Episode 329: 08-13-15
On this week’s show we discuss the private finance industry and learn about EarlyShares.com, discover a new breakthrough in prostate treatment, and we talk to Crystal Lagoons CEO Uri Man to learn how to turn a desert into water.
Real Estate CrowdFunding Update
Heather Schwarz Lopes, CFP®, is Co-Founder and Chief Strategy Officer at EarlyShares.com. As CSO, Lopes spearheads strategic initiatives to help EarlyShares transform the $2 trillion private finance industry.
She leads EarlyShares’ education, community outreach, and client acquisition efforts with the goal of broadening EarlyShares’ footprint and building the company’s relationships with investors, customers, and long-term strategic partners.
We discuss where the real estate crowdfunding industry is today and where it is going.
Prostate Treatment Breakthrough
Uri Man is CEO of Crystal Lagoons USA. Uri leads the company’s partnership with world-class development companies that implement Crystal Lagoons’ amenity within their master plan and resort development projects.
We discuss how Uri’s firm transforms any destination into an idyllic beach paradise and what that means to the real estate community and YOU.
Episode 329: 08-13-15 (To download, right-click and select “Save Link As”.
Jim Fried: Alright. Big D, bring it on! We’ve got a great show today, we’re going to make sure you get the insight track in the race for real estate with our friends from EarlyShares. We’re going to talk crowdfounding, we’re going to talk about the UHealth prostate cancer breakthrough and our good friend Uri Man is going to be here to talk about how Crystal Lagoons is turning the desert to water. We’ve got a lot of content today. Turn it up! Stick with us! D, take us out, we’re going to come right back. Great content! We’re starting the show with Heather Schwartz from EarlyShares.com. Stick around. We’ll be here. You should be too. D, take it away.[commercial break]
Jim Fried: What a great break that was. And you folks out there will have no idea what was going on here. Let me tell you, it was a party. Alright, we are back and we are here with my favorite sponsor EarlyShares. We’ve got Heather Schwartz. Heather is..gosh, Heather, why don’t you tell everybody who you are?
Heather Schwartz: Thank you so much for having me. I am one of the co-founders and chief strategy officer of EarlyShares.com and I’m super excited to be here.
Jim Fried: We’re just as excited to have you. That’s a very fancy title. What does it mean?
Heather Schwartz: As one of the co-founders we had this vision 4 years ago to really create something special. And so what we’re doing, we’re taking private investing and taking it to a whole another level using new regulations that let commercial real estate investing be accessible online to new investors and it’s all automated.
Jim Fried: Yeah, but you said this is something special. You got together to do something special so as you’re passionate and hey, you achieved something special because I read up and I found out the statistic. I found out that EarlyShares is the market leader in real estate crowdfounding. Is that true?
Heather Schwartz: Of course it’s true. Otherwise, I wouldn’t be here today.
Jim Fried: You’ve got a great team over there at EarlyShares. You do these real estate deals any specific type because I know a lot of places they specialize and retail or apartments, what do you guys specialize in?
Heather Schwartz: We are asset agnostic. So we look at retail and facility capital for retail deals, for hotels, multifamilies, what is really important is looking at the clients that are raising capital on our site making sure that they have the expertise within their area that they’re looking to raise capital for making sure that the investment is structured properly for investors. They do through a significant due diligence list and when you look at the core of what they offer and what we are hosting on our platform, we are allowing accredited investors to participate in small pieces of commercial real estate deals.
Jim Fried: Isn’t that what people are looking for? Because it seems to me like people are searching around the world for yield and can’t find it.
Heather Schwartz: Of course. And so if you look at our platform, if you look at the offerings, guess what the average cash on cash underline cash flow is 8% or 9%.
Jim Fried: Is that leveraged or unleveraged?
Heather Schwartz: Leveraged.
Jim Fried: Okay. So worst leveraged they’re getting 9% return but that’s what real estate is all about. Real estate is all about using using leverage to enhance your return.
Heather Schwartz: And thing about what the rates are right now offered by banks. So you can get long term financing 5 or 10 years 3s, 4s, 5s, depending on the asset. That’s amazing. So if you look at the underlying cash flow and the tenant mix and location, there’re so many different variables that go into real estate taking advantage of that bank leverage, it really creates a nice cash flow for an investor.
