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Retail Commercial Real Estate Investing With Paul Bartlett | The Real Estate Investing Club #4

Transcript of “Retail Commercial Real Estate Investing With Paul Bartlett”

Gabriel Petersen 0:00
And we are live. Paul, thank you for joining us. How you doing today?

Paul Bartlett 0:07
Great. How are things up in the northwest

Gabriel Petersen 0:10
here? They’re doing good we don’t don’t have the sun Have you down in California but we’re we’re hoping for it.

Unknown Speaker 0:17

Gabriel Petersen 0:19
All right to get us started, why don’t you tell us a little bit about yourself and about where you’re from and and how you got into real estate in first place?

Paul Bartlett 0:26
Yeah, so my name is Paul Bartlett and I’m here in Orange County, California. I started off my real estate career in 1989. coming straight out of Santa Clara University, I was heading back to my hometown of Reno to get into the banking industry but Ross dress for less reached out to the university. specifically looking for a student that had my background. I had had internships with Macy’s. Sears At the time there was Coldwell Banker commercial so this was pre care. So I have multiple internships both in retail and in commercial real estate. And Ross at the time in 89, was just gearing up their real estate expansion across the country. And there were staffing up in the real estate department and they were looking for a young go getter that was willing to learn the industry and learn the ins and outs of retail real estate. And so the day after graduating from Santa Clara, I went up and had a full day interview with Ross and several executives and at the end of the full day of interviews and touring the corporate campus, they offered me a job and I halted all all my move plans to Reno and started off in the retail real estate industry and the rest is history. The rest is history. Beautiful. Yeah.

Gabriel Petersen 2:06
So to kind of give everybody an idea, you’re unique to the show because your main focus is not in investing. But you are in real estate and commercial real estate and that which is which is very unique and very interesting, at least to me. So kind of tell people what is it that you do in real estate? What’s your focus and kind of how do you fit in the ecosphere? That is real estate.

Paul Bartlett 2:28
Got it. So, again, I started my career on the corporate side working for Ross dress for less started out honestly helping put together their research department helping them plan corporate expansion throughout the country, using what I learned at Santa Clara. I was in the Retail Management Institute there and there were a lot of great courses that I took that segue personal perfectly for kind of the real estate research within Ross, I helped develop their first sales forecasting model for new stores and work my way up after about five and a half years at Ross and was headhunted south from the Bay Area into southern California to work for another retailer by the name of pickin save, which ultimately is what we see today as big blocks. That role was also a bit research related sales forecasting, strategic planning, but also started segwaying into more of the transactional part of growing stores. So working with brokers working with with landlords and starting to help my internal real estate reps with their negotiation process on the deals that we were chasing throughout, at that time, kind of the middle of the country. After working there for a couple years, as mentioned, big blocks purchased, pick and save their headquarters or in Ohio, our headquarters were here in Southern California they decided to not relocate any personnel from Southern California to Ohio. So they shut down our entire corporate campus here in Southern California. Let everybody go. And I was out on the street and decided to roll the dice become more entrepreneurial, and ultimately found a home out the stock company founded by Roger Staubach Hall of Fame quarterback for the Dallas Cowboys, former Heisman winner at the Naval Academy and his his concept, the Starbuck company’s main business Was tenant representations, tenant representation, both in retail but also an office, industrial and tenant representation in that day and age was relieving all conflicts of interest, a lot of firms. Even today, our full service where you have brokers that specialize in landlord representation, and then also have some tenant representation as well. Roger Feld, whether you’re a retailer or an office user, if you are being represented by a full service firm that has listings, you may be steered. Or there may be some bias to steer the client into care or the firm’s own listings rather than showing the entire learn everything on the market. Yeah. And making the right decision and not being biased in any way. So I was hired again by Roger, in the Southern California office to work in a nice team of five people at the time representing a lot of clients. And this was so it’s essentially the mid 90s. At this point. Retail was growing rapidly with a lot of national chains throughout the country. And so our our tenant representation here in Southern California was back. We worked the Arizona markets, the Nevada markets, Utah, Oregon, Washington, Idaho, really all out of the Southern California office, and we will work with folks at the time growing so rapidly. Pier One imports, Barnes and Nobles.

