Habits and Hustle - Episode 569: Richard Baker: Entrepreneurship Lessons From Billion Dollar Deals and Bold Risks

Episode Date: July 7, 2026

Are you actually creating opportunity, or are you waiting for someone to hand it to you? A lot of people talk about being entrepreneurs, but very few are willing to do the unsexy part: get on the plane, sit in the waiting room, build the relationship, ask the better question, and stay in the deal long enough to find the angle everyone else missed. Richard Baker built his career by doing exactly that. He did not rely on perfect timing, endless capital, or permission from people at the top. He used structure, relationships, leverage, and speed to turn overlooked opportunities into billion-dollar deals. This matters because the future of work is changing fast. AI is reshaping business, companies are cutting jobs, and more people are going to have to learn how to create value on their own. Richard's philosophy is simple: stop chasing safety, start thinking like an owner, and learn how to manufacture your own luck. The people who win are the ones who know where the ball is going before everyone else starts running after it. Richard Baker is a real estate entrepreneur, dealmaker, founder of Baker House 1921, and longtime educator through Cornell's Baker Program in Real Estate. He has built one of the largest privately owned shopping center portfolios in the country, developed 50 Walmart-anchored shopping centers, bought iconic retail brands including Lord & Taylor, Saks Fifth Avenue, Hudson's Bay, and Neiman Marcus, and structured some of the most fascinating retail and real estate deals of the last two decades. In this episode, he breaks down negotiation, risk, AI, entrepreneurship, decision-making, and why the biggest opportunities often come from seeing what everyone else is too busy to notice. What's Discussed: (01:27) How Richard Baker built one of the largest privately owned shopping center portfolios in the country. (07:37) The family philosophy that taught him how to make money with no money. (11:13) What intellectual leverage means and why he uses brains, relationships, and structure instead of cash. (12:15) Why real opportunity comes from getting off your ass and showing up in person. (19:23) How the power of yes helped him buy Lord & Taylor for $1.2 billion. (23:34) Why big companies miss details and how that creates openings for entrepreneurs. (29:21) Why speed, risk tolerance, and fast decision-making matter in business. (39:17) How he turned the Zellers deal into a bidding war between Walmart and Target. (52:40) The difference between a zoo bear and a jungle bear in entrepreneurship. (01:02:39) Why luck is something you manufacture through preparation, strategy, and timing. (01:07:21) How Richard uses AI every morning to think, plan, and increase productivity. (01:31:38) Why courage, pulling the trigger, and structuring risk are essential for entrepreneurs.   Thank You to Our Sponsors! Magic Mind: Head over to magicmind.com/jen and use code JEN at checkout. Pique: Go to piquelife.com/jenniferrsd to get 20% off for life plus free gifts Momentous: Ready to try supplements that actually do what they claim? Head to livemomentous.com and use code JEN for 35% off your first subscription.  Therasage: Visit therasage.com and use code JEN to get 15% off your order. Your skin Prolon: Prolon is offering listeners 30% off sitewide plus a $40 bonus gift when you subscribe to their 5-Day Program! Just visit prolonlife.com/JENNIFERCOHEN and use code JENNIFERCOHEN to claim your discount and your bonus gift.   Find more from Jen Cohen: Website: jennifercohen.com Instagram: @therealjencohen Books: jennifercohen.com/books Speaking: jennifercohen.com/speaking-engagements   Find more from Richard Baker & Baker House:  Website: bakerhouse1921.com Instagram: @baker_house1921   

Hi, guys, it's Tony Robbins. You're listening to Habits and Hustle. Crush it. Hi, everybody. We have welcome to another episode of Habits and Hustle. I have a funny guest on today. Not really that. Well, I don't know, but you seem like you're very, you've got a lot of levity. His name is Richard Baker. And I would say he's going to probably give you a better definition of what he does. But let's just say he owns and runs the largest real estate private company in the country. One of the largest private owners of shopping centers in the United States. Let's leave it at that. Let's just say he's extremely successful in the real estate space.

And we're going to learn a lot from him on negotiation, deal structure, like sourcing opportunities, seeing all the things business. So before I like make more of a mess of this, why don't you describe in a few sentences who you are and what you do? Sure. So basically, I think of myself as a small-time entrepreneur. And I just did a lot of deals over and over and over. So when you added all up, it turned out to be a big thing.

I started out working with my father in the real estate space. And there was this company that had no stores east of the Mississippi called Walmart. It was a long time ago. And I said, wow, I should go visit these people in Bentonville, Arkansas. So I got on a plane and I sat in the offices for two days of Walmart. their real estate offices were like trailers, literally trailers. And I ended up meeting them. And we had a good time and got along.

