How Anthony Scavo Built 6M Sq Ft of Multi-Tenant Industrial & Self-Storage

Share via:

Subscribe via:

In this episode of the Investor Fuel Podcast, host Leo Wehdeking interviews Anthony Scavo, an operating partner at Base Industrial, who shares insights into the multi-tenant industrial real estate sector. Anthony discusses his business focus on acquiring small bay industrial properties and developing self-storage facilities across the East Coast. He emphasizes the importance of building a strong reputation, effective management, and the challenges of scaling a growing business. The conversation also highlights the significance of networking and maintaining relationships in the real estate industry.

Resources and Links from this show:

Listen to the Audio Version of this Episode

Investor Fuel Show Transcript:

Anthony Scavo (00:00)
it’s multi-tenant industrial, not multi-family. yeah, we describe it as actually class C multi-family, if you want to laugh. So it’s multi-family, but with industrial tenants. It’s kind of interesting, right? Think about it like that. That’s how people listening will see it. Because it will look like basically a townhouse development, but it’ll be all single-story industrial buildings or single-story tenants across a big park. And they all operate.

Leo Wehdeking (00:12)
Yeah.

a big part.

Anthony Scavo (00:28)
like in their own little houses, right, basically. And so you’ll have a vibrant community of small businesses, almost like an incubator space where they all work together, they all know each other. It’s kind of a cool thing.

Leo Wehdeking (00:30)
So you’ll have a vibrant community, small businesses, almost like an incubator space where they all work together, they all know each other. It’s kind of a

everyone, welcome to the investor fuel podcast. am your host Leo Wehdeking and today I am joined by someone I’ve been looking forward to chatting with. Anthony Scavo, okay, who’s been making serious move in the real estate industry. Anthony, glad to have you here, man. I think our listeners are really going to take something away from how you’ve been approaching the real estate industry nowadays. So let’s dive in.

Alright and for people who may not be familiar with your world alright can you give us a short version on what’s your main focus these days in your business?

Anthony Scavo (02:51)
Yeah,

I really don’t thanks for the time. so I work.

I’m the operating partner of Base Industrial. We do two basic verticals on our business. We buy and aggregate Small Bay Industrial. And some people might not know that Small Bay Industrial is a building that has multiple tenants. That’s usually around 100 to 200,000 square feet in size, right? So instead of like the Amazon distributors you see, you would come to our property and see 20, 30 tenants in one building with businesses ranging from an air conditioning repairman

I mean, we even have some retail type business like a barber, a massage place, you know, like there’ll be things like that too, a little bit different than normal industrial parks because it had some of our products, some of our properties had some client facing aspects, some don’t. So in the ones that don’t, those are more like typical industrial uses, maybe a woodworking shop, a cabinet builder, and then the parks that have more of a client facing face, you’ll see GCs, even, you know, we even have up to a recording.

Leo Wehdeking (03:31)
because some of our products have some client facing aspects, don’t. So the ones that don’t, those are more typical industries, maybe a little work you shot.

Anthony Scavo (03:52)
studio, barbershops. So those are a little bit more retail-ish even though they’re not a really retail property. And then we also develop self-storage building ground up across the country mostly on the East Coast.

Leo Wehdeking (03:58)
and we also develop self-steering, driving, and driving up across the country mostly in East-Polish.

Alright, alright, perfect. And Anthony, in what markets are you operating in?

Anthony Scavo (04:08)
We’re operating right now with the aggregation plan on the acquiring small bay industrial, mostly in Florida and Texas with the self storage development. We’re up and down the East coast in New York, Jersey, Florida, all over Connecticut, you know, also as far, call it as far west as Detroit and down that way. So we try to stay.

kind of from the middle of the country over east for self storage development. Just because our development team has to go to the properties, it’s a little far when you start going past that. And then for the buying the existing properties, we buy those. Right now we’ve been in Florida and Texas mostly. We’re already spread farther to the Sun Belt in the next couple of years.

Leo Wehdeking (04:45)
portfolio to be to send out in the next couple years.

