“real estate is a commodity, no different than gold, silver, copper, lumber, whatever you want.” Jordan Schnitzer · The Weekly Take from CBRE

Yes, absolutely. Absolutely. And look, we benefited plenty, but you can, I mean, when these cap rates got down to two and three-quarters, let's say in the industrial area, the CB industrial team, best in the business, they pushed a lot of these deals down, cap rates of two and three-quarter percent. Now, those buyers were lucky that industrial rents went up a lot more than I ever imagined. If I'd been that smart, I would have bought even more than I bought. So they actually didn't come out too badly, but none of us had the foresight to assume that rates would go up beyond the 3% or 4%. And industrial in the western states where we operate for that period of time from, let's say, 2014-15 to 2020, 21, they went up more like 7%, 8% a year. Rents went up 50, 60%. So it actually bailed out all those people that paid ridiculously low cap rates that with the marketplace made them look like they were pretty smart. But today, anyone assuming rates are going to go back down to 3% or 2.5%, I think is being wholly unrealistic. And if you're buying real estate on that kind of exit cap rate based on that kind of debt, then I think your investors aren't going to do very well.

I don't like cap rates. And the reason I don't like them is they tell you too much and they tell you too little in one number. Fair way to put it?

Jordan, I hate to disagree with you in your own house here, but I'm going to disagree with you. Part of the reason why I love commercial real estate, particularly your asset class, is it's not a commodity. I mean, when I say your asset class, I'll be a little specific. Jordan specializes in small bay industrial, used to be known as Flex. And you have thousands of tenants, not some, thousands. I think you said 4,500 tenants. For each of those tenants in your company, in your buildings, it's their company. It's their livelihood in those spaces. But you've got to manage them not like a commodity. You've got to manage them and say, this is the most important thing in the world to you. Now let's operate better so that not only are you making money, but we're making a fair trade.

Absolutely. What I meant by commodity is at the highest levels, day to day. It's interesting. Growing up, my father had a philosophy of some geographic diversification, buying things outside of Portland, and property type diversification. No different than probably a stock account today that people would talk about. So I grew up with apartments, some shopping centers, office. He never liked industrial. I did. Now where we're at is because of long-term succession and so forth. 83% of our portfolio is small bay and mid-bay industrial. And we have some bigger buildings too. I love all the asset classes. But in terms of decision-making, where I am in terms of my children, my ultimate foundation, and so forth, the industrial is where I think I'm so proud of our people. Without sounding braggy, I think we're best in class the way we operate our industrial. And I think people, the brokers all would say that about us. We treat our tenants royally and we appreciate every single one of them. So, no, the tenants are not a commodity. The real estate may be, but each of our assets, let me tell you philosophy. What I say to our staff is: look, with all of our investments, think about the community first. What is best for the community? And if you put the community first and do the right thing real estate-wise, it's always worked for us. For instance, I focus on sense of arrival with all our properties.

And this is sense of arrival at a flex industrial property that some people might say is gritty. Some might say it's manufacturing light. But sense of arrival is a concept you would see in office or you might see in condominiums. Is that a fair way to do