Episode 368: 05-12-16
On this week’s show, Don Weidenfeld of Magnum Energy Solutions shares how going green can save you money, our UHealth special guest Dr. Scott Brown discusses the impact green neighborhoods have on your long-term wellness, DJ Van Keuren discusses family office investing in real estate, and Jim gives us an update on Vivian Fried’s quest for a kidney transplant donor.
Go Green
Don Weidenfeld, Managing Member at Magnum Energy Solutions, talks about how to modify your building to save money and pay for it through green energy tax credits. Weidenfeld explains how to save up to 40% on your commercial real estate operating expenses and take that right to the bottom line. Hotels, student housing and other types of properties benefit from his technology.
We discuss how going green saves you money!
Family Office Real Estate
DJ Van Keuren is Director – Family Office Capital – for The Arsenault Family Office. As a family office, they have over 30 years of experience in contrarian, value add and opportunistic real estate investing producing a gross IRR of 32% on over 200 deals since 1998. Individually, Van Keuren has more than 25 years’ experience in this sector.
Van Keuren is the author of “Real Estate Investing for Family Offices”, founder of usfamilyofficerealestate.com, is the past President of the Harvard Real Estate Alumni Organization and Board Member for the Real Estate Academic Initiative at Harvard.
His family was part of the worst real estate investing decision in American history – hundreds of years ago – I will ask him about it. Make sure to listen!
We discuss family office investing in the real estate sector.
Green Neighborhoods Keep You Healthy
Our UHealth special guest, Dr. Scott Brown, is a researcher at the University of Miami Miller School of Medicine’s Department of Public Health Sciences and the University of Miami School of Architecture. His new study of a quarter-million Miami-Dade County Medicare beneficiaries showed that higher levels of neighborhood greenness, including trees, grass and other vegetation, were linked to a significant reduction in the rate of chronic illnesses, particularly in low- to middle-income neighborhoods.
We discuss the impact a green neighborhood has on your long-term wellness.
Vivian Fried Kidney Transplant Update
We give an update on Vivian Fried. You can donate to her kidney transplant fund by clicking here: http://bit.ly/Donate2Vivian.
To become a member of the Vivian Fried Fundraising Team, click here: http://bit.ly/BeAVIVIANFundraiser.
THANK YOU!
Episode 368: 05-12-16
Transcription:
Jim Fried: All right South Florida, we have got a great show for you today. We’re going to talk about green energy with Don Weidenfeld from Magnum Energy Solutions. We’re going to talk about whether a good green neighborhood can help you live longer and the answer’s yes. We’re going to find out all the particulars and we’re also going to talk family office real estate with the Arsenault Family Office. We’re going to have a great show for you, lots of information you can use today and yes, we’re going to talk about what’s going on with Vivian’s kidney transplant. I want to say a special shout out to our friends in Austin. And we’ll talk more about what’s going on with Vivian and her transplant and our new efforts to help Vivian find the kidney and pay for her transplant. So stick with us, we’re going to have great energy, you’re going to love it, we’re going to have a super show, we’re going to get started with my favorite song. AC, it’s yours.
[commercial break]
Jim Fried: We are on and we are here. We’re going to talk with Don Weidenfeld. Don’s a Managing Director at Magnum Energy Solutions. He’s also an owner. Don, welcome back to the show.
Don Weidenfeld: Thank you very much, Jim. I appreciate that.
Jim Fried: It’s my absolute pleasure. Listen, we love having you guys. And before we get started, I wanted to first of all thank you for being part of the team with Vivian. I want to really thank you very much for being involved with us and really taking the time to get involved and help Vivian. We’re going to talk a little bit after this with you about what’s been going on with Vivian, maybe you’d want to stick with us and add your two cents. But thank you so much for being involved.
Don Weidenfeld: Our pleasure.
Jim Fried: Now, tell me a little bit about what’s going on with Magnum. We’ve got the summer coming up, people are turning down their thermostats in their hotel rooms and dorm rooms. What can you do to help me save money on my properties?