All right love it love it. Anthony something that really caught my attention about you is the way that you’ve been able to build up a portfolio with commercial and large multifamily investing. Can you tell the audience how you’ve been able to keep that machine running smoothly?

Anthony Scavo (05:10)
Yeah,

it’s multi-tenant industrial, not multi-family. yeah, we describe it as actually class C multi-family, if you want to laugh. So it’s multi-family, but with industrial tenants. It’s kind of interesting, right? Think about it like that. That’s how people listening will see it. Because it will look like basically a townhouse development, but it’ll be all single-story industrial buildings or single-story tenants across a big park. And they all operate.

Leo Wehdeking (06:11)
Yeah.

a big part.

Anthony Scavo (06:26)
like in their own little houses, right, basically. And so you’ll have a vibrant community of small businesses, almost like an incubator space where they all work together, they all know each other. It’s kind of a cool

Leo Wehdeking (06:28)
So you’ll have a vibrant community, small businesses, almost like an incubator space where they all work together, they all know each other. It’s kind of a

Anthony Scavo (06:38)
It’s more like we hire managers out of the multifamily world to managing industrial, because that’s what it’s more like. It’s not really managing, it’s not like a hands-off management, like when you have a big industrial tenant who has their own real estate force, these guys come to you for everything, right?

Leo Wehdeking (06:38)
thing. It’s more like we hire managers out of the multi-

It’s not really managing, like, it’s not like a hands-off management of which, you have a big industrial tenant, there’s a great real estate force, these guys come to you for everything,

Anthony Scavo (06:55)
And you explain

Leo Wehdeking (06:55)
Yes.

Anthony Scavo (06:56)
to them that sometimes it’s in their lease, they have to do it, but we go help them, right? And that’s the type of landlords we are. try to help these small businesses and small tenants. And it’s been working very well for us, but we’ve been staying active in it just by being really aggressive in outreach to brokers, sellers, direct sales. And I think personally what happened over our last call, we’ve been buying for almost…

Leo Wehdeking (07:06)
We’ve been staying.

And I ⁓

Anthony Scavo (07:22)
Almost four years now.

constantly and every deal that we’ve been on the contract and passed the diligence we have closed on. So I think that reputation has been echoing in the broker community. So they’ve been bringing us a lot of deals off market before they go out to market to

let us look at them first because they know if we like it and we tell them where to do it, we’ll close, right? And we just have that proven now and it’s been great. more more our reputation has been getting out there, I think it’s it’s just been helping us

Leo Wehdeking (07:39)
Exactly

Anthony Scavo (07:53)
with the deal flowing out, helping us stay busy.

Leo Wehdeking (07:56)
Yeah,

actually having good reputation helps every business, you know, because having a good reputation with one of your clients may result in the word of mouth, okay, which is pretty much people referring you and making your business a little bit more like, how do you say, like…

knowable like people will actually get to know where you are. Hey that’s actually very good Anthony. Now every operator that I know has a moment where things got real all right maybe a deal that went sideways or a time they had to pivot really fast do you mind sharing one of those moments?

Anthony Scavo (08:34)
Yeah, we have them every day, right?

Leo Wehdeking (08:36)
You

Anthony Scavo (08:36)
Well, we

have 1,500 tenants right now, right? So we have a lot of problems every day. we also, I don’t know if I mentioned it, we manage the multi-tenant industrial stuff ourselves, right? That’s base space, that’s our management company shirt actually. So we manage it all at house. we went from having three employees to having 53, right? Over three, four years. So it’s been a pretty exponential growth strategy.

Leo Wehdeking (08:53)
I’m

Anthony Scavo (09:04)
But having that many employees has given us a lot of like aha moments, right? And I think we’re still learning because, you know, I listened to a great book about management and things like that. And I think one of the best things they said, listen, and it’s pretty cold, but it’s true. If you visualize an employee and they’re not there tomorrow, is it a bad thing or a good thing? Do you feel like you miss them?