Jim Fried: I remember when syndication first came out. It was the mid 1980s, I was at one of the accounting firms inventing the multicolumn spreadsheet at the time. And I wrote on the front page of the article that came circulated around the office because you couldn’t forward anything in email, it was all analog with 72 names checking next with. And we talked about the securitization business a I just wrote on – took a photocopy, wrote on it, I still have this – ”This is the future of real estate”.
Heather Schwartz: For sure.
Jim Fried: That was 20 years ago.
Heather Schwartz: For sure. And if you look at EarlyShares, our platform is syndication on steroids.
Jim Fried: You used the word and I’m so happy you did. And that’s what it is. And you see, most people start out trying to syndicate their real estate deals and they always start with trying to raise with the most expensive capital known to man: friends and family. I pulled one of my clients out of a deal when her father gave her all the money and her hair has been on fire for 5 years.
Heather Schwartz: Oh yes. And they still have to sit together at Thanksgiving and holidays every year.
Jim Fried: That’s right. The other problem sponsors have is preparing all the materials and getting somebody to opine that the person trusts. How do you guys do that?
Heather Schwartz: Yeah. So a lot of our sponsors, all of our sponsors have teams behind them. So it’s not just one guy that has a great idea for a particular real estate investment. These are professional investment real estate groups and teams that have been doing this for decades that are now looking to leverage the Internet to access capital more easily.
Jim Fried: I just want to say one little story. The story is how I came to know EarlyShares. Because to me, until about 8 or 9 months ago, I got to just say this, EarlyShares was a gimmick. It was a crowdfounding gimmick. Been there, done that. Well, I was uninformed. I think that half the world may still think that, I don’t know. I thought that crowdfounding was a bunch of guys sitting in front of their computers in their nightgowns or bathrobes looking at deals. Boy, was I wrong! I got to a private equity function, I go try to raise money for a guy, he goes: ”The heck with you, I’m going to raise private equity money on Brickell Avenue.”. I thought he was a rich guy. No, it was you!
Heather Schwartz: So, a really funny story about crowdfounding. When I first got into this business, crowdfounding, when people ask you what you do. Well, I have an equity crowdfounding platform. I would get that blank stare. So I would have to ask them, you what a Kickstarter was? ”No, I don’t know what Kickstarter is”. Alright, finally, do you know what Shark Tank was? And finally the light bulb would go off.
Jim Fried: My wife, by the way, loves Shark Tank, I’m forced to watch that twice every week.
Heather Schwartz: So, finally, crowdfounding has become such a buzzword that everybody knows what it is. And if you look at other types of crowdfounding outside the real estate such as in the lending space and the product space. It’s exploding, billions of dollars are going through these platforms. And we’re seeing the same thing within commercial real estate. We finally got to that billion dollar mark in 2014 of clients that are raising money with these new exemptions online. That’s a big number and it’s very small compared to where the market is going.
Jim Fried: Now that’s where you really make money. Let’s talk about that for a minute. What makes you different than the other 100+ firms in the real estate crowdfounding space? Just got to ask.
Heather Schwartz: Sure. And to be specific, there’s about 123 other platforms.
Jim Fried: Okay, because there was 117 when I talked to Joanna about 2 weeks ago.
Heather Schwartz: Alright. So we see one every day and a lot of people look at this business as:”You know what? I’m going to raise money online and I just need a really cool website”. But you know what? When you look at what really goes into this business at the core, it’s a financial services business, and then you’ve got a wrapper of education, a wrapper of marketing, wrapper of legal, and all on top of that goes the technology prospective. So when we look at EarlyShares, why we’re different? We have a senior team that has been doing real estate transactions for decades. We have a superior platform that is on the top in the country where we have an end-to-end transaction engine. So literally, think about everything that’s been done offline where we facilitate all of that online, make it super easy.
Jim Fried: Real estate transaction has really only become just transactional process management, there really isn’t a lot of creativity. Go, you buy the list from real estate capital markets, you mail everybody, you get 10 people that are interested, you finesse each one of them until they think that 62 other people are doing the deal and then you get the best price you can. What makes your process different?