Don Weidenfeld: Magnum has a number of different products can help that but first and foremost in the HVAC industry, the air conditioning industry, we have occupancy sensors that are battery-less and wireless that can be placed in different hotel rooms, office spaces and what not, and control temperatures of your air conditioning in conjunction with your thermostat. So if there’s an occupant in the room, it’ll push the thermostat to a regulated 72 degrees, when the occupant leaves it automatically pushes it out to let’s say 77, 78 degrees and it reduces your energy consumption by between 25 and 40%. In addition to that, we have lighting nodes that would come out in conjunction with Phillips lighting and number of other lighting companies that we have the same occupancy nodes that are built in to your LED lighting fixtures in the ceiling. So you can install the lighting fixtures with our nodes and that will reduce the consumption as well on the LED side.
Jim Fried: I know that you’re also in your other life a wealth manager, you work with a lot of high end people, you help them with their residential stuff too. Does some of your products work in some of these high end residential condos and apartments and even single family homes?
Don Weidenfeld: 100%. Single family homes, multi-family homes, office, hotels, universities. We do a number of single family homes and the matter of fact I have it in my single family home. It shows my entire house, I know when there’s an occupant in any room in the house and whether it’s on the first floor, second floor, it can turn off different zones of air conditioning.
Jim Fried: So then this is something you use every day and it keeps your home comfortable and when you come back it’s still.. that’s a good question, we talk Miami, you have your air conditioning in your home turn to 77, 78 degrees, now you’re getting off 95, you’re going to be home in five minutes, what can I do on my cell phone?
Don Weidenfeld: Everything we have is communicated through Wi-fi and then everything goes right to your cell phone. We do restaurants as well and office spaces and hotels and what not and in addition to your residential homes and your condos, you can control and override the occupancy sensors, push the air conditioning down to the temperature that you want before you arrive home.
Jim Fried: This is not only an economic solution, it’s a lifestyle.
Don Weidenfeld: Correct. And it’s also a safety factor as well on the lighting because we can turn the lights on and off before we arrive home. So if you’re coming home late at night you can arrive home and turn your front lights on and turn lights on in your house and what not and literally just control the entire home through your mobile phone.
Jim Fried: Can I get this kind of system from home depot or do I got to work specially with an installer? How does it work?
Don Weidenfeld: Our equipment is 100% battery-less and wireless. A lot of our competitors have wireless systems but you have to change the batteries which in some of the universities that we’ve installed we have 22,000 points of control. You can literally see where changing batteries will be a complete nightmare. Our devices are all controlled by light harvesting chips so they have solar panels on them with light harvesting chips. And that means they’re completely controlled and charged on their own and therefore there’s really no maintenance, no batteries, it can be installed by anybody. Even you, Jim.
Jim Fried: Wait a minute now. That’s pushing it a little, Don. That, if I put on a tool belt I get a rash and if I hold a screwdriver it really cramps my hand. That’s why I call people that you know to help me install. You work with a whole bunch of contractors, don’t you?
Don Weidenfeld: Sure, absolutely. We work with contractors all over the country for more sophisticated systems. We also, all of our wireless controls can go back into the building automation system either through our software or direct through our E-box and we’ve installed probably 14 hotels in California alone in the past months just because the utilities are paying for 90% of our installation costs. So it’s a very reliable, easy to install system with no maintenance and the your ROI and the costs are less than 14 months without a subsidy for many of your utilities.
Jim Fried: That’s an interesting thing. You talk about the subsidy from the utilities. You just kind of threw that in there. Let’s say I’m a commercial developer, I’m building some homes, doing a 100, 150 homes, I want to use your systems, how does that work?
Don Weidenfeld: The subsidies in Florida from the utilities are not as aggressive as other states like New York or California. California is about 90% of our installations but what we can do in Florida in conjunction with the partners that we have which is Engineered Tax Services. We can get 159 tax credits. So even if you’re not getting the subsidy from the utility, we can get tax credits from the government because now you’ve got an energy saving space. And in a lot of your commercial spaces that savings can be as high as $1.80/square foot as a tax credit and therefore it can pay for the system almost in its entirely.
Jim Fried: That’s awesome. We talked about some of the different property types. But I know that you’ve done this for instance in Julio’s office building you did this, and Julio immediately saw savings. So how quick does it, I guess that the payback starts the minute that I flip – I got to just say it – flip the switch.