Leo Wehdeking (09:07)
I think we’re still learning because I listen to a great book about management and things like that. I think one of best things is that it’s pretty cold but it’s true.

Anthony Scavo (09:59)
And if you don’t feel like you miss them, they shouldn’t be there.

Leo Wehdeking (09:59)
I don’t feel like you missed them, they shouldn’t

Anthony Scavo (10:02)
And it’s hard to be like, especially for me, I’m very empathetic to people, I feel bad. So when you think about that, you really have to sometimes have those come to like Jesus moments and say, guys, like our company is more important than one person, right? Do we need to bring in someone better or do we need to reposition this person to succeed? Because they’re not working in that position, right? So that’s one thing that’s always hard. it’s, listen.

Leo Wehdeking (10:02)
And it’s hard to be like, especially for me, I’m very empathetic to people, feel bad. So when you think about that, you really have to sometimes have those come to like Jesus moments and say, like our company is more important than one person, right? Do we need to bring in someone better or do we need to reposition this person to succeed? Does it not work in that position, right? So that’s one thing that’s always hard and it’s, it was it.

Anthony Scavo (10:28)
Anyone who tells you it’s not hard is either very cold or they’re not doing this a lot because it’s hard to do that with people and the more people around sometimes and you have to lay people off. You should always take care of them the best you can, of course, after that. But that’s always a hard moment. then, listen, another deal we were doing, probably our second large portfolio deal, one of our partners said they couldn’t come up with a piece of the capital stack and we had to go find that within 30 days. know, that was a hard thing too. And listen,

If you’re going to start as an allocator, syndicator, whatever you want to call it in the beginning, and just use, you know, friends and family high net worth money, you’re going to have moments like that. It just happens, right? It’s not reliable capital, right? So, don’t do it out. And as you grow, the capital gets more reliable, right? It might not be as lucrative, but it gets more reliable. So, you have to just be ready for those changes and, you know, know what your business is and stick with your strategy. Because if you don’t…

Leo Wehdeking (11:01)
⁓ Exactly

Correct.

Anthony Scavo (11:22)
That’s something else you have to learn. If you don’t stick with a strategy, you’re going to make a mistake that you didn’t intend or you didn’t want to make. So it’s a very, it’s a very tight line you’re walking. You have to stick with what you know and do what you say.

Leo Wehdeking (11:24)
If you don’t stick with a strategy, you’re going to make a mistake that you didn’t intend or you didn’t want to make. So it’s a very tight line you’re walking. have to stick with what you know and do what you say.

Yeah, actually that’s the kind of stuff that some people don’t like to talk about enough. Laying off people, it’s hard, but when you have a business or when you operate one, those are…

I believe it’s the people depending on you, know, and you have to lay them off. It’s hard, okay, because trust me, I’ve been there and that’s not easy, especially these times, you know, and honestly, for me, people that actually talk about this stuff, it’s people who actually stay in the game.

for long term, know, the kind of people that take these kind of decisions because they’re hard, you know, we’re all human beings, you know, but again we all have a business to run, okay, so let me ask you this Anthony, what are you most focused on solving or scaling next?

Anthony Scavo (12:28)
I mean, we’re always trying to scale, right? We have another call it five, 600,000 square feet on the contract now. So that will take us to almost 6 million square feet that we own or operate. So, you know, the next level of scaling is always difficult and that’s what we’re trying to do. And I mean, most of that’s going to be by acquiring more multi-ten industrial assets.

Leo Wehdeking (12:40)
level of scaling is always difficult and that’s what we’re trying to

I mean, most of that’s gonna be by choir.

Anthony Scavo (12:47)
But we’re in the middle of a lot of different things that are all big moves for our company. You know, we’re refinancing out a big, like a million square foot storage portfolio. So juggling all these things are difficult, but it’s also part of growing, right? And without, without knowing how to work the capital markets correctly, it’s hard to grow. So a lot of that’s been a learning experience for me coming here, because most of my past background was in development, construction, and calling it taking dirt to a building, right? It’s a little different than

Leo Wehdeking (12:49)
think they’re all big moves for our company. You know, we’re refinancing on a like a million square foot storage portfolio. So generally all these things are difficult, but it’s also part of growing, right?

