From Browns perspective, commercial real estate appears to be in decent shape. Existing deals are being honored, construction is continuing, and new leases are being signed. However, lack of consumer wealth is causing a decline in the number of new projects that he usually would see coming across his desk.
Ryan Morfin: Welcome to Non-Beta Alpha I’m Ryan Morfin. On today’s episode, we have Luke Brown from Brown Griffin Real Estate Advisers, a real estate developer located in Prosper, Texas. Luke just recovered from the coronavirus, and today he’s going to share his thoughts and his story with us for our viewers. This is Non-Beta Alpha.
Luke, the treatment that the doctors gave you, can you talk a little bit about what you did to combat the high fevers and the cough? Yeah,
Luke Brown: I was just using the NyQuil cough medicine, then I didn’t do anything. The only thing that helped was Tylenol. The Tylenol would really knock the fever down. I could tell when I was getting close to four hours because it would spike back up. So that’s really all that I had. He gave me an antibiotic, a Z-pack and I took that in three or four days. But I don’t know what it did or if it did anything, Tylenol was the only thing that helped.
Ryan Morfin: Interesting. Were you by yourself most of the time, kind of self quarantined?
Luke Brown: I was, yes.
Ryan Morfin: Did you end up having to go to the hospital at all? Or did you admit?
Luke Brown: I was never admitted. I just went and got my oxygen level taken and they said anything 92 or below, they would admit me. I was 94, 95, so they just sent me home.
Ryan Morfin: Oh, wow. So you’re right at that cusp there. So you were lucky to get the test turned around pretty quickly because you were probably early on here in Texas. As you were kind of getting towards the end of this, what were you thinking in terms of watching the news? I don’t know if you were watching the news or if you were sleeping it off, but what were your days like while you were at home by yourself?
Luke Brown: Like I said, the only thing that there’s any relief, when it was nice weather, I’d go sit outside and I’d take a long hot shower. It’s the only thing that really relieved the cough. Back in bed. Patio, shower, bed. I just did that for almost two weeks. I didn’t really keep up with a bunch of it on the news. It was on every channel, so I saw a little bit of it, but I didn’t pay a whole lot of attention to it during that time.
Ryan Morfin: Yeah. Did you lose your appetite or were you still eating or what was the…
Luke Brown: I lost my appetite. I ended up losing probably 16, 17 pounds, something like that. When I would eat, everything tasted super salty. I don’t know if that’s just being sick or what, but it was just a lot of Gatorade and stuff like that. Didn’t eat a whole lot.
Ryan Morfin: Were there any other unusual symptoms? Some people are saying they’ve got blisters on their feet or any other symptoms that you thought would have [inaudible 00:03:20]?
Luke Brown: A flu like fever where you just felt really sick and couldn’t get comfortable and the cough. The cough was the part that was… I couldn’t get rid of it. If I was awake, I was coughing. When that finally went away, I was very thankful. That was the worst for sure.
Ryan Morfin: So you lost about five or 10% of your body weight? The doctors basically were saying if you have under 92 score on your oxygen, come back in., But when they sent you home, did they give you things to watch out for to get your butt back into the hospital? Or what was the guidelines?
Luke Brown: When I pulled into the hospital, I just went to one here close to the house, but it was in Frisco. I was the only car in the parking lot. Now there was a parking garage I didn’t go into. I talked to the nurse, talked to the head lady before I came in. They knew I was coming and they were nice. But you could tell they did not want me there. I can check you in, but it’s going to be $500. There’s nothing we can do for you. Your oxygen’s up. I said that’s fine. So they just put the thing on my finger. I was there less than five minutes. They didn’t really take my name. I didn’t get checked into the hospital. They just kind of did me a favor and just said, “Come back, check your oxygen anytime you’re feeling like you can’t breathe.” But I was better probably three days later, I was fine or starting to get better.
Ryan Morfin: Were you able to drive yourself to the hospital or did you have to have someone pick you up?
Luke Brown: I drove. I drove.
Ryan Morfin: As you’re starting to come on the tail end of this and the outside and you’re feeling better, what has the guidance of the doctors given you about your ability to catch it again or when the contagiousness goes away? What kind of guidelines did they give you on the back end of this?
Luke Brown: My doctor or the doctor that I used and the lady from the county both said they didn’t know. My doctor assumed. He said, “I would assume you’re good at least through the summer of this cycle.” But they don’t know how it’s going to mutate or anything. He said, “I would assume you do, but there’s no test really yet.” He just didn’t know. That’s the part I’ve been trying to keep up on is can I get it again? Do they need plasma? I don’t think anyone really knows or they haven’t told us.
Ryan Morfin: Yeah, it’s still early. I think the CDC is still trying to get their arms around this as well. I mean, so were you at all frightened for your life, or do you think that the way your body was handling it, you felt pretty comfortable, but you knew you were sick? I mean, was there an inflection point on your thinking like, “Oh God, this is a really bad outcome.”
Luke Brown: I got to a point where it felt like it would never end and starting to just get mad rather than… Just wanted it to be over with. But I never felt like I was going to die. They kept saying if it gets in your lungs and you’re wheezing and you can’t catch your breath, that’s bad. I never got there.