Oh yeah.

linens and things, all sorts of National big roll out clients and large

Gabriel Petersen 7:03
chains. Yep,

Paul Bartlett 7:04
yeah, large chains. And I was able to apply all my national in research experience with my previous corporate roles and was able to add tremendous value to our clients at the stock company. From there, the rest is all brokerage work, even up till today, I’ve been on the move a bit essentially promoted. My next job was with Colliers International. At that time, they did not really have a tenant representation. specific segment within the business at Colliers they were really a landlord oriented company. I helped found their first tenant representation division and worked with a partner even to This day in the Bay Area on representing clients again, kind of west of the Rockies. Okay, from there. Another opportunity promotion per se move up. I moved to the studly Julian studly Company and today they’re called samples. At that time, same thing it was a well regarded still is today well regarded tenant representation firm but only in the office and industrial sectors. They had no retail division. So I started the retail division it steadily as well and help grow it. I had some personnel on the east coast and had a great six year, almost six year run there.

Today, I am now working

with my own firm in my own firm small little office, part of a four office entity called edge realty partners based in Dallas, Texas. I’ve kind of come full circle, in a sense. The founders of edge realty partners in Dallas were former friends colleagues of mine at Star back in the mid 90s. And they gave my partner and I the opportunity to open up the California office and we’ve been very successful over the last seven plus years. Working the office. Great no region out here.

Gabriel Petersen 9:39
Okay, and so So today, I mean, current day your your internal representation, and you’re focusing still in the California market.

Paul Bartlett 9:48
Yeah. So our the bulk of our clients we work with, specifically Southern California. So, from San Luis Obispo on the coast, inland into Bakersfield. South down to the Mexican border. However, we do have a few clients that we still represent outside of Southern California. All the way up into Northern California. Even in Nevada, Arizona.

Unknown Speaker 10:15

Gabriel Petersen 10:16
Gotcha. Yeah. So going into the tenant representation model, I guess. So just correct me anytime I make a mistake here because this is not something I know anything about. So you you represent. So just let’s say I, I’m starting a clothing company, you know, gauge clothing, and I want to find retail locations. So I would go to you as the seller agent, essentially, or the buyer’s agent. Right? And you would you would help me find listings all across, you know, wherever I’m looking for it regardless of who’s selling in or yada, yada, correct. Exactly. And as the relationship extends past that, do you? Are you? Is there any type of like I guess that’s it so so you are a buyer’s agent for retail commercial commercial properties correct?

Paul Bartlett 11:13
Right. So we, again we represent basic retailers apparel folks. But we also represent and have represented banks fast food fast casual sit down restaurants. We’ve kind of done everything under the sun in the restaurant genre of retail real estate. We’ve represented by big boxes from Hobby Lobby Sports Authority. Michael’s arts and crafts, Barnes and Noble. The mid sized guys like mentioned pure one, down to teeny tiny guys like GNC and Nextel, which is now sprint. You know Right, just a little little kiosks little little guys so and we’ve represented high end retail mall based retail all the way down into, you know, extreme value oriented retail and folks like Dollar Tree current client of ours. So we we’ve been exposed to a wide variety of uses a wide variety of geography to work in a wide variety of demographics of what the you know the core customer is of the various clients wide variety of ways of strategizing for real estate expansion and growth. repositioning Asset Management has come into play for a lot of our clients as well. So it’s been just a fantastic career for me about 30


Gabriel Petersen 13:04
Yeah, wide breadth of experience too. Yeah. Yeah, you started. you started your career. I mean, I probably shouldn’t be saying this, but you started your career almost two years after I was born. So that’s a that’s that’s a wide breadth of experience there. So, this is real estate investing show. So we are we try to I’m trying to keep the the the conversation going a little bit towards you know, to information that could be useful to investors. So, you represent the tenants you you represent the people that are buying commercial not buying but you know, leasing commercial property and buying and buying. Yep. So, if an investor wants to get started in investing in commercial properties, what are the things that that they should be looking for, to prepare their property for?