Heather Schwartz: Yeah. So, think about the administrative portion of what you’ve just mentioned. Following up on customers’ calls and pitching deals, following up on deal documents and making sure everything is signed properly. So if you come to EarlyShares and you look at an offering, you’re going to see everything beautifully organized in a very easy to understand investor-friendly format. So all of your due diligence, all of your investor materials, performers, appraisals, everything is aggregated in a really nice way, really easy to understand. And once an investor is ready to commit and to invest, he clicks a button. He goes through a very simple process, gives us some basic information, he electronically signs all of the documents, he or she, let me be correct, everything is recorded online, and you can see it’s very accessible just like you can access to your investments on Merrill Lynch, you can access to your investments on EarlyShares very easily.
Jim Fried: That is awesome. So we’re going to get right back to that, each rate and all the other stuff. People were uncomfortable with this but know they’re not. And we’re going to hear more right after this break. D, lean forward, get your fingers ready! Push the button! It’s all yours![commercial break]
Jim Fried: Alright, we are back with Heather Schwartz. She’s the co-founder and chief strategy officer at EarlyShares. She spearheads the strategic initiatives that help EarlyShares transform the 2-trillion private finance industry. We’re going to talk to her about what makes EarlyShares different and why somebody that’s an investor or other professional in real estate better be talking to him. Heather back to the show. How are you doing?
Heather Schwartz: I’m doing great. How are you?
Jim Fried: I’m obviously all caught up in what we’re talking about. It’s jumbling my mind because the concept is so cool. So you’re doing good too because I can hear, sometimes I can see you thinking but that’s just because it means so much to you. And thank you for bringing that passion to this show. We love it.
Heather Schwartz: Listen. This is hard work. It’s a lot of glitz and glamor and we’re doing some really cool things but day to day it is really hard work and everybody back at EarlyShares at our office is very passionate about what we’re doing and we are making a difference. We are changing an industry. And we love it.
Jim Fried: I should just stop right there. I don’t know what to say after that. But that’s not true, I do. So what product types do you guys specialize in because you skirted that question before, you said you were property agnostic but let’s delve in do you only raise equity but could somebody also work with you on the debt component?
Heather Schwartz: Yeah, absolutely. We facilitate capital for both equity and debt investments. In fact, we have a nice variety of both of those online right now. So if you look at, I’d mentioned that you get 8% or 9% cash on cash, that applies to the debt component as well. So we are just launching tomorrow a deal from an institutional lender out in the New York. I don’t know if you’ve heard of them, Guggenheim Partners? You have? Okay, great. So anyway, what they’ve done is they’ve originated their first mortgage, they did the Mezzanine piece, and what they’re doing is that they are looking for the first time to re-syndicate that and create an access-
Jim Fried: Hold on, I didn’t understand that. SO Guggenheim is giving you a deal for you to place into your market? Hold on.
Heather Schwartz: Yes, sir. That was a high five.
Jim Fried: I think everybody kind of knew that. We’re not doing chestbumps, that would be inappropriate.
Heather Schwartz: Yes, it would.
Jim Fried: Golly! That actually blew my mind. Guggenheim Partners, big institutional player from New York.
Heather Schwartz: Yep. One of their affiliates, Pillar Finance did a debt for a multifamily rehab in Los Angeles and so, anyway, as part of that debt structure they did the mezzanine piece and they are putting that mezzanine available for an investment and for participation for investors-
Jim Fried: So, an institutionally originated mezzanine piece by the smart guys and ladies up in New York that usually only a high network private I belong to the club person, now that’s on your site?
Heather Schwartz: You better believe it. I forgot to mention something important: 9%.
Jim Fried: So it’s a 9%, unlevered 9 or levered?
Heather Schwartz: Well, it’s debt. So you’re participating in the leverage of the deal.
Jim Fried: So it’s 9% cash out?
Heather Schwartz: Yes, 9% return, term of 4-4,5 years. How do you like that?
Jim Fried: I like it better that the 4% bonds at 1.
Heather Schwartz: But those are the types of unique investments that we have visibility to. That’s the power of our platform. Because we have a national presence, we’re seeing all of these opportunities and all of these deals.
Jim Fried: Okay, so that’s a word that I wanted to write down that we haven’t talked about yet and I’ll prove it to you that I wrote it down on the last segment. The word is ”channels”. You are a channel. People that have a marketing background know that the most important thing about the marketing process is understanding the distribution channels of information into product. It sounds to me like you guys are staking out the future channels and the people that are the thought leaders in the industry are seeking you out.