So a lot of that’s been under the experience of me coming here because most of my past background was in development, construction, and only taking care of a building, right? So that’s

Anthony Scavo (13:17)
what I do now.

Leo Wehdeking (13:17)
what I do now.

Anthony Scavo (13:18)
But I think it’s I think the markets thank God have been very receptive to our asset class, especially because it is cash flowing and stable. It is below replacement costs. It’s a great thing to buy. So I think it’s been helping us. But people that are on the fringe that have maybe a deal they think is great that isn’t that great. I’ll probably experience a lot of pain right now. It’s not a good time to go out and try to do deals that are right on that precipice that could be great that might be not our not penciling great right

Leo Wehdeking (13:24)
because it is cash flowing, it is stable, is well-replaced, it’s a great thing to buy. So I think it’s been helping us. But for people that are on the front of it, and maybe they think it’s great, it isn’t that great, I probably experience a lot of pain right there.

Anthony Scavo (13:46)
now.

Leo Wehdeking (13:46)
Exactly, exactly. Well, I know that actually that’s something you know what you’re trying to achieve that’s actually very big, you know, because obviously you will need to buy a lot of

industrial commercial I don’t know how do you call it but places you told me that it was it was not multifamily

Anthony Scavo (14:48)
No, multi-ten industrial. Yeah, we just call it that. You people, you might’ve heard small bay Leo, like small bay, shallow bay. They call it, the funny thing about this, it’s been around forever, right? Like, where are you from? Where are you based?

Leo Wehdeking (14:50)
multi-tenant industrial, okay, okay,

No, I’m

based in Florida

Anthony Scavo (15:05)
Okay, you know, then you’ll know a perfect listen. You know, when you drive around, you see all those roll up doors in the back, the fronts like glass, the fronts like, like a retail front and the back has a roll up door all over Florida. That’s what we’re buying, just in bigger scale, right? So, you know, they got a roll, they got a roll up door in the back, a little warehouse area, the fronts client facing. So we buy parks with that, right?

Leo Wehdeking (15:16)
Yep. And be okay. All right.

Mm-hmm.

Anthony Scavo (15:28)
And in Florida, they call it small bay flex. In Texas, they call it shallow bay. In California, they call it flex, like retail. We call it multi-tenant industrial, just because it’s multi-tenants in industrial properties, right? Yeah, absolutely. Yeah.

Leo Wehdeking (15:42)
In an industrial property. Yeah, yeah, yeah. Yeah, I’ve seen them actually ⁓

There are quite few ⁓ Right, right. Yeah, there’s a lot. Yeah. Yeah, there’s a lot but there’s quite a few on I believe he’s on the backside of the turnpike right near Yeah, right next to Doral if I’m not wrong. Yeah, so

Anthony Scavo (15:48)
Oh, in Florida is a lot. Florida is a lot.

Yeah, the

new one we’re buying is in Hialeah actually. We’re buying like couple hundred thousand square feet in Hialeah. Yeah.

Leo Wehdeking (16:06)
Okay, cool cool. Yeah, hi.

Hi, Aliya. Actually, it’s you know, it’s a good market right now for what you’re looking for

Anthony Scavo (16:12)
Yes, so is Medley. Medley

and Hialeah are great markets. They’re the best in Miami for true and small tenant, small businesses. really are. They’re the best.

Leo Wehdeking (16:16)
somewhere.

Yeah, well.

Anthony Scavo (16:23)
know,

Leo, whole thing is like the funny thing is in like the Northeast, in New York where I’m based, you can’t even buy this stuff because it’s number one, there’s not that much of it. But where it is, the families have had it for 100 years. Like no one sells it because they make so much money. It’s always cute because they’re always it’s always 100 percent occupied because there’s not a lot of it up here. And those guys have such low bases that probably never sell it because that will be all taxable. don’t want you know, no one wants to make like pay that much tax enough to own it that long. So

Leo Wehdeking (16:27)
Mm-hmm.

