From Where I Sit: Season 2, Episode 3 with Luke Petherbridge, Link Logistics CEO Transcript

Tom McGee:

Welcome to From Where I Sit, the podcast where we explore the forces shaping America's built economy. I'm your host, Tom McGee, president and CEO of ICSC. In discussion with prominent leaders and innovators, we cut through the noise to explore the trends and innovations influencing the future of our communities. Welcome to From Where I Sit. Today, I'm thrilled to be joined by one of the most influential leaders in commercial real estate and my good friend, Luke Petherbridge.

As CEO of Link Logistics, Luke oversees the largest portfolio of U.S. industrial and last mile properties, powering supply chain for thousands of businesses nationwide. With more than two decades of experience spanning global markets, from his early career in Australia to leading roles at DDR, ShopCore and LivCor, Luke is recognized for both operational excellence and bold vision. He's also the co-founder of CoreGiving, which has delivered millions of meals across North America, highlighting his commitment to both business results and community impact. Luke, welcome to the show.

Luke Petherbridge:

Thanks for having me, Tom. Thanks for having me. I miss you. I miss seeing you all the time.

Tom:

I miss you too. It's good to have an opportunity to see each other and talk today. Luke was heavily engaged in ICSC for a number of years and served on our executive board and we became great friends. And Luke is now leading a great organization, Link Logistics. And so why don't we just start there? Just start for the listeners, those that aren't aware, many will be, but many may not be. Link Logistics, its business model, its scale.

Luke:

Yeah, yeah, sure. I mean, we're a real estate company. We focus on, you mentioned it, industrial warehouse logistics. We really have tried to focus on owning that last mile, which is comparable as you think of retail, like focus on that last mile and get as close to the consumer and the markets as possible. As we build our portfolio, you talk about scale. This is a scaled business. We have almost half a billion feet, we have almost 8,000 customers all around the country. So think of the largest corporates, e-commerce providers, but just corporates, retailers. We have a lot of retailers, which makes me very happy, down to like small business. We have a parts business that has these entrepreneurs and small business. We have about 8,000 customers in our three and a half thousand buildings. We're all across the country. We're in every major market. You think of a market, we’re there, we’re there at scale.

And then from a business point of view, we have 1,100 people that serve our customers and provide access to real estate solutions and energy solutions and other things that really drive the supply chain. So the stat which I like, it's really hard to visualize half a billion feet is around 4% to 5% of U.S. GDP goes through a customer in a Link building. So we have a pretty unique purview into the economy and what we're seeing across, whether it's manufacturing, service, retail or consumption, which obviously you do too, Tom, but it's a pretty exciting business. And I've been very, very fortunate to work here for the last five years.

Tom:

That's a staggering statistic. 5% of the U.S. economy flows through 8,000 of your customers, and the vantage point you have. Let's just delve into that for a second. In your observations through that level of volume, are there certain things you're seeing related to the U.S. economy today that would be valuable to understand?

Luke:

Yeah, I mean, one, it's super dynamic. It's very hard to paint a very broad brush. I’m not trying to obfuscate the question. I think what I'd say as of today, as we sit here in November, I'm time checking this because it'll change, is the U.S. economy is pretty resilient. It's more resilient than probably what we thought. If you think about this year, we've thrown a lot at the supply chain, whether it's tariffs and global supply chain networks, whether it's global conflict, whether it's interest rates, changing administration and policy. It's been a pretty difficult year to navigate, but as we sit here at the end of early November, as of this morning, we have actually leased more space in 2025 on a comparable store basis than we did a year ago. So with all of that sort of change and uncertainty, the U.S. economy is fairly resilient. With regards to where we're seeing that resilience as a country, I think what you're seeing is this reindustrialization of the country is real. It's going to go on for not just 12 months or 24. This is a decade of rebuilding, but we're really seeing that whether it's in electricity or anything to do with power, both manufacturing around that, solar, EV, batteries, like that has been prevalent for the last three or four years.

More recently and real time, like real time demand tooling around data centers, the component parts to make that. Service data centers, obviously that's a huge part of the growing part of the business. But then you're also seeing just manufacturing reaccelerate here. And over the last five years, so whether it's the CHIPS Act, the IRA Act, or even the new administration, there's over half a trillion dollars of factory announcements here in the country that we've been tracking. It's really been that Midwest, the Southeast and Texas area that there’s spillover demand. If you think of like Austin, we’re the largest landlord in Austin for industrial and Tesla's built a gigafactory, but all the suppliers start to pool around that factory and take space.