And we developed a relationship, 21-year-old Richard Baker and the team at Walmart. And eventually I started developing Walmart anchor shopping centers throughout the eastern portion of the United States. And I ended up building 50 Walmarts, 50 Walmart shopping centers, of which we own all of them still today. And we lease them the properties. and all of those development deals required zero cash. So we structured every deal where we were able to borrow all the money from the bank. So no partners, no investors, and we use leverage in order to do that. And that's one of the themes that we talk about a lot today.

And then from that, I went on to acquire sort of end-of-life department store chains. So imagine Lord and Taylor in the United States, Hudson Bay, in Canada, Germany, Belgium, the Netherlands. All over the world? All over the world. Hudson Bay, like I'm Canadian, so that's how I kind of got hooked on it. Like, wow, you like, I remember, I grew up with that. I bought the Hudson Bay Company in July 19th of 2008, about five minutes before they were going to go bankrupt because the financial crisis was hitting.

And I bought it and merged it with Lord and Taylor, which was another sickly U.S. department store chain. and we kept both of those businesses going for, you know, 15, 16, 17 years longer than they otherwise would have. And, but this is a difficult world. We monetize those businesses. We created as much value as we could. We kept as many people working, as many vendors, you know, supplying inventory and going. But at the end, those two particular businesses got put to bed. Yeah.

And no longer exist. But wait a minute. So when you bought, so you bought Lord and Taylor first in, in 2006, right? Yep. Wasn't that for like a billion two, right? I bought it for $1.2 billion. But when I bought it, it's kind of a funny story, I bought it as a real estate developer.

So real estate developers don't normally buy $1.2 billion companies. Right. And. Well, let me say this, because I think this is what's going to, was confusing to me initially. And you own both. You owned the luxury retail market, sacks and Lord and Taylor are going to get into that. But you also own the real estate that. that it's in. I started in mid-tier operating companies, and then I moved into, as you said, luxury

retail companies. But all of it was based on real estate. I only bought the businesses in order to capture the real estate. And when I bought all of these businesses, I financed them 100% of the purchase price or almost 100% against the real estate. And then we monetized the real estate and created value. you and did everything we could to keep the operating companies together and as strong as possible. And I guess January of this past year, after having put Neiman Marcus, Bergdorf-Goodman,

Sacks, and the IP for Barney's all together in one entity, we had a run on the bank, and we made the decision, I made the decision that we should bankrupt the company in order to save the company and to save actually multi-brand luxury in the United States by bankrupting the business, We got them together. We got synergies. We saved all the jobs or most of the jobs. We saved the relationships with the vendors. And now they're coming out of bankruptcy this week.

And they'll be strong and successful and merged together. So our children and our grandchildren, hopefully, we'll still be able to shop at Neiman Marcus and Saxford Avenue and Bergdorf Goodman as we go forward. Okay, wow. Okay. So now we can start from the beginning. Now we can reverse engineer this. Okay.

So in 2006, you bought Lord and Taylor. You already had these. So let me just get this straight. So your father was doing this. Your father brought you along to this meeting at Walmart. No, no, no, no. Okay. No, my father, so you want to go way back?

Let's go way back. You want to go way back? What I want to get to is that like, did you start, like, this was a family business that you then took and then made it into like a monster business. Like, how big was it before you got involved? Yes. Because did it take money to make money? Did you have a little bit? Like, how did you do this?

Okay. So I'm going to force you to go way back. So the story is that my grandmother, Sylvia, came from Poland in 1921 on July 4th through Ellis Island, didn't speak any English. And she ended up marrying my grandfather. They moved to Hoboken and where my grandfather was a lawyer. And my grandmother was a very bold, entrepreneurial lady. and she lived in early 1930s in Hoboken, and she was aggravated and frustrated

because these beautiful homes, limestone and brownstone townhouses that used to be filled with rich families by the early 1930s, 1933, the kids were breaking the windows and they looked horrible and they were all empty because those folks had lost all their money during the stock market crash.

And so my grandmother, because she, She had get up and go kind of way about her, went to meet the bank that owned most of them and said, what are you doing? This is terrible. And the bank said, well, there's nothing we can do. No one wants them. And they're zoned for single family. So she said, well, why don't you get them rezoned for multifamily?