Don Weidenfeld: Without a doubt. The payback is immediate to pay for the entire system without any subsidies. You’re looking at 14 roughly, anywhere between 12 and let’s say 15 months depending on how extensive the system you want to put in. But if you add some of the tax credits in there your paybacks are literally in a matter of months or in reference to California 100% payback is in four months. But one of the things that a lot of these.. you approach the engineers or the building with the system or the head of engineering and they don’t really look at the actual translation of the energy savings into the increase value of the property. You and I both know that properties trade on 5-7% cap rate and if I can reduce the expenses, the energy costs by between 25 and 40%, if we’re changing the LED lights as well we could be upwards of 60-70%.
Jim Fried: Why isn’t everybody doing this? What is the objection that somebody has to this?
Don Weidenfeld: It’s actually very interesting. I was with a construction company yesterday that does $2 billion worth of construction and they were telling me that the entire wave of movement into the new construction and into the technology area and it’s automation and what not, it’s just the construction industry has always been slow to respond and now they’re starting to have to respond in order to compete with the properties that are right next door. Because my property let’s say is energy efficient and you’re charging X amount of rent and the property next door is not energy efficient, their total operating costs are going to be significantly higher, whose space is going to get rented? That’s number one. Whose building is going to increase in value exponentially because at a 5 cap rate, that what we save of every line-item dollar, you’re saving a minimum of ten times that money, increase, I’m sorry, not save, increase in the value of the property.
Jim Fried: It’s just a no brainer to me. Don, if people want to get information on your All-American-USA invented and built systems, we forgot to talk about that, how do they get a hold of you, bud?
Don Weidenfeld: You can reach me locally at 561 702 9000 and I can discuss anything that you would like, any kind of vertical. We do have locations all over the country and the main office obviously as Jim just mentioned is in Ohio with the manufacturing but again we have offices here in Florida in Boca Raton and all up to East Coast and West Coast of the United States. So again, the number is 561 702 9000. If you’d like to visit the website, it’s www.magnumenergysolutions.com.
Jim Fried: I want to thank you first of all for keeping jobs in America and helping America stay great and I want to thank you for just bringing a whole new lifestyle to the people that you don’t even need and helping America like I said stay great and being energy independent. Don Weidenfeld, one of the greatest guys. And again, Don, thanks for being part of the ”Save Vivian Fried Committee”, I really appreciate it.
Don Weidenfeld: My pleasure, Jim. And I hope she gets that transplant and that donor and anything we can do to help you is absolutely our pleasure.
Jim Fried: Your love and your personal strength is what keeps us going. Don Weidenfeld, Magnum Energy Solutions. We’re going to be right back, I want to pick up on while we were talking about, I’m going to give everybody an update on how Vivian’s transplant things is going. AC, thank you for playing this upbeat song. Great information you can use. Right after this.
[commercial break]
Jim Fried: We are back and I want to thank again Don Weidenfeld. He’s back on the line with us. Don is from Magnum Energy Solutions where he’s the managing director. He’s also one of the principle sponsors of the ”Let’s get Vivian healthy, get her a transplant” fund. Don, welcome back.
Don Weidenfeld: Thank you very much, Jim. Always enjoyed being on the show.
Jim Fried: You’re the greatest. I want to talk a little bit about what’s going on with Vivian. Again, I want to thank you, Harvey and the rest of the team that you brought to the table for helping us fundraise. But what’s going on with Vivian, has there been a couple of set backs-
Don Weidenfeld: I’d really like to understand a little bit more. I thought she had a donor about six months ago.
Jim Fried: Yes. We had one donor, the one donor stepped away. She decided to go in a different direction. But that’s okay, we love her anyway. But we wasted 18 months, we found another donor about six months ago. That donor got tested at the University of Miami and was a perfect match. But then at the end there was a problem and we just couldn’t get her transplanted. She didn’t coincide with the protocol at UHealth. But we’re taking her at the University of Florida where we think we might be able to get her transplanted. But she just had another health problem so it’s slowing us down a little. I hope we’ll still get her up there in early June but also at the end of June we’ve got an appointment with Johns Hopkins. How the difference is, if I get my wife the transplant at the University of Miami here locally and the person’s local, it doesn’t really cost us a lot of money, I really do want to make good for the donor whoever that may end up being, if they miss work or have some expenses or short falls we want to help make it par for them. A net. That’s local. And by the way, we’ve got few different people getting tested but we could still use more if somebody’s willing to donate their kidney, they should go on at www.friedonbusiness.com. You can reach me, you can text me or email me rather jim@friedonbusiness.com. Also, at the top of the Fried on Business page www.friedonbusiness.com we’ve got the fund link. It shows Vivian, how you can get involved, how you can be a donor, now you can be a fundraiser and really not only this, Vivian’s had some setbacks too. She’s having some blood pressure stuff, she goes every single day to dialysis. In fact, when I get out of here, I go straight home, make sure her bed is ready and her room is ice cold because they make the blood 45 degrees when they’re putting it through that, that system to keep her blood pressure up. It’s just amazing, Don. And you and Faby and the boys and Julie that just keep us all totally supported. We can’t thank you guys enough. To me, it’s part of the whole value system that you guys have at Magnum.