Heather Schwartz: Absolutely. And very simply put, I like to say that we are in the digital pipeline business. We have a capital pipeline company. So talk about channels and talk about participants-
Jim Fried: You talk about shutting Jim Fried up when he goes:”Aaaaargh”.
Heather Schwartz: So think about the participants, here you’ve got institutions, you’ve got accredited investors, season sponsors that have really solid expertise and experience within commercial real estate within their asset class, they’ve been doing this for decades. And to me it’s a perfect mix and our platform EarlyShares brings this all together.
Jim Fried: I would say that everybody I know needs to know about this but they do because I emailed them about it today. This is fantastic. What size transactions can you guys do on the equity raise or the debt raise or both?
Heather Schwartz: Yeah. On average, we see deals from $500,000 on the smaller side all the way up to we’re working on a $20 million deal right now.
Jim Fried: And the $20 million is the equity portion or the overall size?
Heather Schwartz: No, it’s the equity portion, it’s the amount-
Jim Fried: So that’s like a $20 million deal?
Heather Schwartz: Yes, it is. Absolutely.
Jim Fried: You need to be more of a broker or a salesperson, it’s a $100 million deal and we’re raising $20 millions of equity and if you want to participate, you go to EarlyShares.com right now and look it up, It’s been underwritten, reviewed, it’s ready for you to take a taste and to test drive. Did I do it right?
Heather Schwartz: You did it perfect. Thank you.
Jim Fried: So Heather, what is your particular specialty? We talked about that you’re the chief strategy officer. Fancy title. What does that really mean? And before we keep going, I want to give a shoutout to Samantha and I think there’s two others that I’m missing.
Heather Schwartz: Nicole and Kaitlyn.
Jim Fried: Thank you so much. Because if that didn’t get on the air, there’d be problems later. So we’ve taken care of that. Okay, now, back to my question.
Heather Schwartz: So what do I do all day? That’s a really good question. It’s like what do I not do?
Jim Fried: I don’t know, you’re an entrepreneur. I watch Silicon Valley, I just want points. All I know is the word points.
Heather Schwartz: So my primary role is that I lead all of our deals. I talk to every single one of our issuers, every single one of our clients and really build the technology – I’m not programming of course – but just look at all the operations that go behind the technology. I come from the wealth management space. I’ve been at wealth management for 16 years. So I know how investors are thinking and I know what they’re looking for. So I’m very involved in the platform, very involved in working with all of our deals, deal structuring in regards to making sure that our deals that we have are suitable for our investors.
Jim Fried: That’s why they have to be accredited investors too.
Heather Schwartz: Sure, absolutely.
Jim Fried: And so if they’re accredited investors and they’re on your site, what is the number one question that somebody that places something on your site has? And what’s the number one question one of the investors has?
Heather Schwartz: For people that are raising capital on our site, really it’s about first experience. Please, set the expectation for me regards to process, investors and on timing. And then for investors it’s the similar thing, process and also getting familiar: 1- with the platform which we’ve gotten there, and 2 – with the sponsors.
Jim Fried: You keep using the word ”process” and I always call just straight real estate brokerage process management. It’s bulky, it’s hard, a computer can do it and we’re finding out that a computer can set the template but we’ve only got about a minute left. So, I need you back because I’m not done. I’ve got a lot of questions left but the number one question I want to have answer to right now is how do people get in touch with you? I know it’s EarlyShares.com but if somebody wants to call you, is there a number they can call? And please, give it slowly because, as you know, we have a lot of people from New York listening and Jets fans need it a little bit slower.
Heather Schwartz: Our number is 786-565-3344. We would love to hear from you and we’re located right here in the financial district of Miami on Brickell Avenue.
Jim Fried: Alright. My new best buddy Heather Schwartz, the queen of online capital raising. Heather, thank you so much for coming, we really appreciate to having you.
Heather Schwartz: Thank you.
Jim Fried: We’ll be back after this. We’re going to have our special UHealth guest on. We’re going to talk about new advances and breakthroughs in prostate treatment. Oh man, I know I got to find way out of this, I got two friends that are dealing with this right now. Again, thank you so much, to Heather and her team. D, I think I’ve given you enough time to queue everything up so it’s all yours.[commercial break]
Jim Fried: This is where I say ”I feel nice like sugar and spice”. We’ve got Dr. Shivank Bhatia on the phone. Dr Bhatia, hope I made it through that ok.