And they said, well, why don't you get them rezoned for multifamily? So she took a purchase agreement to buy several of these houses. She was friends with the mayor's sister. She went to the planning board. she got approvals to have them converted to multi-family. She used friends and relationships, and she renovated them and leased them up, and she became a real estate entrepreneur,

and she was the first person in my family to understand how to make money as a real estate entrepreneur with no money. And that is the philosophy of the family. My father then went into the real estate business, ironically with my mother's father, another family dynasty kind of story. And my father and my grandfather started building

shopping centers in 1959 and into the early 1970s. I, as a child, my father would take me to go visit all of these properties and I would see what was going on and everyone would talk to me about real estate because I enjoyed it and it was interesting to me. But I had a vision and my vision was op-go prop-go. I wanted to own the stores that sat in the real estate and I thought that was fascinating. So I wanted to own the supermarket inside the shopping center. So I decided I wanted to go to the Cornell Hotel School to learn how to be an operator of businesses. Because there's tremendous value if you can be an operator of businesses and an owner of real estate. And that's my sweet spot that I find value and find interesting.

So after graduating from the hotel school, I was going to go start a prototype for a restaurant chain. And my father's like, oh, no, you should come work with me. We have seven people in an office. We have an accountant, a lawyer, and we have properties, and you'll learn a lot more listening to me every day, and you should do this. I said, well, I'm going to do everything. I'm going to do the restaurant,

and I'm going to learn from you and do all of that. And so I graduated from Cornell. The next day, I went to work with my father. My father gave me a little office and said, do anything you want, but don't sign your name to anything and don't spend any money. because the philosophy in my family, would I have been brainwashed,

breakfast with my grandparents and dinners and my parents, we're not investors. Anybody can invest money and make money. We're into how do you make money from no money? We call it intellectual leverage. We use our brains to create value, not capital. So the idea was figure out how to make money in the real estate space without any money.

Okay, well, how do you do that? It's not so hard. So what I did was I developed some relationships with tenants, people who were looking for new locations and people who had credit. And of course, the first one was this great company that had no stores east of the Mississippi called Walmart. No one had really heard of them much in the East Coast. So I went to Bentonville, Arkansas, back, by the way, that's how the world works. Even today, you get off your ass and you go someplace. If Jen calls and says she has an opening, you get on a plane and you go visit Jen. You don't text it and phone it and email it and zoom it and you go do it. So I got on a plane.

I flew to Bentonville, Arkansas. Or L.A. Or L.A. in this case. But in that case, I flew to Bentonville, Arkansas. I sat waiting in this waiting room in this trailer for two days. And eventually I got to meet with the folks. And I was an energetic, smart, 21-year-old. And I knew all about the locations and where they would want to go.

go on the East Coast. And they said, we'd love to do work with you. Find us the right sites. So I left Bentonville. I went back and I began to, I created maps. In the old days, we had these paper maps and we had little pins. And I figured out all the county seats. I figured out where all the competitive retailers were. And I figured out before Walmart figured out all the places they wanted to go. Then I went to those towns and I built a little team and we entered into purchase agreements to buy sites large enough for Walmart anchored shopping centers, but in towns where there was only one site left, and in towns where they would give me a free option. So now you say, well, why would anyone give you a free option? Well, so here's the conversation. I meet with a fellow by the name of

Mr. Levison. Levinson. Mr. Levinson, I'd like to buy your vacant shopping center that's broken down in Gloversville, New York, and you want to sell it for a million dollars. I'll buy you. I'll buy. it, but I need 12 months to get governmental approvals because I'm going to build a Walmart Anchor Shopping Center. And it's like, great, I'd like a 10% deposit. I'm like, I'm not going to give you any deposit. And he's like, well, why are you not going to give me any deposit? Because I have the relationship with Walmart and I have the expertise in order to get those

approvals. So if you want to actually sell your property, I'm the guy. If you want to try to sit here in your office and try to call the guys from Walmart and make the deal yourself and then you negotiate the deal with them, good luck. So you said, okay, I get it. I'll give you a free option and you'll spend the money to get the approvals, which I did. And when you get all the approvals, you'll close. Sure.

So now I have a free option, no money. I spend a little bit of my time or a lot of my time, a little bit of money to get the approvals. I signed a deal with Walmart. I signed a deal with the Hanford Brothers supermarket chain. I made a deal with McDonald's. I put a Greek restaurant somewhere else. And I did it all efficiently. No brokers and no middlemen.

and did the construction with our own construction company and our own people. And I produced a shopping center package that was financeable, credit tenants, all the approvals. So I went to a local bank. I borrowed the money. I got... But they gave you the money based on what your company had. No. No.