Don Weidenfeld: It’s our pleasure once again. We’ll be here for you as long as you need us and obviously we’re always there for you as well. Keep up a good pace and I know you’ll get it all done correctly.
Jim Fried: 100%. We really appreciate it. We appreciate you being one of the first donors on the site, really one of the first material donors and for carrying the ball. When we get to the next phase and start bringing people on and having the e-mail expanded and getting social crowd funding I really appreciate that you’re going to come in, I know you got a great database, I know that some of your clients will get involved, the guy we talked to today on the phone. I’m sure he’s going to get involved because everybody you introduced me to is a lovely, beautiful person that just wants to bring their shiny light onto the world. Is he still with us?
Don Weidenfeld: Absolutely. I’m here, I’m just listening.
Jim Fried: Okay. And then, the real big thing is if I have problems and I got to go to Johns Hopkins with her, we’re on the list for Johns Hopkins but they’re out of network. Big fancy word. That means huge bills. I’m trying to raise $500,000. If I don’t raise that $500,000 we’ll do what we can. But if we raise $500,000 and we only use a few thousand, we’re going to donate it to indigent kidney people at these different hospitals because the hospitals have short falls of staffing and I really think that they need to get some programs on how to deal with the people that are going through the process because it’s very tough. And for somebody that has connections and capability like I do, it’s one thing. But somebody who’s indigent, who just go into the medical industrial complex, they need help, they need guidance. I want to be there. I want to make it a commitment for my wife and I to not just get a kidney transplant and leave, we want to be leaders in the kidney transplant procurement situation. We get these emails and they say ”Call this person” and they call the person, they’re making arrangements for kidneys. They have all these requests, they don’t have a single kidney. I want to educate people that you only need one kidney to live, that you can give the gift of life. There’s a woman that I work with at the Aztec office. She was born with one kidney. The woman teaches zumba for crying out loud. She’s got two kids, she’s just as strong as new rope, I guess is what we use to call it. She’s amazing. And so you only need one kidney, you can go out and give the gift of life, people go ”Jim, why haven’t you donated to Vivian?” – I’m old. I’m 55 years old now. I got high blood pressure from all this stuff that’s been going on, it’s a marker for a kidney problem so they’re not going to transplant me. It’s not happening with me. So I have to find somebody who’s gracious and good. And I’m going to tell you, I’ve had people that went to my Bar Mitzvah that have gotten tested, I had people that have been on the show that have gotten tested, I’ve had people we don’t know that have gotten tested. That includes people from as far away as Austin, Texas and Ohio. Nobody at Magnum plant yet. But in Ohio we’ve had people. You can go on Facebook page and see that they’re sharing our message in Tennessee, in California and Oregon. It’s beautiful, we’re getting the message out about kidney organ donation and giving the gift of life and Don, it’s all because we have the help and support of people like you. Because without the help of the people that are supporting us, give $5 and show Vivian you care. It lightens up her whole day. She shines, she goes through the list and says ”This person loves me and this person loves me”, it’s amazing what you can do to bring somebody back to life. If you go to www.friedonbusiness.com at the top of the page is the widget. It’ll tell you how to volunteer, how to donate, how to get involved, how to save the life of the love of my life, of the person that gives me strength. If you listen to the radio show, you feel the energy field that I project. The source of that energy is Vivian Fried. She loves me, she takes care of me, she kisses me when I’m down, she provides me with this strength to go on and when I’m not feeling good and I have to get up and go do something, I do what she does, I put one foot on the floor, then I put the next foot in front of the other and by the end of the day I have accomplished some amazing things. That is what Vivian Fried teaches me every day. And if you want to help Vivian Fried live, if you want to help her get the gift of life, then you just go to www.friedonbusiness.com and join people like Don and Harvey Weidenfeld, people like Scott and Debbie Robbins, people like people I don’t even know, Beth Azor, Tad Schwartz, these are paragons of good energy. People that just give love. I’m just saying this off the top of my head. Beautiful people that I don’t even know are giving the gift of life and it’s with the leadership of people like you, Don. I’ve got to thank you from the bottom of my heart. God bless you.