The other one we're seeing is we're still seeing pretty sizable e-commerce growth. We saw Walmart, which is obviously a huge contributor or partner for all the retail landlords and ICSC specifically, their e-commerce growth is north of 20% in their last quarter. They're using their stores very well, but we still see e-commerce and the secular trend there is, in about a decade, 50% of the workforce from the United States will have grown up with Amazon Prime. And now Tom, you and I, and I don't want to age you. But I'll age myself. Amazon Prime started when I was 30. And I thought it was amazing that things got delivered in a week. Now it's like I watch the younger people. So I should be delivered in 24 hours. So this network of ability to serve is warehouses, stores and infill real estate.

My general takeaways, there's great resilience in the country. Doesn't take away, there is risk there. There's obviously risk with supply chain trade policy for sure. The consumer, how the consumer holds up in all of this is the real risk. But right now we're seeing that the resilience has been a positive surprise this year with everything that's thrown at it.

Tom:

Yeah. You said a number of things. I totally agree with you. The resiliency of the consumer, really the American economy, how dynamic it is and how it takes shocks and keeps on going. I love the phrase, the reindustrialization of America and you're seeing manufacturing move back. And supply chains, the last thing you talked about in regards to supply chains. I wondered if some of that is there's a number of factors that play into that, but some of that could also be a byproduct of the pandemic when we had some of the supply chain issues, just getting products on shelves and including some pretty essential products. And it’s one of the lessons of the pandemic, the importance of having supply and production closer to your consumer.

Luke:

I think that's a really good point. And I remember when I was trying to learn about supply chain, very simply, it's almost like three legs of the stool. There is cost. So everyone's thinking about how expensive it is. Customer satisfaction or speed. And that can be in customer or think of just building an aeroplane, Boeing, speed of getting parts there. And then the third one was risk. So from like 1990 to 2020, the risk was always like, we can, it's just in time. can have supply chains stretching over the world. There was no port strikes. Boats didn't go sideways in the Suez canal. Like, but then all of sudden what the pandemic did, Tom, you touched on it. It all of sudden, every supply chain, oh my goodness, there's real risk in this. Think about building an aeroplane, just because most people think of risk as toilet paper on the shelf, but think about building an aeroplane. You have a multi hundred million dollar airplane at the end of the chain of manufacturing, but the last component part is not there and it's somewhere else and it got stuck on a boat and it halts a whole supply chain. So what really has happened? You're exactly right. You know, retailers do it too. Their four port strategy that Walmart implemented. So the corners, they bring product into the country now, having more stops, some resilience in their stock. But that is still there. I'd say that's waning. I think people naturally then also like, well, how do I cut costs in supply chain again? Because that's really important. But I do think there's a little bit more resiliency there than what there was pre-pandemic. But it's something that they think about a lot, because supply chain is this constant moving, uber dynamic business and they're always trying to optimize, which is super fascinating from a landlord's point of view and our ability with half a billion feet to serve that. But it's constantly, and I'm amazed by how they do this, but it is something that they now in all their models constantly thinking about. Imagine if a plane goes down, how do they make, how do they box curios or whatever it is. All of this is incredibly important.

And you probably hear it from that the retailer side, like how they move goods around to make sure they're never out of stock at a store. But at the same time, you don't want to end up with a backroom full of stock. So it's this constant oscillating, which is beyond my level of intellect.

Tom:

It's rare where we have supply shortages, given the complexity and the interrelated nature of it. It does strike me as that one of the lessons of the pandemic for almost two decades, we all chased lower cost of production. That was kind of the mantra, right? And while that's still true, lower cost of production and supply, that's still really important. There's other elements of importance too. Is the product going to be available? And I need to serve my customers. So I need to be cognizant of other risks, including just availability. You had mentioned e-commerce as well. You're seeing really retailers being multi-dimensional using your facilities, but also using stores. There's many fulfillment centers as well, back to you need to serve your customer.