Unknown Speaker 13:57

Gabriel Petersen 13:58
around I mean, I know about Like, especially when it comes to, like restaurants, there’s, you know, build out oops, there’s build outs that you have to do. There’s one of the things that an investor needs to know when they go into commercial property.

Paul Bartlett 14:12
Yeah. So, again, I’m very retail restaurant entertainment, centric, you know, a little bit of medical, you know, medicals now, kind of popping up into a lot of retail properties, shopping centers, etc. So I’m going to be couching what I tell you with the lens, a little bit of tunnel vision as it relates to retail real estate, not necessarily office, or apartments. The apartments are becoming a bigger part of retail as well today. Most Oh, yeah, because real quick, I’ll make a segue. Retail, big shopping centers being built and developed. It’s pretty few and far between even even pre code But it was, you know, few and far between. But the development that we have seen, that includes retail has been mixed use projects with residential level and yeah, residential going up above the ground floor in the ground floors, restaurants and services and essential retail, like grocery stores, etc. So let me move off that and get back to your question. The biggest thing in retail real estate is the whole thing, location, location, location. And it starts at a macro level. myself, my partners, again, the clients that I work with, when we’re laying out a strategy, the first thing that we’re looking at is the overall market. Who’s the employer or employers in the market? how stable are they? How cyclical might they be? How’s the employment growth been in the market? Where is it looking like it’s headed? So we look at the economy of markets, first and foremost, then we start drilling into the demographics of the market. Who are the, you know, who are the consumers in this market? And how do they mesh with the use of the client that I’m working with. And then once you figure out that the markets a fit at a kind of a 30,000 foot level, now you’re starting to drill into, okay, if we were to map out a five store strategy for

let’s say,

let’s just say Orange County, where are the five primary trade areas that we should, you know, be looking at within Orange County and once you’ve figured out which traders we should be looking at, then you’re drilling down to the locations And then the locations, there’s just a slew of variables that need to, you know, essentially be checked off. The boxes need to be checked off visibility, access,


co tenancy, who are the CO tenants? Are they healthy? Are they going to help me help my client? Are they going to provide synergistic shopping opportunities? And so as an investor, you want to know that all of those things that I’ve just mentioned, they’re kind of aligned. And that the, you know, the value of the property has not only I guess fit for today for certain tendencies and tenant mixes, but it’s a viable long term and not necessarily viable just because of the tenants. are in place are healthy, but you need to ask the question if these tenants, and we’re seeing it with COVID right now, if they were to go away, what are the odds? What are the like? What is the likelihood of you being able to replace them, or take the property in a different direction, and be able to take advantage of, you know, trends and uses that are, you know, highest and best use for that property going forward?

Gabriel Petersen 18:34
And that that all comes down? I mean, as you’re saying to location, you got to be in a strong market, you got to be in a hot location. And so, I mean, sounds like commercial is the same as residential. You got to be in a good location for it to be viable. Yeah, you have stability in intendancy. So, so that’s good. Okay, so I guess you’re not really on the the lead generation side, but how do you guys go about getting new clients? Do you guys have any? Do you guys run digital ads? Do you? Is it just name recognition?

Paul Bartlett 19:18
Yeah, the, you know, the retail real estate industry is it’s big, don’t get me wrong, but it’s a pretty tight knit family, especially when you get into regions and, you know, the Southern California market is second only to, you know, New York Metro for in terms of size and breadth. But even within Southern California, there’s, you know, a tight knit group of people that I work with on a day in day out basis, whether they’re down in San Diego or up in Ventura County, wherever they might be, so

The networking is so key.