Don Weidenfeld: As you know, it’s always our pleasure and we’ll do whatever we can to help you and help Vivian through this process. It’s not an easy situation, probably the toughest thing anybody can ever imagine through their lifetime and we’re happy to help, we’re happy to spread the word. It’s really nice to see that you had tens of, hundred donations already. So everybody will chip in. We’ll help you get through this and it’ll work out great at the end.
Jim Fried: I love you. I’m just saying that the whole world can know. I don’t give a damn. Don, my former room mate, my business partner, one of the strength and pillars of my life, thanks for being the sponsor of the show. Thanks for helping me with Vivian and God bless you, I’m so glad you found such beautiful happiness with Faby.
Don Weidenfeld: Thank you Jim. Stay strong.
Jim Fried: I will. I love you. We’re going to be back. Our next segment is going to be with the University of Miami UHealth doctors and architecture department. We’re going to talk about how your environment, when it’s positive can help you live longer. What a surprise. AC, take it away. I love this.
[commercial break]
Jim Fried: When James Brown feels nice like sugar and spice James Fried knows it’s time to restart the program. And do we have a great guest now. In fact, I’m really interested in this personally. We’ve got Dr. Scott Brown here. He’s a PhD, he works at the University of Miami Miller School of Medicine as a researcher in the Department of Public Health Sciences. He also works with University of Miami School of Architecture. And now I’ve talked too long. We’ve got to bring Dr. Brown on the show. I like that actually. Dr. Brown, how are you doing?
Scott Brown: I’m doing great, Jim. How are you tonight?
Jim Fried: I’m doing super. I just got to say it, Dr. Brown, do people come up to you and ask you for a cream soda occasionally? Maybe some celery juice?
Scott Brown: Sometimes they ask for a cherry soda.
Jim Fried: My mom likes diet black cherry. You’re the best. Thanks for playing along. Now listen, there’s been a lot of senior affordable housing, government subsidized housing that’s been built in the urban core of Miami. My mom who’s 77 is still an active social worker at another hospital at the weekends, we won’t mention where, lives in a very green grassy condo up by the county line. What are the differences in experiences somebody that would live in Downtown and in urban – I’ll just say it – jungle with no grass versus somebody with a pool, a lake, beautiful trees and grass? What is the different impacts?
Scott Brown: We just conducted a study looking at the relationship of greenness to health at a quarter million residence of Miami Dade County. We specifically focused on Medicare beneficiary, it’s a group of individuals over age 65 that come to largest healthcare plan for older adults in the country. And we actually found that when we looked at the level of greenness from NASA satellite imagery we found that areas of Miami Dade County that had more green such as trees or grass or other types of vegetation actually had better health outcomes among residents.
Jim Fried: What I’ve noticed is people say that green space is disappearing. How about blue space, the ability to see the sky, as the buildings get closer, as people start looking at the person next door to them? What’s the impact?
Scott Brown: There’s been number of studies looking at just having a view of nature, in fact there was a paper published by Ulrich in 1984 in the journal Science that showed simply having a view of nature such as trees or shrubbery or a blue sky was associated with significantly faster recovery from gall bladder surgery. Looked at ten years worth of hospital records and so people who had a view from their hospital room, a brick wall needed more pain medication and spent about half a day longer on average in the hospital. So it seems to be there’s something biologically in our nature that has evolved to benefits from even just having a view of nature let alone the ability to engage in physical activities or social interaction in areas such as parks or green spaces.
Jim Fried: I’m going to come out here and I’m going to just tell you that I love to nurture the orchids that sort of die inside of our house and I throw them out on the balcony with the trees that I have out there. Not a lot of people have a green balcony, I have a green balcony. Anybody can look on Facebook and see what I’ve got now on my balcony. You know what? I nurture those things like my kids and I live with them and I love them and when they go, it breaks my heart and then I nurture them and try to do something even better than next year. It makes me feel terrific.