Shivank Bhatia: Yes, you did. Thank you for having me.
Jim Fried: It’s my pleasure. Dr Bhatia is an interventional radiologist at UHealth. He’s been doing some great research. I really don’t want to talk over all the great points that he’s about to make. So, doctor, I’m over 50, I’ve got lots of friends over 50 and a couple of them are fighting prostate issues right now. Let’s get right down to it. What’s going on with what you’re doing and let’s get it out to everybody.
Shivank Bhatia: Sounds good, Jim. Thank you so much for the opportunity.
Jim Fried: My pleasure.
Shivank Bhatia: So I’m an interventional radiologist which is a subspecialty of medicine where physicians perform minimally invasive procedures under emerging guidance via very small incisions which often lead to very few complications that conventional surgical techniques. We have a new technique for treating enlarged prostate or BPH and just to clarify, this is not related to prostate cancer, this is just for patients who have enlarged prostate which is a very common condition.
Jim Fried: I t’s like 50% of the people, the men over 50, right?
Shivank Bhatia: Correct. It’s more than 50% men over 50 and it’s at least over 15 million men in United States suffer from lower urinary tract symptoms related to benign enlargement of the prostate.
Jim Fried: I sit there every night and I’m totally afraid of when the night is going to start when I’m going to wake up 3, 4, 5, 6, times at night. So far, thank God, not yet.
Shivank Bhatia: Great. It’s just a matter of when.
Jim Fried: Oh, gee! Thank you, doctor.
Shivank Bhatia: I’m sorry.
Jim Fried: Larry, get this guy off the show. I don’t want to hear that anymore. I’m just kidding, take the finger off the button. Okay, doctor, so now you’re down there, the guy has got symptoms, you’ve taken your finger out, you figured out he’s got a prostate that’s a little swollen. First of all, people got to get checked before you can do anything, right?
Shivank Bhatia: Correct. We have an excellent multidisciplinary team here at The University of Miami. I’m an interventional radiologist but we close very close together with the urologists and what we do is we have this joined clinics where patients come in for evaluation with us as well as they go to urologist as all of us know that one size doesn’t fit all. So all the patients who come in will not be candidate for the particular type of procedure for the prostate. So we get all the baseline kind of test done in urology and then evaluate the patients for what kind of treatment is best for them.
Jim Fried: Well, doctor, so then if everybody needs a different treatment because one size does not fit all, what are the range of treatments? Go ahead.
Shivank Bhatia: Correct. So the range of treatments for urological perspective until now have been like conventional surgery which is transurethral resection of prostate where essentially the urologists go through the urethra and resect a portion of the prostate gland which is causing the obstruction to the outflow of the urine. And to relieve that obstruction, however, that surgery is considered gold standard but it comes with its own risk. It comes with complications such as risk of impotence, bleeding, risk of sexual dysfunction.
Jim Fried: Like being on Cialis for a long time.
Shivank Bhatia: Yeah.
Jim Fried: Okay. I got you. Guys, we understood that.
Shivank Bhatia: Great. So now let’s move on to what I am doing. This procedure is relatively new which is called prostate embolization.
Jim Fried: Wait. It’s new. How many places in Florida even offer it?
Shivank Bhatia: It’s only two places in Florida.
Jim Fried: Okay, you and some place else.
Shivank Bhatia: In Tampa, yes.
Jim Fried: Well, I’m not going to Tampa. It’s a long drive to set on one of those things.
Shivank Bhatia: In South Florida we’re the only one.
Jim Fried: What is it that you’re doing so that I don’t have to take Cialis?
Shivank Bhatia: So what we are doing, the procedure is called prostate embolization, and what essentially embolization means is you are reducing or essentially cutting off a blood supply to the organ. It’s minimally invasive, kind of a non-surgical procedure which is performed on outpatient basis in interventional radiology suite at The University of Miami. And in this procedure we put a small catheter of a tube through the artery in the groin and it goes into the blood supply of the prostate gland. Once we are there, we can form the position and we inject some small spherical PVA or polyvinyl alcohol particles and what that does is it essentially cuts of the blood supply and it causes the prostate gland to shrink in size. So we are essentially reversing the cycle.
