multiple on equity, we typically target in that two-ish range on a gross basis. Yeah, on the totality, it depends on the investment, depends on the parameter, but we're in the high ones to kind of low twos, depending on how big that mark to market. Obviously, if you're going into a deal with a 30 to 50 % mark to market versus a 10 to 20 % mark to market, that's differential on a multiple basis. But we typically...

Slava Rubin (49:16)

2X? wow.

So potentially

my 100K might become 200K and so I got ⁓ 100K turned into 232K. inclusive of cashflow. Okay, so potentially my 100K.

Sanford Blumenthal (49:40)

That multiple is inclusive of cash flow.

Yeah, total investment,

multiple investment and invested equity.

Slava Rubin (49:48)

Okay,

got it. So maybe I got 32 from the annual plus another 68 appreciation on the 100. So I got 168 plus 32, which is 200, right?

Sanford Blumenthal (49:58)

2X is the goal for a number of our deals, but our range is typically called mid to high 1X to 2X on a gross basis, which net of fees, net of promote ends up somewhere in that scale down a bit. Mid ones to high ones, multiple in equity.

Slava Rubin (50:14)

Nice. Okay.

Awesome. Well, this sounds super interesting. Obviously democratizing your real estate investing knowledge as well as the family business knowledge, all of that brilliance across to the market. Is there anything else you want to mention as it relates to Lightstone Direct? I definitely want to check out the South Carolina opportunity.

Sanford Blumenthal (50:32)

Yeah, I mean, we have a very robust pipeline. We've assembled a best-in-class team, right, both on the investor relation side and on the acquisitions and asset management and accounting side. We're fully integrated. So we'll handle everything, make it a seamless investment in the context of great communication, know, ability to have purview into how your investment is doing, obviously full disclosures and upfront access to our team to ask any questions you want. So...

We're very excited to engage with the investment community. We're very excited to open up our doors and welcome them into our family. And we have many more opportunities coming forth. And we think, you know, 2026 is going to be a great vintage for deals in our space. And we look forward to, you know, offering up deal by deal discretion to a whole new world of investors that frankly have not had this ability. They've looked at deals from, you know, a lens of mediocrity.

right, where it's upstarts without well vetted numbers, not having the right checks and balances in place and not having the right alignment. And here we are offering all of that corrected and doing it the right way, which has yet to be done in our strong opinion.

Slava Rubin (51:41)

Perfect. So obviously you're a smart guy. What is it you like to read, listen to, or watch to keep you informed?

Sanford Blumenthal (51:49)

So in terms of reads, I'm a big Walter Isaacson guy. I also like any kind of founders story, like the Everything Store, Jeff Bezos, obviously the Elon Musk, Walter Isaacson book. I'd like to kind of get into the minds of what they were doing during the fog of war and their most challenging times. Usually when I interview someone, I go right into it and basically say, what was a moment that you felt uncomfortable or you faced adversity? How'd you deal with it? Right? Those are the kinds of people I want to hire that could dig their way out of holes because life throws curveballs at you.

So I love to hear those stories of kind of the battlefield of startups and figuring out how these companies actually made it. In terms of day to day, obviously I my kind of blinders on during the day in my real estate job. So I focus heavily on some of the top tier research that we have in our space. Green Street Advisors is a great source. And then, you know, doing an anti-AI pitch for a second.

This is a people business in the end of the day, much like other businesses are. Knowledge, relationships, getting the market beat, talking to brokers, and grabbing a beer with someone going out to lunch. You'll learn a lot more about the state of the world than you will just merely reading a research report. So from our perspective, we keep those human networks very close to the chest, and we really like to treat our brokers well and get that information in a way that

really is helpful to our business and symbiotic to the overall ecosystem. that being said, BizNow is great for real estate knowledge, real estate alert, the real deal. It's more like the page six of our industry. ⁓ And then on that note, New York Post, big loyal fan across the board. And you will occasionally find interesting real estate content there, believe it or not.

Slava Rubin (53:24)

Yep.

Nice. And then final question. We always put everybody on the spot. Three years out, what's your pick? One in the public markets, New York Stock Exchange or Nasdaq, and one in the non-public markets. anything beyond. So give me your two picks and why.

Sanford Blumenthal (53:44)

So public markets sticking with real estate for a second, kind of diving back into the world of life sciences. You could look at the biggest names in the space, ARI, Alexandria, for instance, decimated 45 to 50 % down as we speak. I haven't checked it this morning. There's an interesting interplay there, right? AI has kind of two sides, two faces to it. One, people think it's gonna take jobs away and we're all gonna be living under the control of optimist robots one day. I don't believe that.

Two, AIs enable amazing progress, and particularly in life sciences, my view is, my bet would be that the amount of drug trials that are gonna end up going through the FDA and all the other channels hopefully is gonna increase for the humanity's sake exponentially, which means that although the science may be happening behind the scenes through AI models on a molecular level, in the end of the day, you need the bench space.

the actual scientists, you need the lab workers in lab space in good markets where all the intellectual talent is. And hopefully because there's gonna be more potential candidates, there's gonna be more physical trials that need to happen on an exponential basis. those benches within lab space should be filled up a lot faster than they have been historically and capital and BC money is gonna flow more efficiently. So that space has been decimated and I see green shoots and high hopes for humanity's sake, let alone real estate investment sake.

of making major, major progress against all the horrible diseases that we know exist today.

