Forrest Fenn. Have you heard of him? He has all the makings of the swaggering hero of a Western novel. But this character is real. And his story has struck a chord with me.
For twenty years, the fanciful Fenn, an acclaimed Santa Fe art dealer with a penchant for celebrities, collected an astonishing array of rare treasures: gold coins, Ceylon sapphires, ancient Chinese carved-jade faces, and Alaskan gold nuggets the size of chicken eggs. He tucked away the collection, with a sevenfigure value , in an ornate bronze lockbox in his home, until five years ago, when . . .
Carrying out a plan he’d schemed since purchasing that chest, the 80-year-old Fenn took the 42-pound
treasure box to a secret location in the Rocky Mountains—and hid it. But not for himself—for anyone who
could find it. In fact, he’s left two clues, a poem in his limited edition book, The Thrill of the Chase (copies
starting at $100+) and a cryptic map in his newest book, Too Far to Walk. His enigmatic story has attracted
features in Newsweek, stories in The Huffington Post, and appearances on the Today show.
And still the treasure remains out there to be found.
If you like stories about eccentrics, non-conformists, celebrities, buried treasure and the wearied people who chase it, read this story and then come back to the commentary. Or even better, print both out, take them home, pour a drink and read on.
After reading the story I immediately identified with Katya Luce, one of the more dogged treasure hunters. She sold everything and moved from Hawaii to be closer to the treasure. She’s been on hundreds of trips and has yet to find anything. That’s how I feel right now.
One of my primary duties at Shannon Waltchack is to look for things to buy. The other three principals—Tim, Andrew, and Len—also share the same mission. Unfortunately, I’ve been on a seven-month dry streak. I haven’t found anything, nada. It’s like I’ve been sitting in a deer stand for the whole season, and I’ve only seen does and button-bucks.
Len, on the other hand, has been on a hot streak and it’s really starting to bug me. So I thought I’d use the opportunity of this commentary to enlist all of our readers to help me find our next real estate treasure.
To set the table, Shannon Waltchack’s portfolio is 50% retail, 40% office and medical office, and 10% other. We are currently looking for retail and office properties. Our equity sources are local investors, who come to us by word of mouth, and institutional equity.
Shannon Waltchack is not a publicly traded REIT nor are we coupon clippers desperately chasing yield. So we are not buyers of Walgreens NNN leases at a < 6% cap rate, and we’re not buying enclosed shopping malls.
We are at our best when we use our local market knowledge to find hidden value that others might not see or might not be set up to extract. Here are a few deal profiles we look for:
Long-term owner, low rents.
There was a time in downtown Homewood in the early 2000’s when rents took a big jump from low teens to the high teens per square foot. Many of the long-term owners didn’t adjust their rents accordingly. So we found sellers who would accept a premium price relative to their existing cash-flow. We were able to pay this premium because we knew we could push rents by 30% as the leases expired.
Lease term risk.
One of my favorite deals was the Winn-Dixie we bought in Cahaba Heights right in the middle of the recession. The tenant, at the time, was suspect and their lease only had 3.5 yrs left. The seller was out of Chicago and was highly fearful of owning a potentially empty building in Cahaba Heights. How many Chicagoans have heard of Cahaba Heights? We on the other hand felt comfortable with the building value, even if it was empty. Winn-Dixie later renewed and renovated the store and the rest is history.
Earlier this year we bought a retail center in Madison. As a term of the sale, we were required to also buy the seller’s excess property. Your average shopping center investor wouldn’t have looked at this deal because of the added complexity of the land. We saw the complexity as an opportunity to make a few more dollars because we were set up to handle that part of the transaction.
I give you those profiles to demonstrate how we think. When a broker asks me what we are looking for in deals, I tell them they are the ones they think, “I wish I could own part of that.” The broker knows that there’s upside in that deal, and oftentimes they aren’t set up to take advantage of it.
So, who can help me out? If you come across someone interested in selling, and you think it’s a deal that might make sense for us, give me a call 205-223-2607. If you want to own part of it with us, great, no problem!
For the next individual who shows me a deal we buy, I’ve got a copy of both The Thrill of the Chase and Too Far to Walk to help you get started hunting for your own treasure!
As for my dry streak, I’m sure it will break soon. But the title of Fenn’s book, The Thrill of the Chase, reminds me that it really is the pursuit that is the fun part. As Katya Luce describes a good quest, “the treasure is what you discover along the way.”
I hope you all have something that you’re pursuing that helps you get out of bed in the morning. If not, it’s
never too late to start.
One more for the road.
The commercial sales and leasing market in Birmingham is now ‘white hot’. One of our brokers commented that he has 15 listings for sale or lease in downtown Birmingham and has contracts or leases/loi’s under negotiation on 14 of the 15. It is most assuredly a Landlord’s market now. If we can help you sell, lease or look for your next property, we’d love to help.