How to Find High-Growth Land Development Opportunities in Real Estate

Shree Kulkarni (00:00)
Yeah, a little bit, but I would tell you like our acquisition targets were the same. look at when I was in Cincinnati, we looked at suburbs that have high growth, high incomes. Like there’s two things that are super important real estate, right? It’s the people and almost more important than the number of people moving into an area. It’s the incomes of those people and their ability to spend.

Michelle Tack (00:05)
Mm-hmm.

Hi everyone. I’m Michelle Tack. am the host of the Real Estate Podcast today, Real Estate Investors in InvestorFuel.com. I’ve got a great guest that I think you all will enjoy, called Shree Kulkarni thank you so much for joining us today. I appreciate your presence. I know you’re a very busy man. For the folks on the podcast, Shree has a great deal of subject matter expertise in land.

Shree Kulkarni (02:15)
My pleasure.

Michelle Tack (02:25)
and specifically developing commercial projects such as grocery stores, et cetera. I thought it’d be worthy of him joining us to put the spotlight on him so that he can share his experience, but also potentially utilize us for some other ideas as in the team, our extended team here. So thank you again for being here, Shree. Let’s dive in.

I think our investors will be really, and our other folks will be really interesting to see your perspective on how things have changed recently in terms of acquiring land and the process and the length, et cetera. But first off, before we get started, would you share with us a short version of what your main focus is these days?

Shree Kulkarni (03:21)
Yeah, sure. So nice to meet you, Michelle. Thanks for having me on the podcast.

And the question was a short version of what our focus is,

Michelle Tack (03:33)
today

and what markets you’re operating in. Yes.

Shree Kulkarni (03:36)
Yeah,

okay. So we’re basically, I’m from the Midwest. I grew up in Indianapolis, moved to Cincinnati, and then subsequently moved to Tampa, Florida. So all of our projects are located effectively in those three states, Indiana, Ohio, and in Tampa, or in Florida, ⁓ and specifically in Florida, in Tampa. And we do all kinds of things. We’re an opportunistic developer. We end up looking at any and all types of projects. And so when we go look at land, we look at it,

as a blank slate. we’ll, for example, I bought a piece of property down here in Wymama, Florida, was 10 acres. ⁓ We didn’t look at it for a particular use. We said, is a great piece of land and a good market. What are the uses that could fit? It turned out that we landed on self storage and retail and medical office. yeah, it’s like a reverse approach to how we go and identify opportunities.

Michelle Tack (04:23)
Interesting.

That’s awesome. terms of what caught my attention was that your length of experience in doing this. And you’ve been, as we talked in our preparation for this podcast, obviously way pre-COVID, how things have changed post-COVID, how the money has changed in terms of the length of time for tenants to sign up.

challenges you may have come up with and how you’re pivoting to the new reality of, you know, your type of business today.

Shree Kulkarni (05:48)
Yeah, shoot. Okay, just a little bit of background on me just to give you some sense of like how long I’ve been in the business. I’m a chemical engineer, went to Purdue University, I got my law degree at Ohio State. I passed the bar in Indiana. And my goal was to do patent law, fell into real estate in 2000. I graduated in 06. So really 2007. So you know, you end up with this crucible, which is 08, which is the Great Recession going forward.

Michelle Tack (05:55)
Great, thank you.

WHA-

Shree Kulkarni (06:16)
that kind of helped me define my business and sort of make the most out of whatever talents I have. When I started in the business, as a small example, there was no defined, at least for me, my experience, there was no defined spread for tenants. So if I went out and bought a corner and let’s say you put a gas station there, let’s say it’s a Wa-Wa or whoever, Sheets today, Sheets tells you, I mean, they know to the T what their stores cost, right? They know.

with a really fine degree of certainty what the development costs are going to be on the horizontal side. And so what they’ll do is they’ll give you a return on your investment. They’ll say, okay, there’s a 7 % we’re going to give you a 7 % return on your cost. You know, in our credit cells at a five cap. So, you know, there’s a defined spread. When I started, there was no spread. It was basically whatever you could negotiate for the tenants that were still active. They were willing to go to

your site, if they could afford it and sort of things sort of limped forward for many, years. Why do I say that? The tenants are becoming very, very sophisticated, right? Now we’ve had basically decade or maybe even longer than a decade of really just a trajectory of up, up and to the right. And so like they’re getting very specific about their needs. And then you have this whole section of land sellers.

which is who I end up dealing with because we’re land heavy. And they’re not always that sophisticated. So they hear the noise, they hear the stories, they hear the money potentially, but they don’t know how much work it takes. And so it’s still very hard to bridge the gap between a seller and how much time I need to get a deal done on some of these sites.