Jim Fried: Yeah, but that sounds a lot less painful than the first thing you said. Is the person still at least some or to sleep while you’re doing this?
Shivank Bhatia: There is like a twilight.
Jim Fried: I’ve had the twilight things you don’t remember.
Shivank Bhatia: Yeah, pretty much. It’s essentially a painless procedure.
Jim Fried: Great.
Shivank Bhatia: The prostate gland reduces in size like 30-40% from the baseline and patients usually notice significantly better voiding with no straining and much better quality of life within 2-3 weeks after the procedure and we usually take patients off the medications at around 4 weeks after the procedure and of course it does not come with any side effects of surgery.
Jim Fried: That was my question.
Shivank Bhatia: There is no incontinence, no bleeding, no sexual dysfunction, none of the side effects.
Jim Fried: Sounds to me like you’re what every guy that has got this issue have been waiting for because you look at those commercials and you go:”Oh my God, I hope that’s not me”.
Shivank Bhatia: Correct. It’s like a breakthrough, which is-
Jim Fried: Good, because I said it was a breakthrough, so I’m glad you backed me up on that.
Shivank Bhatia: Yup, thank you.
Jim Fried: No, no listen we’re so thrilled to have you. You know, I get on the phone on the thing I talk about, UHealth has breakthrough medicine, it’s collaborative care. Well, here it is, you made a breakthrough, you’ve got funded for study a while back, right?
Shivank Bhatia: Correct. We have still active at the enrolling for this multi-center trial. And we are one of the leading sites for an FDA approved clinical trial where The University of Miami is still enrolling the patients for the trial.
Jim Fried: So wait a minute now. People can call in and get to be part of this – okay, what’s the phone number and we got to go slow and say it a couple times and I want to kill a little time so people get pens. Guys, get your pencil ready! Did I really just say that? Okay, doctor, everybody has got their pencil ready, what are the numbers?
Shivank Bhatia: The number is 305-243-3404. And you can ask for Leah.
Jim Fried: Okay. And doctor, one more time, this is all done at the central campus down at UHealth?
Shivank Bhatia: Correct. This is all done here down at the central campus.
Jim Fried: Okay. Well, I want to go over if somebody may have tuned in late, there is a bunch of different procedures that you can get for a prostate problem but a lot of them have side effects. Doctor, yours doesn’t. We’ve got a minute left. If you can go through it one more time, so that the people who are listening that just tuned in could hear again, what makes you different?
Shivank Bhatia: Absolutely. Thank you. So this procedure is, again, done by an interventional radiologist at UHealth and it’s called prostate embolization where we go in from a very small incision in the groin and under emerging or extra guidance. We put a small tube into the vessel or the blood supply of the prostate gland and we inject innumerable tiny bits into the prostate gland or micro-spheres. And what that does is it shrinks the prostate gland by 30-40% in size and most patients report significantly better voiding and much better quality of life within as early as 2 weeks after the procedure with virtually almost no side effects. What they usually feel is some amount of burning after the procedure for first week but that’s pretty much it.
Jim Fried: Listen. I’m going to translate it into guy talk, everybody. If you’re having a problem with peeing a lot, or not peeing enough, or any issues, go see these people, because you don’t know what’s going on. It could be a tumor, it could be something worse, you don’t know, an infection. But the number one thing is get it checked out because early treatment gives you the best chance for an outcome and you heard the doctor say it. He works at UHealth consulting and with breakthrough medicine. Dr Bhatia, you’re the definition of what the Goldschmidts are trying to do over there.
Shivank Bhatia: Thank you so much, I really appreciate that. One more time, I would like to repeat the number.
Jim Fried: Two more times, because, remember, the Jets fans write slowly. So guys, get your writing implement out, get ready to write this down, most important number for you and your family. Go, doc!
Shivank Bhatia: 305-243-3404
Jim Fried: Dr Shivank Bhatia.
Shivank Bhatia: Correct.
Jim Fried: Thank you.
Shivank Bhatia: You can search on the web for prostate embolization South Florida.
Jim Fried: Oh yeah, prostate artery embolization South Florida UHealth leads in that. Doctor, thank you so much for bringing this to our show. I look forward to meeting you socially, hopefully not professionally.
Shivank Bhatia: Thank you so much. I appreciate the opportunity.
Jim Fried: Thanks for having a great sense of humor. This was a great segment, I really appreciate you coming on.