Scott Brown: That’s wonderful. In fact, there have been studies showing that having a plant to take care of in a nursing home yields benefits for health and well-being over and beyond having let’s say a nurse take care of the plant for you. There seems to be something restorative about greenness and interacting with nature for health and well-being.
Jim Fried: I feel the love. I give the plant love. The plant responds. It absolutely makes total sense to me. When they booked you for my show, I just loved it because I just believe in everything that your study found. In fact, I agree completely with – and I never get her name right – Dr. Plantorzyba- you know who I mean. Thank you. The architecture professor who, I don’t like all the things she does but her green space ideas, this town really needs to follow through. I’ve seen all of the trees cut. I look from my office and my favorite thing to do in June and July is look at the Royal Poincianas and they’re an endangered species here.
Scott Brown: Yes. We certainly have to take better care of the environment here and to the extent that we have more tree cover that can provide opportunities to walk during the hot summer months.
Jim Fried: Doctor? Your phone squelched on us. We didn’t hear much but I think what you said was that having a green canopy over promenades helps everybody get where they’re going a little more comfortably and I got to believe a little happier too.
Scott Brown: Absolutely.
Jim Fried: Listen, how do people find out more of your research or get a hold of your research so they can incorporate it into their lifestyle and their planning process?
Scott Brown: You could Google myself, Dr. Scott Brown at the University of Miami and also my article on neighborhood greenness and health is currently online at the American Journal of Preventive Medicine and I can provide an e-mail address: sbrown@med.miami.edu.
Jim Fried: Before we go, I want to give a shout out to Dr. Lombard too, the architectural person, the person from the Department of Architecture that helps you out on this. Well done to both of you. Thank you for working hard to keep Miami green and make it a better, more accepting place for all of us.
Scott Brown: Yes, and we’d also like to give one last shout out as well to Maria Nardi and Jack Hartis from the Miami Dade Parks, Recreation and Open Spaces Department who have been working with us in this area of research and who would like to build on their successes in parks and open spaces and green areas to promote the health and well-being of Miami Dade County’s 2.6 million residents.
Jim Fried: We’re on that. We’re going to get some folks that are going to be here that are going to talk about the green way, we’re going to talk about the bike pass, we’re going to start making this a healthy place. Dr. Brown, thank you so much and I won’t even mention that I really just wanted a diet cream soda. You take care.
Scott Brown: All right. Thank you Jim.
Jim Fried: Thanks for being here. We’ll be right back. We’ve got some great information. We’re going to talk family offices in real estate. You’re going to hear from one of the oldest and deepest family offices and the guy on the show, his family made a big mistake. A few hundred years ago, we’ll talk about that too. Back after this. AC, keep it fun. New type of music. Roll it at me.
[commercial break]
Jim Fried: We are back and we are on and while I’ve been off on the break I’ve been texting one of the people that’s working hard to see if she can be a donor for my wife. I want to remind everybody, go to www.friedonbusiness.com. Up in the right hand corner we’ve got the widget, you can join our team, you can help Vivian and her fight for life and I want to welcome DJ Van Keuren. He’s the Director of The Arsenault Family Office. DJ is a good friend. He is the man when it comes to real estate and family offices. I got to just say it, DJ, you wrote the book. Welcome to the show.
DJ Van Keuren: Thanks Jim. Appreciate that. Glad to be here.
Jim Fried: Let’s talk a little bit about what the Arsenault Family Office is and how that gives you a perspective to talk real estate.
DJ Van Keuren: Sure. Our patriarch and the story I always tell is he sold a company about 30 years ago for about a million and he turned that into about 500 million and as a family office we’ve been through three different cycles. He’s averaged about 32% IRR since 1998 and closed 200 deals and it’s over 30 years, about 27. So we strictly focus all on real estate and we look at the real estate cycles and we’re within those cycles and then take advantage of those opportunities in the different asset classes.
Jim Fried: What is a family office and why would it focus on real estate? But I guess you kind of just told me. You got those jaw-dropping returns.