Michelle Tack (08:00)
Yeah, that’s that, know, totally understand that in terms of, know, what do you know, what are you looking at now in terms of your goals for your business? How has that changed? you know, how are you dealing today with, a bit of uncertainty, in terms of the economy?

I know that you mentioned that deals are taking a little bit longer than they had in the past, but how are you overcoming that?

Shree Kulkarni (09:03)
Well, I just think you just have to work that much harder. Like financing is harder. Again, the tenant piece is harder, but like we talked about before, you start these projects years ago. you know, like when you start rates, maybe at 4%, now they’re at six and a half where all that impacts your pro forma meaningfully on large deals, but you don’t have a choice unless it, you know, for me, ⁓ we just end up moving forward and

Michelle Tack (09:24)
Right. Yep.

Shree Kulkarni (09:33)
And I don’t know, you just kind of work through the pain and get it done. In terms of what projects we’re focused on, we really have four big projects. We have two grocery anchored mixed use developments. They’re a total of 110 acres between the two, one in Columbus, one in Indiana. And then we have two projects down here that are, one’s a,

Housing development and one’s a mixed use. I think I had mentioned it’s self storage and retail medical office project.

Michelle Tack (10:05)
Right. was interested in the self storage one a little bit because you sort of, said you sort of did a little differently. You got the land and then found the business, right? Versus intentionally saying, Hey, we’re going to do a grocery store, which has pretty specific, you know, um, mean, I’m not sure storage does too, but grocery stores clearly have very specific, you know, where they need to be demographic and all that.

Shree Kulkarni (10:15)
Totally.

Michelle Tack (10:31)
So I guess you have warped a little bit, right? In terms of some of the different things that you’re doing, adaptability, seems like even though it’s a long-term business that you were able to incorporate in some of the things you’re doing today.

Shree Kulkarni (10:44)
Yeah, a little bit, but I would tell you like our acquisition targets were the same. look at when I was in Cincinnati, we looked at suburbs that have high growth, high incomes. Like there’s two things that are super important real estate, right? It’s the people and almost more important than the number of people moving into an area. It’s the incomes of those people and their ability to spend.

Michelle Tack (10:50)
Mm-hmm.

Shree Kulkarni (11:08)
I mean.

Michelle Tack (11:09)
Mm-hmm. Mm-hmm.

Shree Kulkarni (11:10)
You can sort of boil down a really complicated business into looking for properties and markets that have those two things. Frankly, on a complete side note, like that’s what I tell all the young people that ask me advice. I grew up in, let’s call it the Midwest, Cincinnati. I wish somebody would have told me at 26 years old to move. I wish, I wish somebody would have said, Shree, you can do exactly what you can do in Washington, DC or Charlotte.

Michelle Tack (11:26)
Mm-hmm. Yep.

Yep.

Yep.

Shree Kulkarni (11:40)
or at

Nashville or a Tampa, I would have been worth a hundred times, not because I’m any smarter, right? I’m the exact same person.

Michelle Tack (11:43)
Mm-hmm.

It’s opportunity,

Shree Kulkarni (12:32)
opportunity. That’s it.

Michelle Tack (12:32)
right? Yeah.

Well, look, it’s been a pleasure to have you on the show. I very much appreciate your time for putting folks that may want to contact you either to invest with you or to learn from you. Could you provide three things, the name of your company, your email address, as well as your cell phone or whatever mode of, know, whatever phone number that you’re

Accessible by.

Shree Kulkarni (13:00)
Yeah, yeah, yeah. company name is Kulkarni Properties. That’s the company that does business in the Midwest and we have Serenity Capital Management, which is the company that does business here down in Florida. My email address is my first name, [email protected].

Michelle Tack (13:16)
well look for those listening continue to. You know, absorb this information. We have a number of podcasts from a variety of different operators like Shree in terms of the amount of experience they bring to the phone. So make sure you’re subscribed and we’ll see on the next podcast. Thanks again Shree

Shree Kulkarni (13:37)
Yep, thank you.