The families have had it for 100 years. No one sells it because they make so much money. It’s always 100 % occupied. Because there’s not a lot of it up here. And those guys have such low bases, they’ll probably never sell it. they’ll be all taxed. No one wants to like pay that much tax. So that’s

Anthony Scavo (16:51)
That’s been our problem in some of the really like call it urban markets.

Leo Wehdeking (16:52)
been our problem with some of really like old.

Anthony Scavo (16:54)
You can’t find this stuff because it’s, it never trades, right? That’s the other problem.

Leo Wehdeking (16:58)
Yeah, that’s correct.

Yeah, that’s right. Now, Anthony, I know that a lot of people listening are either earlier in their journey or looking to level up and I think they will benefit from hearing this. Now, when it comes about relationships and growing your network, what’s made the biggest difference for you?

Anthony Scavo (17:15)
me? Listen, my first job was at my first job was for 26 years, by the way, so everyone gets the context. I was I was at a company, right, that was very insulated. It was a big family owned real estate company out of New York. But, you know, we did everything in house. We were on GC, our own development company. So we didn’t really we had people work for us. We didn’t really have connections, right?

Leo Wehdeking (17:34)
We didn’t really have connections, right?

Everyone knew about it, but you

Anthony Scavo (17:37)
Everyone knew about it, you didn’t really

need to network, right? Because you had to work. You had to work. No. But listen, it was difficult. Yes.

Leo Wehdeking (17:41)
Not like you do today, not like you do today. Back in the days obviously you felt

like hey I have a connection but you really

Anthony Scavo (17:51)
Or if

your boss had the money, have to stay. You don’t really need to go. Who are you talking to? They come into court, you. You’re not going to court them because they won’t work for you. So that’s the kind of relationship I had. It wasn’t about me trying to find other places to really talk to. you know, I was there. That was my first job. I’m only on my third job now. So you can tell you how it wasn’t that many places. So.

Leo Wehdeking (17:59)
Correct.

Hahaha

Anthony Scavo (18:12)
Networking was new for me. And listen, I go to a lot of events. I mean, I do the I’m on podcasts now, which I never thought I’d be doing. Like this is my 25th podcast, I think. I guess people like to hear it like from the Brooklyn guy about real estate. It’s kind of interesting. But it’s I think the funny thing is that the best thing you could do is meet as many people as you can. Right. Because what I found lately, you might talk to someone three years before.

Leo Wehdeking (18:28)
The best thing you can do is meet as many people as you can,

Anthony Scavo (18:38)
You stay in touch with them. A lot of these, if you want to really level up and find institutional type capital, serious, capital, serious investors, they don’t invest with you the first time. They talk to you over and over again for years and years. We’ve been talking to some people, potential partners now for three years plus. We’re no deal. We still talk every couple of months because

Leo Wehdeking (18:45)
capital, serious investors, they don’t invest with you the first time. They talked to you over and over again for years and years. We’ve been talking to some people, potential partners now, for three years. Plus, no deal, we still talk every couple of months.

Because you gotta remember, they’re building in their head that you’re still around doing business. That means you’re pretty good. And the longer you’re there, and you’re doing better, it’s proving to them that they should invest with you.

Anthony Scavo (19:02)
You gotta remember, they’re building in their head that you’re still around doing business. That means you’re pretty good. And the longer you’re there and you’re doing better, it’s proving to them that they should invest with you.

Leo Wehdeking (19:13)
Exactly.

Anthony Scavo (19:14)
People today, Leo, are spoiled. They want instant gratification. They want it done the same day. It doesn’t work like that in real life. It just doesn’t. you know, they’re always… ⁓

Leo Wehdeking (19:17)
They want it done the same day.

Everything everything

takes time

Anthony Scavo (19:25)
Yeah, everything.