Shivank Bhatia: Absolutely. Thank you.
Jim Fried: It’s my pleasure. Okay, guys, we’ll be back after this. Ladies too. We’re going to talk about how to bring water to the desert. We’ll be back after this with my friend Uri Man talking about Crystal Lagoons. Back after this.[commercial break]
Jim Fried: We’re back. We’re back with my good friend Uri Man. He is the new CEO of The United States for Crystal Lagoons and when you hear about what Uri is doing, you’re going to want to have one of these in your backyard. Welcome to the show, Uri!
Uri Man: Thanks for having me, Jim. Great to be here.
Jim Fried: Alright, man. Now listen, Crystal Lagoons is a great name, I think it really kind of says what it is but why don’t you tell everybody what we’re talking about?
Uri Man: Okay. Crystal Lagoons enables developing companies to create unlimited size crystal clear lagoons of never before proportions at a very low cost which are very affordable to maintain.
Jim Fried: Wait a minute then. So what you’re telling me is that all of a sudden I’ve got a beach in the middle of a desert?
Uri Man: Yes. Our company is effectively revolutionizing real estate development because now you can bring idyllic beach life anywhere in the world. It’s pretty incredible.
Jim Fried: So, this started out in Chile 20 years ago. How many of these have been done since then?
Uri Man: We now participate in 300 projects in 60 countries.
Jim Fried: How many?
Uri Man: 300, over 300 actually. In the US we have more than 35 projects on a negotiation and we’ve already announced 8 done deals most of which are here in Florida.
Jim Fried: Wait. Florida has got beach front. So this can’t really be on a coast so is this like turning Doral into Doral Beach in something in Orlando?
Uri Man: We have projects all over the state. Some of them are on the water actually. We have 2 lagoons with project called Sole Mia which is being developed by the LeFrak family and by the Soffer family. But you’re right, our lagoons can be anywhere in the state. We have projects in the Tampa area, 4 single family communities which are being developed by Metro Development Group. We also have a project in Orlando with Tavistock at Lake Nona.
Jim Fried: Like my friend Skipper Peek.
Uri Man: Yeah, that’s right.
Jim Fried: He’s the man.
Uri Man: Yes.
Jim Fried: So, Uri, you pique my interest with your deal at the project in North Miami with LeFrak and the Soffers. Then land under there has been in remediation for year and it was a super fun site so your stuff must be pretty durable to be able to be put into a system like that.
Uri Man: You’re absolutely correct. What’s interesting about our amenity is that it provides the ability to reposition sites in many cases taking non-viable sites and turning them into viable sites. For example, you could have a piece of property that is further away from the urban boundary or further away from the path of growth and you bring our lagoon and people will come, buy unites because they have effectively beachfront property which is really amazing in a sense that you can increase prices, you can increase absorption for projects and really create the idyllic beach like anywhere revolutionizing the lifestyles of the people that are going to live there.
Jim Fried: It sounds to me like you got the ultimate value out there where somebody can come in, buy a brown field or something out in the middle of nowhere and then, all of a sudden, they call you up and. gosh I got to believe this, sometimes the multiples are almost infinite.
Uri Man: Yep. Because that’s actually the case. We have some projects where they’re just looking to use the amenity to turn sort of an A- project into an A+ but many of our projects that developers are looking for lower cost sites and really without the lagoon they wouldn’t be viable.
Jim Fried: We’re calling it a lagoon. And we’re talking about making a water front. But this is really something where the kids can do swimming, dad can go scuba-diving and you can have your canoe or your sailboat on this.
Uri Man: Absolutely. They’re fully recreational which means they’re rated for full-body contact. If the water that is put into lagoon is drinkable, we continue to keep it drinkable. It can be any kind of water actually, salt water, fresh water, brackish water, well water. But the lagoons are used primarily for recreational use. The people are enjoying water sports like sailboating, pedalboating, which is very popular today, kayaking. There’re so many different ways to amenitize the lagoons and really provide a lot of value in lifestyle to development said that couldn’t be capable without our technology.
Jim Fried: It sounds to me like you should really call it Millennials Lagoons because it sounds like every active person in America is going to want to live in one of these things.