To your point, we do use digital marketing at edge we do use our social media platforms to help promote the company, our websites pretty in depth in what it shows we do what we have to offer you no case studies per se. So we use we use digital but the nuts and bolts of it is I’ll use the term blocking and tackling it’s networking. It’s getting referrals from former clients, current clients, it’s getting referrals from your edge network, the people within my company. It’s reaching out across the country to former colleagues at Spa back, learning what’s going on in their market, which new clients they’re seeing in their market. That Might be moving, you know, east to west, or where you are up in the northwest some of my good friends and colleagues up in the northwest, what are they seeing? Who might they be able to make a warm intro for me as they’re heading south into, you know, California so it’s, it’s less, it’s less cold calling than you might think. Don’t get me wrong, we do cold call, but it’s a lot more relationship building and after building relationships, keeping relationships, using the power of those relationships and your current network to expand and grow and take advantage of the opportunities that kind of come through that so we’re attacking it from high level to You know, right on the right on our level yeah around level so that

Gabriel Petersen 22:04
uh that i mean that seems to be a theme I’m think pretty much everybody that’s come on here I want to ask questions similar to this they they’re saying networking talking to people keeping those relationships going so there’s it’s no different in the retail commercial space so that’s, that’s good to know. Yeah, we’re gonna shift gears a little bit here so I just want to hear from your experience what has been the hardest thing you’ve gone through in real estate and what’s been the biggest lesson learned and then what has been the you know, your peak what’s been most enjoyable?

Paul Bartlett 22:40
Yeah, so I would say it’s been for me as a as a broker. The two toughest things that I’ve had to go through so far be a third with COVID. The first was just building though talking about relationships, going back to relationships, building relationships, those first three years as a broker,

you got to build a pipeline. And

you know, I can’t speak to residential but in commercial, whether you’re in the office sector, the industrial sector, retail sector, it takes time to build those relationships as a young, you know, young professional and the first three years were, were tough. I think I mentioned I have the opportunity of continue on continuing on after pick and save in the corporate world, working in house for other retailers. But I decided to roll the dice and become a broker. And, you know, those first three years of building the pipeline, it’s not pleasant from a financial and so it just, it was It was stressful, you know, I was married, I had a baby on the way and it was tough and you just have to have confidence in yourself. You have to have confidence that you know the tide is going to turn and that pipeline is gonna get filled, and then the money will follow. And then we can eventually came and it’s been wonderful. The other and I know this is kind of a no duh. The other tough period was the great recession. You know, the economy just went completely down the drain retailers, restaurants, even banks, for that matter, all the different uses entertainment, they all kind of hunkered down and went into hibernation and

has that made things difficult to again

Make money. But to an earlier point, you got to keep the relationships tight. You got to reach out you got to keep networking. Continuing to keep the relationship strong with the current client base you have. And same thing it just takes step back steadfastness and a positive mental attitude. And don’t give in to negativity and a negative mindset. Just keep waking up every morning with a smile on your face. And get and then we’ll see this, you know, the the ramifications of COVID. And what may happen to the marketplace six months from now, a year from now remains to be seen. I suspect. It’ll be a speed bump at a minimum. So yeah,

Gabriel Petersen 25:56
yeah, I’ve heard I’ve heard a lot of things about COVID and the next recession affecting commercial more than does pretty much any other sector. So I mean, who knows? You know? You don’t know. But uh, it’ll be an interesting, interesting ride ahead of us. Yeah. But I liked what you said, you got to keep confidence, you got to just keep going, you know, bumps come and you just got to keep the relationships moving along, and eventually something will work out. Yeah. So on top of that, so what’s been your peak experience? What’s been your favorite thing about being in relationship? It can either be an individual project that you’re on maybe or just what’s your What? What do you really enjoy about real real estate?

Paul Bartlett 26:38
So for me, it’s it’s two things. It’s, it’s the relationships in retail real estate specifically with what I do.