Luke:

It's interesting just on that last phrase is something that you and I think retail and retail landlords take for granted. Like you've got to serve your customers, meet your customers where they're at. I think that's something that we've really woven into Link is like, we're here to serve customers. And I think we've all started to think about, you've got to meet the customer where they're at, where they come to the store, where they want to look at the store and buy it get it shipped home.

So those that are multi-dimensional, as you mentioned it, I think they're the ones that win. You have to meet the customer where they're at and you've got to constantly innovate and be better and faster because that is the second wave of e-commerce, I think, is speed. It's just, it's the raw speed of being able to deliver. And what that means is Amazon's network has exploded.

And they now run it like eight little regions in the country where they’re completely self-sufficient with airports and trains. So they can create the speed that customers want. It's your point. You've got to serve your customers and the customer will tell you what they want.

Tom:

Well, there's only one channel that matters, it’s the consumer channel. It's the customer.

Luke:

Yeah, that's a good way to think about it.

Tom:

Luke, you mentioned one thing just about airports and trains, rail, just observations around infrastructure. I mean, the importance of infrastructure to your business, I would think is quite important and fulfilling that last mile. I mean, just the ability to one, get the product where it needs to be at your facility or somewhere else. Just given the scale of your business. And there's a lot of investment in infrastructure going on around the country now, but the U.S. infrastructure is also aging. You guys have visibility into things that are occurring.

Luke:

Yeah, it's interesting on that front. I'd say across the board, road is still the primary source of use of transport here in the country. I think the areas of concern, the lack of, we were with our biggest customers just recently and we just, we talk with them about where are they seeing pain points. So a few years ago it was labor, labor in the warehouse was a problem. When you think about when we were running super low unemployment levels, labor was hard. That doesn't seem to be big issue, they're still like truck drivers is a huge concern that they were raising. You said infrastructure, but I think the actual physical movement of that remains a challenge. The other part of infrastructure that we're hearing more about is not lack of access to warehouses, but power is becoming more of an issue. Just access to power. As we think about industrial and I don't think shopping centers are wildly different. We're a low power intensive asset. If you really think about it, we're a big warehouse, we have low intensity lights or high intensity lights or LED lights, and then gas powered forklifts and you have diesel trucks. So really the amount of electricity we use is quite low. As we move forward, we see the Rivian trucks for Amazon, they need to be charged at our facilities. We are going to morph like long haul trucking into some sort of alternate over time. We are seeing a, Pepsi's a good example using the Tesla vehicle, and then automation. So all of a sudden we've gone from a super low power need to it's slowly creeping up. Now it's nothing like high intensity use, but to access power is really hard. And I think that's the part of the infrastructure element that we're seeing around the country is access to power. It's becoming more difficult as you need more and more megawatts to fund or to provide access in your building. I think that is going to be a challenge. And that's probably the part of the infrastructure challenge for the country at the moment. I know Blackstone is investing around that and doing a lot of great things where I'll see trying to be a distributed power network with solar and batteries and do things like that. But access to power is going to be a real challenge for the country coming forward.

Tom:

Yeah, no, I agree with you. It will continue to be a challenge just with the growth of AI and the power needs of that. You just have a lot of competing interests as the economy just naturally grows, right? I mean, you're just going to need more energy to support that growth. You brought up sustainability and I know Link and you have identified five specific items that are your competitive advantage to drive long-term success. Sustainability being one of them, employee experience, customer experience, data and customer innovation. Talk about first, how did you arrive at those five and then maybe delve on those a little bit. Within that, I think aspects of your kind of focus upon people leadership, personal leadership, I think come through in many of those.

Luke:

Yeah. I think the first few years of Link was like, we were just building the planes we flew. And I think some of that is make sure you have a good ERP and accounting system and reporting and all things that businesses take for granted. I think when you get beyond that, you really need to say, what is our competitive advantage? What is it that we possess that others don't? And then how do you build a moat around that business or that unfair advantage, I call it. And when we thought about it for us, our unfair advantage is scale, not size, it's scale. Scale is a connected dot of how we serve a customer and how we manage customers and work with our customers to grow their businesses. In theory, if you have enough money, you can own half a billion feet of industrial buildings. You need a lot of money, but you can do that. But to connect the dots and be scaled is where you say, one customer, when you tell us something, that ripples through our network, that either we're solving your issue, we learn from that, we own buildings in the right path.