DJ Van Keuren: With a typical family office and some people say that there is a question of what’s really a family office, it typically happens when somebody has an exit in a business that they had. So for example, a family that I had met which was up in Georgia, they sell the chemical business for about $400 million and so they had quite a big cash come into their family and so now it’s a matter of allocate in that money. So just like yourself, myself, all the listeners, they have a finance advisor. A family office is basically the same type of, goes for the same type of investment strategies with the exception that they might be dealing with their personal plane that they have, typically their investments are directly into companies rather than maybe a fund. But real estate is a very important part of any type of allocation and it’s important for families just like the Harvard Endowment they’ve got about 15% or real estate and everybody should have some exposure to real estate to some degree especially family offices because of the amount of money that they do have that needs to be managed.
Jim Fried: This is where I throw you under the bus. Let’s talk about that business deal that your family flubbed a few hundred years ago. Tell people about that. It’s absolutely a fabulous story.
DJ Van Keuren: You’re never going to let me forget that, are you?
Jim Fried: I am not.
DJ Van Keuren: So I was doing some research on my family and come to find out the Island of Manhattan, so New York City was originally owned by the Native Americans until they sold it to the Dutch West Indies company who came over and they actually paid the equivalent of $24 in beads and trinkets. And one of the six directors that purchased the island of Manhattan was one of my relatives. So our family owned from 83rd all the way up to about 133rd East to West. And I used to live in New York, I started to calculate how much one block was which got to about a million dollars and I stopped but the moral of the story back to your question is he did end up losing it. So unfortunately we had it but we also lost it.
Jim Fried: Then let’s just talk for a second about what family should do in the real estate sector today.
DJ Van Keuren: I think there’s a couple of things. First and foremost, they definitely need to have exposure to real estate without a doubt. And one of the trends that are happening for family offices is that they’re actually partnering with other families and that’s on the premise that if somebody made all their wealth and widgets and you want to invest in widgets, it’s probably best to find a family that was successful doing that. So one of the best things that families can do is to find a family whether it’s our family or some other family that really created a wealth and try to partner next to them. That would be the first thing. Secondly, you do have to look at some of the thing that you’re looking to accomplish and that could be anywhere from do you want legacy assets that are going to go on forever for your family and your second generation, your third generation, your fourth generation. And that’s going to be a different type of asset like maybe a major building in Downtown Miami that’s always going to be there and go on forever compared to if they’re just looking to maximize those returns which might have a different philosophy which would be finding the building or investing into a property that might have a valued add opportunity, it needs to be fixed up and needs better management and then when that’s maximized, that’s sold and then you go on to the next building. So you definitely need the exposure, you need the expertise in some capacity or a professional that you can trust that can help you do that and then identify what do you really want to accomplish out of this type of investment whether it’s short term or long term. And that’s really a good place to start.
Jim Fried: DJ, we’ve got to run, we’ve only got a minute left. How do people get you on your website and find out about your book?
DJ Van Keuren: Sure. I created a website just for family offices strictly for education. You can to www.usfamilyofficerealestate.com. That’s www.usfamilyofficerealestate.com and there’s a tremendous amount of information including getting the book that I just wrote which was “Real Estate Investing for Family Offices”.
Jim Fried: DJ Van Keuren, thank you so much. Your family will get over the thing in Manhattan, I promise.
DJ Van Keuren: Well my wife won’t.
Jim Fried: I want to thank DJ, I want to thank Don Weidenfeld, I want to thank the folks at UHealth, I want to thank our sponsors: the Related Group, Spectrum Mortgage, UHealth, Warren Henry, Magnum Energy Solutions, Energy Tax Services, EarlyShares, KIND Snacks, the NFL Alumni Association, Bergstrom Center, the Miami Marlins, the CCIMs, South Florida Business and Wealth Magazine, Xpresso Marketing, Social Media 305 and Lauren’s Kids. I want to thank you our listeners. Go to our Facebook page, like our show, tell your friends, get involved in the ”Vivian for Life” campaign, join our community, give us feedback and comments, tell us who you want to hear from. @JimFried, @FriedonBusiness, Facebook, LinkedIn, Youtube, the website go to www.friedonbusiness.com and help Vivian Fried today. This is Jim Fried for Fried on Business. Look for us next week on 880 AM. Why? Because I love this. We’ll have branding guru Bruce Turkel on. Remember, this is not a rehearsal, this is your life. The person that wants to do something finds a way, the other finds an excuse. Now go out there and make it happen. Thank you everybody, thank you so much. Thank you AC, I love you AC. You made me sound great for so long. God bless.