Uri Man: Yeah, the Millennials love them but also the seniors like yourself. We have senior housing resorts that are interested in the lagoon because they increase visitation. The grandparents want their kids and grandkids to come visit them. And nothing is better than having a beautiful lagoon that the grandkids can come swimming in and go kayaking and pedalboating at safe place for everybody to enjoy beautiful environment.
Jim Fried: I’m going to forget the fact that you referred to me as a senior. I got another year before I qualify for senior housing project so give me a break, Uri.
Uri Man: Yeah, I give you a break.
Jim Fried: Thank you so much. Come back in another 6 months and you can beat on me some more about it. In fact, you should anyway so we can hear about the update on all those projects like in Orlando and Tampa. Drilling down on this a little more, Uri, how big of a land area do you need for one of these to be viable?
Uri Man: Typically the lagoons that are being contracted today by the master plan developers are in the range of 5 to 10 acres but we are developing projects in the US so they’d be much larger. They can be as small as 2 acres or even smaller in urban situations. Our lagoons will always be cheaper to build and cheaper to maintain than a pool, for example. So they make sense for big diverse set of projects.
Jim Fried: Does this use mechanized filtration system or is it sort of a natural or when you use a big word osmosis kind of thing?
Uri Man: Neither. That’s a great question. Our technology is based on two important things: 1 – rather than keeping a high chlorine barrier like a pool does, we have an injection system which is extremely efficient. So it’s very smart, rather than keeping a tremendous amount of chemicals in a pool. We’re pulsing just where they’re needed which is a smart system using wi-fi and telemetry and 2 – rather than having a pool filtration equipment which is extremely expensive if takes a ton of energy, what we do is we use a very efficient ultrasonic filtration system which pushes all dirt through the lagoon to a central location where it collects, falls to the floor and then we have a suction car thing like a giant Zamboni that drives around the lagoon suturing only the bottom 1% of the water. Amazing.
Jim Fried: Has anybody heard me like ”gas has been say amazing here?” and you know, Uri, I heard your original presentation a number of years ago at one of the private equity conferences. And I don’t want to say that I dismissed it but I didn’t really focus on it. And now that I’ve seen it as an idea in currency over the past 4 years really coming to the forefront, and now they’ve got a person that’s a CEO like you, a real active, hard-charging, real young guy, I think they’re really poised for some significant growth that people want to find out more about this. How do they find you guys?
Uri Man: We have a website, of course crystal-lagoons.com. You make a great point because this technology we introduced to the US just a few years ago, our founder Mr. Fernando Fischman is considered a bright mind that’s equivalent to Steve Jobs. People come to Steve Jobs to South America because these lagoons are being used not only for recreational use but also for industrial use. There’re many applications. For example, for cooling off term electrical plants, for preparation of water for desalinization, for cooling systems HVAC. There’re many different applications these lagoons are being used for today.
Jim Fried: Do you go out and meet the developers and direct solicit them? How does that work?
Uri Man: We don’t do any advertising but mostly it’s word of mouth, many developers have come to us. We’re the only company in the world that can provide the service today. Our technology is patented in 160 countries. So if the developers want a large body of water and they want it to be built affordably and maintained affordably, they’re coming to us first because there isn’t anyone else in the market that can do it today. We do visit the developers at their offices as well, we do some road shows in different cities and that’s been very successful. We’re focused really on several states, Hawaii, California, Arizona, Texas, Nevada and Florida.
Jim Fried: Okay. Again, if people want to get more information, it’s crystallagoons.com?
Uri Man: Yeah, crystal-lagoons.com and they can also look me up on LinkedIn and my phone number. They can reach me directly at 561-213-9696 or to come directly to me if they’d like to reach me and speak about Crystal Lagoons.
Jim Fried: Alright. Uri Man, CEO of the United States for Crystal Lagoons. Thanks so much for coming in and teaching our audience about this fantastic new product.
Uri Man: It’s been a pleasure. Thanks for having me, Jim.
Jim Fried: It’s my pleasure. We’ll be right back after this. D, take it away!
Jim Fried: I want to thank everybody. UHealth, KIND Snacks, CCIM, Warren Henry, the Miami Marlins, the Miami Dolphins, South Florida Business and Wealth Magazine, EarlyShares, Xpresso Content Cafe, Social Media 305, the NFL Alumni Association, Lauren’s Kids, Magnum Energy Solutions, and the Bergstrom Center for Real Estate Studies.