So when we think about our five competitive areas, obviously the customer is the centerpiece of what we do, building an experience around our customers to make sure that we're providing them the service, the buildings, we build energy solutions for them so we can provide and manage their utilities that make their businesses grow better. But it's really the customer-centric mindset, which I think that sort of came from my days in retail. Not only do you think about the customer being the retailer, you think about the customer's customer when you build a shopping center and flow and merchandise mix. We don't have to do that as much in industrial, but being customer-centric, working with our 8,000 customers, helping them grow, learn from them, understand what they need and then obviously build solutions.

The next one, if you're to be great at servicing your customer, you need to actually have great employees. So making sure we have a great employee experience, that we have this empowered execution model where we really trust our people to go do great things. So we hire great rate people, we hold them accountable and they do and deliver great outcomes for customers and for investors and for communities and stakeholders. I think that has been a really important part.

The third one, being data, or data or insights. One of the benefits of being really big is you end up with a brand new asset being all the information you can capture, not only on your portfolio, but on others and the market in general. So, you know, I think we have one of the largest proprietary data sets of information of our sector here at Link. I think we can use that data to be faster at making decisions, to own real estate and better locations for our customers. It's really an opportunity for us to use that data set in a very unique way. The benefit of being owned by Blackstone is our owner is an incredible data savvy investor. And I think using that information to make better investment decisions, no passive growth. It’s really been, and we've got like data scientists that work here. We've built proprietary models. We've been doing that for years. Obviously AI takes that to another level here at Link, which we're working on.

You know, sustainability, I think of that as more it's good business as opposed to being like, we're going to be, we're going to be a bastion for sustainability. It's just good business. Our customers want it. Our customers, employees want it. Our communities want it. We're that solar, battery, LEED certified buildings, LED. We've retrofitted hundreds of millions of feet of buildings to lower their power needs. That lowers the cost for our customers. Our buildings are more attractive. I mean, it's pretty simple. I think we do a lot of work around that.

And then the fifth one is innovation, whether it's investing in robotics, learning about robotics, learning about drone deliveries. We've done a lot of work around that. One of the things I learned when I was in retail is you've got to be prepared to be disrupted. There's disruption constantly. Office is going through it. There was disruption from COVID and work from home and Zoom did that. You've got to constantly challenge your business model. Like what could disrupt us and how do we think about that and learn from that and be more resilient to firstly, protect what we've got and manage that so we risk mitigants? But the alternative is like, how do you get on the front foot and be on your toes and go and accelerate and invest around that and potentially make new opportunities? And as we thought about business, it's like, what is our unfair advantage scale? And how does this scale manifest itself in many different opportunities?

So that's how we thought about really doubling down. You can't do everything anymore. It's like, we really try to focus our time, effort and money on the sort of differentiators where we think if we can be better at those, that that'll win long term.

Tom:

Well, I think it's brilliant. I think you've really elevated the strategy beyond just a focus on real estate, but really a multi-dimensional aspect to differentiate yourself in the marketplace. The comment you made about data and all the information you can access, it really goes back to that 5% of GDP runs through your 8,000 customers that, that occupy your properties. That's pretty powerful. The visibility of that, not just what it suggests about the U.S. economy, but what you learn so you can then turn around and serve your customers, your new customers better, or existing customers better.

Luke:

Yeah. We underwrite every deal that's coming out to market in a big volume. You know, you see all the other lease comps because we have a network that we're working within and we're like one of the largest owners. So you just get all this information from our business and our customers, but then also more broadly. To give you an example, we have 8,000 businesses and they're all, like you think of the U.S. economy, it's kind of happening in a Link warehouse. Our property managers talk to all our customers every quarter or more. Imagine if they came out and into our app, they just talk about that discussion. I spoke to Tom who makes surfboards. His business is doing well. He's seen margin pressure from tariffs or inflation or whatever. And imagine having 8,000 notes like that. That's kind of cool. Then now imagine AI crawling over that. You get like this real time pulse check of businesses in Texas, small business in Texas are doing really, really well at the moment, but large bay somewhere else is probably seeing a bit of softness. It allows us to then orientate our business, the real estate we own, can't buy and sell real estate like stops, but it allows you to reorientate your business with same themes from the very, very tip of the spear on massive scale.