I’ll use the term I’m not a one and done.

broker, you know, I don’t make a deal and then I may not see that client for another five to 10 years depending on how long their lease term is in the deal that I got them in. We generally have relationships with our clients for as long as they’re in business, honestly. And so our our process is to never make a mistake on real estate choice always being their confidant, their fiduciary, making sure that they’re, they’re choosing the right real estate or making the best deal possible. And our business model is built upon a caught repeat business constant repeat business. And so, those relationships they become so strong over time and as much as my clients are, you know, my professional college per se, and and you need to you know, you always have to have their business. First and foremost in your head, the thing that happens over time as they become incredible friends, great friends. And so that again, kind of going back to the relationship thing it’s at that’s way up there has been one of the most satisfying things that I’ve got to experience over my career. The other and this is a little more technical and business is that what we do generally is we lay the groundwork. When we when we engage with a new client, we’re laying the groundwork on strategy, not just transactions, but strategy for markets multiple markets. For instance, Hobby Lobby, I represent throughout the state of California, we didn’t just lay out the strategy For San Diego, or the Bay Area, we laid out the strategy for the entire state. And I love that aspect of it, I’ve been able to really provide great value given my early career, corporate experience and research and analytics and modeling and, you know, helping build really sharp performers with the finance department at Ross have been able to really provide great value from from the initial strategy, then you move from strategy to executing on that strategy and getting into the transactions. And that’s another fun aspect of what I do. And then, you know, you move from the transactions and now it’s kind of more out of my hands because I don’t build the stores or the restaurants or the different clients operations, but you’re, you’re still in close contact in I’ll call the development part. process of what they’re doing. And then when the time comes to Grand open, you’re usually there for the grand opening of the restaurant or the retail operation, as long as it’s fairly close by. And you’re paying attention to that. I’ll call the baby that you helped give birth. And you want to make sure that that baby grows up nice and healthy and strong. And you get to see it from before it was a thing to when it’s full operational out there in the world, and performing hopefully very well and you get such great satisfaction at that stage of the whole process is is seeing these units open, open. Well, one and open

within reason of what you expected

them to open,

which also plays backwards into the transaction. Because you’ve negotiated a purchase price or rent based upon those sales expectations, performance expectations, so

it kind of it becomes a kind of a competition, not only

within, you know, did did we do a good job negotiating the best deal with that landlord, but at the end again, at the end of the day, you’re seeing these units open up, and it’s a competition. Did we guess right? You know, did we have the right educated guess, on how this thing would perform and is occupancy aligning with those expectations? All the pieces just kind of coming together? Huh?

Unknown Speaker 31:41
Yeah, cool.

Gabriel Petersen 31:43
I like it. So switching gears one more time. We do try to keep these shows to to around 20 to 30 minutes that we are getting to the end of our time here. But I want to ask before we end if there’s, you know, one piece of advice for somebody just starting out in real estate sales. They’re in, they’re going into retail, commercial, you know, either on the investing side or on the, you know, the agent side, what is that piece of advice you’d like to give them?

Paul Bartlett 32:11
You’d have to have a passion.

If you don’t feel the passion, in the beginning, get out. Because again, the passion is what’s going to drive you through the bumps. And there’s going to be bumps and there’s going to be peaks, and there’s going to be valleys. So you’ve got to have passion. You got to be confident in yourself and your abilities. But at the same time, you need to be you need to be humble, and you need to be not so confident that you can’t take advice you, you can’t learn. You always have to have a learning mindset. And always even today, you know, I’m still, you know, devouring as much new knowledge as I can

So I yeah, I’d say, you know, passion,


but a learning mindset. And

try not to let yourself get too high when things are going great or it’s hard and not let yourself get too low. Just always have that. You know, that competitive spirit that, you know, tomorrow is a new day and there’s opportunities tomorrow and keep your head up.

Gabriel Petersen 33:33
like it. I like it. Alright, so we are at the end, Paul, if somebody wanted to get a hold of you, what is the best way to get ahold of you?

Paul Bartlett 33:42
You can reach out to me through LinkedIn, Paul Bartlett, edge realty partners here in Orange County. You can also email me at P. Bartlett ba RT le TT at edge dash r

Those are probably the two easiest ways of connecting and

Gabriel Petersen 34:05
all right, perfect. Well, again, Paul, thank you very much for being on here. I appreciate everything you have shared with us. And for listeners and listeners and viewers. If you want to reach out get ahold, Paul, reach out to any of the ways he just said email LinkedIn. And until then, thank you for joining and, and we will see everyone on the next show. Thanks

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