Ryan Morfin: Thank God. Now you’re a pretty fit guy going into this and losing the weight, but being knocked out of commission for a few days, definitely is probably a shock to someone who probably doesn’t get sick very often.
As it relates to going back to work, I mean, what do you think? So you’re one of the folks you’ve actually had this and survived. What do you think the country should be doing, I think, going forward? Should we go back to work or do we need to continue the social distancing guidelines? What would you say for the outlook?
Luke Brown: I personally think it was the right thing shutting everything down because they didn’t know what was going on. They didn’t know how overwhelmed the hospitals would be. I felt like I didn’t go out. I washed my hands. I did all that. Stayed home and I still got it. I know people that had to work and worked through it and they’re just fine. So it seems random that I got it and a lot of other people didn’t.
But we’re in the development construction real estate business, and those projects are two or three years long. Those projects are still going. So we’re staying busy and working. It seems like there’s going to be some kind of middle ground of XYZ category that needs to stay home another 30 days and let’s see where that takes us. Then if that works, it seems to need to be phased out. I think cutting everyone lose to go to concerts and games would be a little reckless at this point, but it needs to be phased in. I mean, some people need to be able to go back to work that are less likely to get it, in my opinion.
Ryan Morfin: You’re a construction general contractor and an investor. How do you think now that you’ve had this personal experience, how do you plan to change kind of the operations or the tactical way you handle a construction site? I mean, you’re going to space people out further, work in greater shifts. What changes do you think you guys will be making as we go phase back into the economy? In Texas, construction hasn’t slowed down. It’s been going continuously through this whole process, but you’ve got a special optic on this because you had it and lived through it. How do you think your company will handle this going forward?
Luke Brown: Well, I think I could have done better personally in that four or five days before I got sick, I did have a cough and I still went into work. Like I said, we didn’t have office meetings or anything like that. I was never within 20 feet of anyone else. But I think if you’re sick or think you’re sick, you need to stay home. On the construction sites, they’re mostly all subbed out third party subs. So those companies run their own health the way they see fit. But construction’s a little bit different in that they’re not all on top of each other. It’s more of the people that are in direct contact that are in a difference boat than we are, I think.
Ryan Morfin: Given that you guys are very active in the real estate development space, how do you see the economic impact changing real estate from rolling from construction financing to permanent financing. Are the banks still active? Are you still talking to your banks? What kind of concessions or what are they doing for construction developers?
Luke Brown: Our banks have been great on working together. I mean, we’ve got some buildings that were just finished this month that are sitting there in shell condition. The leasing seems to be still going on. I think a lot of the people that have their business, any kid related business, boutiques, restaurant, bars, those kind of guys that got shut down or in a bind, but people who are looking to start new or seem to still be around were still getting offers for lease space and things like that.
Our brokerage side, we don’t have a whole lot of people looking for new land deals at the moment, but all of our construction projects, they’re still going forward. The leasing side seems to still be… New leasing seems to still be solid.
Ryan Morfin: I know this is a relatively fresh phenomenon, less than 60 plus days out. But do you think it’s going to be harder to get permanent financing to roll the construction off once you’ve finished these projects? Have you started to have those conversations with construction lenders?
Luke Brown: No. We don’t have any perm loans that haven’t already been negotiated into… I’m sorry, temporary loans that haven’t been negotiated for the permanent financing. We seem to be okay in our little bubble, but industry-wide, I really don’t know.
Ryan Morfin: Yeah. I think it’s perhaps too early to tell. People are still trying to get their arms wrapped around it.
Luke Brown: They don’t know head from tails or that bank is working 14 hours a day kind of deal just to keep up. So asking them future questions is just out of their brain space right now.
Ryan Morfin: Would you think it’s safe to say that there’s no new construction projects going to get kicked off in the next 90 days?
Luke Brown: We’ve got some that have just broken ground. I mean, they’re just doing the dirt work and those are all moving forward. I can’t say personally we have anything new that we’re going to or not going to start because of this in our company.
Ryan Morfin: Yeah. You guys are in one of the most active areas in the country for growth.
Luke Brown: [inaudible 00:12:22] talked to yesterday a bit runs a big GC. He’s a GC for a big company. He said they’ve had some stuff tabled that haven’t started, some tens of million, $80-90 million deals, not stopped. So there’s a little bit of it for sure.
Ryan Morfin: Have you continued self quarantine during this period of uncertainty or have you started to kind of reintegrate with family and friends and loved ones to try and get some support?
Luke Brown: I’m back with friends and kids and back at work and all that stuff.
Ryan Morfin: Well, I’ll tell you. Thank God you’re okay and we appreciate you joining us. I wanted to share with our viewers a good news story because the media is only talking about the death toll and the infection rate, but people are surviving this and coming out on the other side. I think it’s the unknown that is driving people to maybe act irrationally. We appreciate you joining us and sharing your story.
Luke Brown: You bet. Thanks for having me.
Ryan Morfin: Thanks, Luke. Good talking to you.
Luke Brown: Bye.
Ryan Morfin: Thanks for listening to Non-Beta Alpha. Before we go, please remember to subscribe and leave us a review on Apple Podcasts or our YouTube channel. This is Non-Beta Alpha. Now you know.
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