As we thought of building our business, the other benefit we had was we were really big when we started. So normally when you start a business, you're small and you start building and you're building and building and you get really big and you're like, oh, now I've got to go build systems to manage it. When I joined Link in 2020, we were big and then we got really big. So everything we’ve thought about, like from the architecture of our data platform, from the way we market space, the way we report internally to all the data that feeds, we've really built on the base of we’re going to be really big when we have this great data set. What do we want to learn from it? And then how do you change all the processes in your business to do it?

So your point about, yes, we have all this going on. It's trying to extract all that information and then distill that data into insights. We're always working on it. I don't think we're ever going to perfect that there, but it's how do you draw great insights out of this vast data set. AI will help us be faster at that, but this proprietary data set that we're building, I think is incredibly valuable to Link and our customers, by the way, because if we know where growth is, we go build or buy our own real estate in that pocket to give our customers more access to the right real estate in the right markets, which is the ultimate goal.

Tom:

Yeah. Extracting that data to make better decisions, fact-based decisions. I want to talk a little bit about you and your career journey. Before we leave this topic, you mentioned something at the very end, making decisions around where to build, where to buy or acquire properties. You guys are really across the chain. You do build to suit, you do development, you do acquisition. Is there a strategy to the mix there, or is it really just as you kind of evaluate a particular market, you just determine what's needed?

Luke:

I think it's more what's the need. We, the benefit of, of being a PortCo, is we have multiple different sources of capital it's available from. Opportunistic capital that fits development a little bit more to core capital that could own long-term, the high credit building. So we can really participate at any point in the spectrum. Right now we've been a developer, spec developer. So there was that moment post COVID, we were under warehoused, so we became a big infill developer, like complex infill, brand new class A buildings. We've delivered 20 to 30 million feet over the last three or four years, which is an incredible testament to a platform that has only been around for five years. So we've done a great job there. We do build to suit for our customers. If we have land that makes sense, we can build for that. But then the bulk of our portfolio, we bought stabilized assets or value add opportunities where we've come in and leased them. That is by far 90% plus of our business has been that. So we're one of the most active buyers and sellers of real estate in our space in the country over the last five years. But today it's probably only a little more stabilized. I think one of the, we talked about the two demand drivers, e-commerce growing, which is U.S. economy and then re-industrialization.

The other big tailwind is there's just a lack of new supply. Going back to 2014, 2015 levels, which is a decade ago. Think about how much bigger the U.S. economy is today. So we're not building as much as we were, but we do have a little bit of excess inventory to work through over the coming years. But as you get through that, there's not much behind it. So maybe in a few years, you could see development picking back up, but right now it's own, stabilized or opportunity to lease up buildings.

Tom:

Little bit of redevelopment of repurposing of other properties. You know, not far from where I live here in New Jersey in Parsippany, there's a big project going on and taking an old office complex and making it a big Link distribution center. Two Hilton Court, I think that's the property. I've seen it, it’s impressive.

Luke:

Yeah, like that was an opportunity to do that, which is interesting. Like you think of just at the end of the day, we're land banking a little bit and different uses become more valuable in time, urban office versus warehouses. But yeah, that, and then the other thing is some of our buildings that are manufacturing based that have a ton of power. Is that more akin to a data center than it is to a manufacturer who highest and best use changes? You see that in retail too, highest and best use of our parcels become hotels or SELF storage or apartments for some of the REITs. It's a similar thing here, but in the main traditional industrial building, so you've got the highest and best use of a lot of our land.

Tom:

Well located real estate always finds its purpose. So its purpose may change over time, but it's going to find its purpose.

Luke:

Invest around location and you generally seem to do okay.

Tom:

Well, let's talk a little bit about you, your career journey with your accent. You grew up in the Bronx. You're a New Yorker. No. So you grew up in Australia, you’re from Australia, you started your career there. You've had a very incredible career, diverse career, asset management, finance, CFO of a public company. Now CEO of three different commercial real estate entities in three different sectors, multifamily, retail, and now industrial. Just high level, discuss your career journey. Kind of, how it began and how you ended up where you're at today.