And it used to be maybe once in a while you’d hear that capital got really loose and did some deals right away. But that’s very few and far between. Like most of the things are about building a relationship, selling you to someone. They might believe in your business, but they don’t know you.

or they might not believe in your business. might be the opposite way. So you have to sell them on both. They have to love you in business and see that you’re the right guy to invest in because maybe there’s a better operator, maybe there’s a better person, maybe there’s someone who has more experience than you. You have to show them that you’re the best. So that could take a year, two years. And the other thing is get out there and meet as many people as you can because, you know, these guys, the one thing about

Leo Wehdeking (19:51)
you have to show them that you’re the best. So that could take a year, two years. And the other thing is get out there and meet as many people as you can because, know, these guys, the one thing about

Anthony Scavo (20:05)
investors and people that can help you. They change jobs a lot. So they might be a one firm one day, one firm another. And if you stand out to them and you make an example and you show that you’re a person to invest in, when they go to the new place where they have my authority, they might call you up to be their first client.

Leo Wehdeking (20:05)
investors and people that can help you, they change jobs a lot. So they might be at one firm one day from another. And if you stand out to them and you make an example, you show that you’re a person to invest in, when they go to their new place with their money authority, they might call you up to be their first client.

Correct, exactly.

Anthony Scavo (20:22)
Yeah. So it’s all about, it’s all about building and keeping those relationships. And listen, you know what I tell all my guys and people laugh about this and no one talks about it anymore? Just be nice.

Like, people like nice people. Like, actually be nice. And if you’re not a nice person, try to be nice, okay? Like, but most people, it’s pretty easy to be nice and be friendly with people and, you know, just be like that. you know, don’t be short, don’t be coy, don’t be like, don’t be fake. Be nice, be genuine. And that’s it.

Leo Wehdeking (20:35)
Yeah.

Exactly, exactly, don’t be fake.

When you’re nice, people feel it, alright? People feel it. And being nice opens doors for me. Being nice, being respectful, being decent. You can knock on doors, you can knock on doors every time. But if it closed, that doesn’t mean that you cannot be nice. You can still be nice. Yeah, I believe relationships are everything

Anthony Scavo (20:55)
Yes.

course.

Nope. Agree.

Leo Wehdeking (21:15)
nowadays in any space whether if it’s in real estate, construction, investment, trading, whatever I believe relationships are everything nowadays.

Anthony Scavo (21:26)
Yeah, I mean they are and and and you know the other thing too that you just I just want to tell your listeners they should also be prepared right if you’re go pitch someone or tell them about your business know your business and know what you’re selling them don’t don’t have like don’t have don’t go unprepared not have answers when someone asks questions because it just undermines what you’re trying to prove right away

Leo Wehdeking (21:46)
Correct.

Yeah, correct, correct. Obviously, to everyone that is listening, take Anthony’s word, okay? In everything that you’re doing in life, you need to be prepared. If you’re going to talk to someone, you need to know what you’re talking about. That’s 100 % truth.

Alright, Anthony, before we wrap up, if someone wanted to reach out to you, connect with you, maybe collaborate or learn more about what you’re doing, what’s the best way for them to reach out to you?

Anthony Scavo (22:14)
Yeah, you just email info @ BasisIndustrial.com. Info @ Basis, B-A-S-I-S, industrial.com.

Leo Wehdeking (22:23)
Perfect,

perfect. Well, listen, Anthony, I really appreciate your time, your story and your perspective. We need more people in this space who are doing it the right way. Thanks again for being here, man. I really appreciate it. And for those of you just tuning in, if you got value from this, make sure you’re subscribed. We got more conversations coming with operators just like Anthony who are out there building real businesses. All right. So we’ll see you on the next episode, guys.

Anthony Scavo (22:34)
Thanks for that.

Tags:

Investor Fuel

How Anthony Scavo Built 6M Sq Ft of Multi-Tenant Industrial & Self-Storage

Show Summary

Resources and Links from this show:

Listen to the Audio Version of this Episode

Investor Fuel Show Transcript:

Tags:

Ready to take your business to the next level? Take the next steps below