Slava Rubin (55:16)

Sorry, so which pick is yours? What's the ticker symbol?

Sanford Blumenthal (55:17)

I'll say

ARE would be one. Alexandria, ARE. Yeah. They're the biggest life science REIT for all intents and purposes. And they've taken the brunt of the blow.

Slava Rubin (55:20)

What's the letters? A-R-E,

Perfect.

Perfect, life science is really awesome. And then what's your non-public pick?

Sanford Blumenthal (55:37)

So I'm a sucker for New York. I would say that on the private markets, you have seen particularly in rent stabilized housing, a complete fear dynamic at play. You the new mayor, yet to be proven. Hopefully he finds a way to be a good mayor for this city, but there's a lot of skeptics out there. That being said, New York is New York. The talent that is in New York, the culture, the restaurants, the

IQ combined of everyone there, let alone the capital net worth is beyond measure. It'll always be the number one city in the world and you know, affordable housing is a big problem, but housing in general, it's a literal and figurative island when you're talking about Manhattan and the outer boroughs are very densely built at this point. But I believe in public private partnerships. I believe there's going to be a way to literally and figuratively dig your way out of the problems we have at hand for the benefit of all, both capitalism and on a social economic standpoint.

So, you know, when rent stabilized buildings are trading at eight to 10 caps and they were trading at three to four caps in lower interest rate environment, I just wouldn't bet against New York. Time has proven, you know, time and time again, duration. New York compounded 67 % over long durations of time. This is a lull. This is an opportunity. It takes conviction. It takes, you know, a lot of capital, right? And it takes a lot of patience because your yields during those periods of the doldrums are going to be very tough.

But politicians are not in office forever. The political pendulum will swing the other way at some point. And so long as you don't over-leverage your position and you buy with an open mind in the right neighborhoods, I think New York, in hindsight, called five, seven, 10 years from now, you're to look very smart having bought that type of product at ridiculously discounted to replacement cost valuation.

Slava Rubin (57:25)

Are we talking all real estate in New York City or are we talking residential or commercial or?

Sanford Blumenthal (57:30)

You could paint with a

broad brush, but I'm specifically honing in on some of the rent controlled, rent stabilized type product that due to constraints, and for those that don't follow the space as intimately as I do, the political regime and the current construct of laws in place have basically made it such that for every dollar you invest, you have a dollar, three dollar, five of expenses. It's a diminishing return because your top line can't grow in terms of regulations and your expenses due to inflation.

and repairs and maintenance keep growing, right? So you're actually having an NOI that's for all intents and purposes underwritten to decline substantially over the next couple of years, which doesn't make a rational investment for most.

Slava Rubin (58:09)

Amazing. Well, Sanford, have covered a lot of ground from you starting with your drives with your father, a hunter and the $15 a minute phone, which was the inception for you getting into finance as well. So thank you for sharing all that. Obviously you got into investments right out of college, a Penn Quaker. I'm a fan since I went there as well. And now you focus mostly on real estate, which is awesome. You shared about your personal net worth.

75 % into public equities, 25 % into non, most of that is into real estate, but you do put 20 % into crypto, which is awesome. You're really focusing more on the whole back into the USA movement. You are very pro AI, but not in a utopian way. You did tell us you're gonna buy Optimus in 2030, which is pretty awesome. During the lightning round, there's no recession, a little bit up on unemployment, inflation will be flattish.

The Fed will go down about a hundred basis points plus or minus 25 basis points and the stock market will be up You guys are doing incredible work at lightstone 12 billion dollars of AUM I love the fact that you said don't be the schmuck who paid the highest price and wins the ribbon. That's awesome You guys focus across four different flavors industrial multifamily hotels and life sciences You give us a lot of color into some great ideas across those four, especially the 35 mile radius away from

the main city for industrial. I thought that was really, really smart. Thank you for that one. You guys are doing 700 million to a billion dollars of AUM a year. You're going to uptick that to probably one and a half billion ⁓ this year or next. And now you have this brand new product, which is Lightstone Direct, really democratizing what you guys are doing so incredibly for years to the people who are accredited with 100K minimum investments, getting to be able to have access to right invest alongside of you guys.

while you guys do your 20 % minimum investment alongside of them. There's that first opportunity in South Carolina, which is already, everybody is already there and paying their rents, which sounds like an awesome opportunity. The goal is to try to 2X your money between the annual distributions within four to five years to actually exit that. So I think this sounds super interesting. You mostly are focused on industrial and multifamily for that specific product for the Lightstone Direct. You gave us lots of good ideas in terms of content. And of course,

You told us that three years out, you're betting on Life Sciences REIT, which is Alexandria, because you think they're getting crushed. So buy low, sell high. And then obviously you're very pro New York City. Thank you very much, Sanford.

Sanford Blumenthal (1:00:44)

Thank you. This was a great way to spend my morning here on Monday.

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