Luke:

Yeah, well, I did grow up in Australia and I got into finance. I worked for, straight out of college, worked for a big mutual fund manager. I worked in their investor business there. Went to a small boutique hedge fund. We did an M&A fund and an Asia long/short fund. It was like a startup. We only had probably $40 or $50 million of assets. When I left, we had about $5 billion. That was ‘03 to ‘08, but we got into real estate listed three REITs in Australia that owned U.S. real estate, Japanese real estate and European real estate. So this is when Australian capital was investing offshore through listed vehicles. So I got a great opportunity to work with an incredibly smart founder and grow a business there. So that was like formative years for me, five years working exceptionally hard, doing a lot. I went from there to Macquarie Bank, which is obviously a big investment bank, and it had a joint venture with DDR. So the, the REIT that was in Cleveland now, Curbline Site Centers is the, I guess the host DDR vehicles, but went and so I was a JV there. It was a listed JV in Australia, but I used to go to Cleveland and I got into the U.S. retail business. That's where I started touching retail. I joined that business in DT and two weeks later, Lehman went bankrupt. So timing to join a new and become CEO of a REIT was not ideal. Mervyns, for the retail listeners, was our largest customer or tenant and they had 10% of our rent roll and we were over levered. So it became a real workout situation for three or four years from ‘08 to ‘11. We eventually sold that business, which I think was a testament for not letting it collapse. I think it was just, it was caught in the eye of the storm of the GFC (Global Financial Crisis). So it was a huge learning opportunity. We had a great board member. Steve Guttman was on my board. So one of the people who worked at Federal, Bob Joss, who was the Dean of Stanford, on the board of Citi, was on my board. So I had to learn a lot. And the lesson there was like, when things are the worst is when you can learn the most. I didn't appreciate that at the time. I do now. But then after that, Dan Hurwitz called me and said, you know, I used to work with Dan because he was the JV. He said, would you ever move to Cleveland? I've been to Cleveland a lot. I was living in Sydney, Australia.

Tom:

 Dan could be a very convincing guy. He got you to move from Australia to Cleveland.

Luke:

He is. And it was not probably, we had two little kids and Australians naturally want to live overseas. And we're like, sure, why not? We'll go live in Cleveland. And fell in love with the Midwest, not the winters, but fell in love with the Midwest. Had a great time at DDR. We did a lot of deals. I was there from ‘11 to ‘16-ish. Did a lot of things with Blackstone. A lot of JVs there and worked with David and Dan and the team. And really got to learn the U.S. retail business more as an operator than an investor. And from there went to ShopCore. So moved to Chicago and helped build Blackstone's retail business, which is now Perform Properties. It was at ShopCore, worked at ShopCore for five years. You're right, I was at LivCor for a moment there. Multifamily, which is a fascinating business, very data centric, very big. It had 80 or 90,000 apartments when I was there, it's now much bigger.

And then in 2020, Blackstone moved me again and I've been at Link for five years and got to build this business and the franchise that is now Link Logistics. So I'm still a Cleveland Browns fan. I didn't give up on them. It's tough. I must admit, I'm a loyal person, but it's been awesome. I've really enjoyed every, every moment. You learn a lot in every seat. I've really been very lucky.

Tom:

Talk about a career journey. I mean, you've literally moved across the world and then you navigated through a lot of different types of organizations over your career. And you mentioned Dan, Dan's a good friend of both of ours. And I know he's quite proud of your accomplishments and where you landed today. Let's talk about commercial real estate in ShopCore, LivCore, Link, three different sectors of commercial real estate. And I know you spent a lot more time in retail than you did in multifamily. And now you spend a lot of time in industrial, but just talking about the differences of the three, not in the differences of their different asset classes, but just the way you approach customer and in your tenant base in each of those.

Luke:

Yeah. And I think what I would say just about commercial real estate is a lot more similar than it is different. We're just trying to lease space to our customers, create spaces for customers to grow either families, businesses, attract their customers when you really get to the crux of it. So the output of that is there's lots of little things different asset classes do that you can learn from. So starting with retail, it's one of the only asset classes that your neighbor matters. If you really think about it, when you're a retailer, the retailers beside you or the retailers in a shopping center or a mall really matter because, like use Whole Foods, the space right beside a Whole Foods is more valuable than a space over the street from Whole Foods. That is abnormal to most asset classes. When you're in an office building, the people that are above or below you generally don't matter. If you're in an apartment building, they don't matter. And if you're in a warehouse, they generally don't matter either, other than truck core dynamics, moving trucks around. It really doesn't matter. So merchandise mix, which retail landlords obsess over, is super unique. It really is something that is very distinctly retail. And it's something that I would, and as you think of the customer, you think of the retailer as a customer, but then it's the customer's customer that you obsess over. You think about the way site lines work and the way, you know, customers flow through an asset to reach the retailer, which then pays you. This customer centricity, which you embody so well, is something that's very much unique to retail. It's something that's deep in my DNA.

When I went to multifamily and industrial, it's a little more commodity. A three bedroom apartment is a three bedroom apartment and, and a 50,000 foot warehouse is a 50,000 foot warehouse. So it's a little bit more commodity like the benefit of commodities. can run it at massive scale. So you think of a retail center, every asset has an asset plan. They're very unique. It's very intricate. And when you have 10 of them, they all have the same plans. It's very hard to scale that without being linear. In apartments, the more you own, the more data you get, the better you can set rents, the better you can do ROI. It becomes a bit more of a flywheel at scale. So just like I learned customer centricity and the way you think of customer working with customers in retail. The thing I learned about from multi is the way you can use data to make decisions at scale and at speed that provide a competitive advantage.

And then in industrial, using those two things to build Link around, let's use data to be able to work and find where we want to own and set rents do all that at speed and scale and be able to give market comps to our customers at speed and scale. And then build like a customer centric operation where we have our own app and portal for customers that can access that. We built our own energy solution business where we can offer you the energy and manage that for you. Because a customer, Tom's surfboard operator, all you want to do is make surfboards. All the other stuff is noise. How can we make everything easy? I think you've done that very well. Retail has to think about it. think your partners do it with data. And that's what we've really tried to do in industrial.

But that learning from all the other asset classes. And I would say what we're doing in retail, what I'm seeing in retail, like in a mall, is really what hotels were doing earlier. And when you walk into an office building, feels like some office buildings, you walk into Willis Tower, it feels like a hotel now. Like it's all becoming very experiential about how you operate. So it's learning these asset classes.

I mean, my, my advice to anyone in real estate is bounce around in different asset classes. Like you can one, bring your experience to it, but also you learn so much. Wow. That's really interesting. The way you think about that. I wonder how I could apply that to an apartment building or student housing. My son's at college. I mean, student housing is like a hotel. It's like insanely nice and opulent and gyms and all this stuff, but that's all this, you start to- We've got the person that runs American Campus, Blackstone's student housing business is a person that used to work for Hilton, Rob Palleschi. He's a hotel guy that's running a student housing business. So I think there's a real opportunity to learn from asset classes and like retail's done an awesome job, probably the best of thinking about the customer, which you have to, and we're trying to embody some of those great traits at Link.

Tom:

Well, customer centricity applies in any industry, in any sector of commercial real estate. In our final minutes together, I want to touch on two topics that I know are near and dear to you. One is people and leadership and your leadership style. Talk a little bit about how you would describe your leadership style and why it's so important to you, not just as a leader, but as a person to build a great relationship with your team and how you lead them through. In the course of your career, you mentioned the financial crisis and pandemic. You've led teams through some very challenging periods of time. Talk a little bit about that.

Luke:

Yeah, I think I'd start with you can't do it on your own. Like anyone that thinks they can do everything on their own is fooling themselves. The moment you realize you can't do everything yourself or on your own, you then say, well, if I can't do it on my own, I want the best people around me. If you want the best people around you, you want to make sure they all have a voice and you collaborate clearly with each other. So my leadership style has been uber collaborative, hire great people and then the part which I would challenge everyone to say, well, that makes so much sense. Great people do great things. And that means you kind of have to step away. That is the thing I'd say I find most people struggle the most with is you get a great person. And I use football analogy is the best one. Like I'd love to be a quarterback. That would be the best job. You get to throw the ball. When you become more senior, you become the coach and you watch from the sideline, but you're still on the sideline. And then when you become really say you're like the general manager, you're sitting in the suite, watching all this, you're getting the right people, the right dynamic provided in the right framework, but you don't get to throw the ball anymore. And honestly, you shouldn't throw the ball. You should just make sure those people that you really have empowered, you've empowered them, you hold them accountable and let them solve things. And that's where we've really been able to supercharge Link and Shopcore and Livcor is hire great people. Great people only stay if they're empowered and allowed to go do great things. And that's what we've really embodied here at Link. It seems to work. We, it doesn't work all the time, empowered execution have curious people and then give those people real rope to go solve big problems. And they solve problems better than me. Like they're so much smarter and innovative than I'll ever be. It's just, I'm very lucky to have them and work around them.

Tom:

Well, as they say, the smartest people put smarter people around them, Confidence is, you give people confidence and it's a sign of confidence when you step back too, because it's you're confident enough to allow the people you've chosen to go out and do the things they're best at. So kudos to you. And the second thing is community. And I mentioned that you were the founder of CoreGiving. I know Link Logistics as an entity also does a tremendous amount in the community. So share a little bit about that and what drives you. mean, what drove you to be the founder of CoreGiving and all the great things that it does.

Luke:

It started with real estate. We're an integral part of every community, whether you're in apartments or office or where we're local, industrial shopping centers. You are a local owner. You're a fabric of the local community all the time. And when I was at DDR, we did all these great things, like so many firms do. The thing I'd admire, one of the things I admire about America is how philanthropic Americans in a world that is lots of challenges. Like I think the thing you should always remember, like you're just so philanthropic as a country and society, which warms me and firms that up, which is awesome. It really is incredible. And when we started ShopCore, we thought instead of doing lots of things everywhere, let's find one common issue we're going to rally around. And we founded CoreGiving and the issue is, childhood hunger and one in five children don't know where the next meal is coming from. So the way I think of that is one that's abhorrent. We don't want that as a society. It's not good for today or for the future leaders to be malnutritioned and not learn and it's socioeconomic problems. So imagine kids that you get a long weekend and what happens is on the long weekend, most kids are super excited to have the Monday off. One in five children are nervous because they don't know, school is their main source of food and nutrition.

So we built CoreGiving. We have so many great partners and friends and companies that get involved. We have CoreGiving Day that went global for the last two years. So was in, I think, 20 countries, 30 different Blackstone PortCos, three and a half thousand volunteers around the world, volunteered at local food banks. I think we provided almost a hundred, or funded almost a hundred million meals over the last four or five years. But I'd say I'm just one very small hand in what this does. It's something that gives me great joy that we can fix this. It's obviously sad that it's not an epidemic that I can solve just yet, but the number of people that work on this and help on this and brokers and law firms that give to it is pretty remarkable. I've been, you know, we're in fortunate position. We really try to, all these local communities really work and give back to wherever we possibly can.

Tom:

Well, thank you. I mean, that's a hundred million meals is incredible. Thank you for your leadership and what you've done for the community and all the people that you're working with at CoreGiving. It's just tremendous. And I share your concern that it's sad that it is something we need to deal with, but I'm glad there's people like you out there dealing with it. So, so thank you.

Luke:

Thank you. Thank you very much.

Tom:

Two final things. One, let's imagine five years from now, the industrial space. What do you see different than what you see today?

Luke:

I say it's very tethered to the U.S. economy. It is like the U.S. economy at large. I'd say more innovation, whether it's automation in the warehouse, it's solving the consumer of a decade, which is younger millennials that are going to be the major buyers. It's going to be faster and more resilient. And I say we're to have to think about the power needs of our customers. So I think it's probably similar to what we've done for the last five years, but innovation, delivery, drones are all in the future. Maybe not in the next five years, but we need to be thinking about that.

Tom:

And power is something we'll be talking about and we'll be front and center for the foreseeable future. Okay. Final question. Cleveland Browns. Win the Superbowl within the next decade? Yes? No?

Luke:

I'm an eternal optimist, Tom. Yes. Yes, we are. There's no data point to suggest that and this is not investment advice, but I am an eternal optimist. I am the Cleveland Browns guy that, you know, now I'm like, oh my goodness, but you call me at the beginning of August, I reckon we're going to go 12 and five and we're going to win the AFC North. Every year I say the same thing. My friends think I'm an idiot, but I'm eternal optimist. But I'm going say yes. Why not? Let's have some hope.

Tom:

All right. Fair enough. I like the optimism. Thanks. Thanks for being on the show today.

Luke:

Thanks so much, Tom, I really appreciate it.

Tom:

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