Okay. Only a non-recourse loan against this one particular property. And how did they do that? I had signed leases with credit tenants. I had all the governmental approvals. They did something they called a construction loan, and they funded the money as we spent it. And they funded 75, in those days,

75% of value when it was done. They funded in advance. So 75% of value when it was done was more than 100% of cost. Okay? I did that 50 times over and over and over. So no partners, financed all the deals. We still own all the shopping centers,

together. So the Walmart ones, you don't own Walmart, obviously, but you, we own the, no, I don't know Walmart, but we own the buildings. We own the buildings. We own the buildings. And we own all the tent. The real money was made in the 20,000 square feet of shop space next to Walmart and the out parcels. The deals I made years ago for $15 a foot are now renting at $50 and $60 a foot. Wow. But then how did you go from doing the strip mall situation to then transitioning into these luxury real estate places? Okay. So, so as I did. the shopping center story for 17 years. Now it's 2005 and Walmart's not so popular and the environmental issues of getting approvals for large retail. It was very getting very hard to do the type of

transaction I had done. Let me ask you a question. I'm going to keep on interjecting here. Good, good. So until 2005, you were basically, you owned mostly just the real estate. You weren't owning obviously. Only real estate business. So only in 2005 did you switch and go into then, purchasing the luxury, the operating company, and in addition to the real estate. Yes. Gotcha. Okay, go on. Okay. So now, now by 2005, I'm like, wow, this is too hard. I can't continue to develop real estate like this. I need a new way of thinking. And the new way of thinking was to buy these old dying department store chains that owned a tremendous amount of real estate. Wait, hold on. I've got another question. At this point,

is your dad still involved? Is your brothers or sisters? Are you by yourself? Like, if it's a family business. Who is doing it with you? I have, I have a brother and two sisters. None of them are interested in the family business, not involved. My father was great, and he and I had great fun and work together, you know, until he passed away in 2020. And, um, so you and your dad basically, so basically my dad and I. Got it. Okay. Okay. So now in 2006, uh, late 2005, I have this idea that we're going to buy operating companies that own real estate. And what I find out is there's a lot of retail chains that own a lot of real estate that's worth more than the entire value of the company. So the first one was Lord and Taylor. So first one that we ended up

buying. We worked on some other ones. Lord and Taylor was owned by Macy's. They wanted $1.2 billion for the company. They owned 49 pieces of real estate. And they weren't really interested in talking to Richard Baker. They had huge private equity firms, KKR, and all these guys, and no one wanted to pay up the $1.2 billion. So I figured out through a friend had to get a meeting with this fellow by the name of Ron Tyso, who was the vice chairman of what was then called Federated, and I went to meet with him, and I said, I'm a real estate guy. I want to buy Lord and Taylor because I think I can properly monetize it with real estate.

He said, well, you have to pay $1.2 billion. I said, I'll pay $1.2 billion, but I need $1,000, 20 days in order to get the deal, you know, in order to close. Done. Did you try and negotiate with the guy? I didn't negotiate with him. Sometimes, Jen, you have to use the power of yes. Yes is a really powerful thing when you use it the right way. So I made a deal with this fellow to buy this chain for $1.2 billion.

And now I have... Wait, finish that. Why? Why is this particular situation you do not negotiate? Because I believe the real estate was. worth $500 million more than the $1.2 billion. So real estate is not an efficient business category. When you buy IBM stock, everyone pays the same price

for IBM stock every day. But real estate is very inefficient. No one knows what one piece of property is worth. And some people have a great skill of understanding and some people don't. And you have to be bold sometimes and go with your gut and make it happen when you know. And some people will.

we'll never know and they shouldn't play, but I knew and felt confident and had conviction that the value of the real estate assets that Lord and Taylor were worth $500 million more than the $1.2 billion. Based on what? Based on a seven months of analysis that I did prior to going in and talking to this fellow where I went and evaluated every property, being the guy who developed Walmart centers and Target and knew about JCPenney's and all these different retailers, I had a very good understanding of what these properties were worth. Why do you think he was, why do you think he

made it one point two? Why did he want one point two? Because it was a big company and they told their shareholders they were going to sell it for $1.2 billion. They weren't going to sell it for less. The other people who were bidding on it were people who were bidding on an operating company. I didn't look at it as an operating company. I was bidding at it on it as real estate. So to me, the real estate was worth a lot more. So now I have a, you know, I'm a real estate guy. I got a real estate lawyer and I got another fellow who I brought in to help me with the operating company. And I'm negotiating day and night on this purchase agreement to buy this, you know, 40, it was a 51 store

chain, 49 pieces of real estate. And I'm talking to my father every night. And he's like, what are you doing? We're in the shopping center business. You know, we build shopping centers for $10 million or $20 million or we just build one for $100 million. we don't buy $1.2 billion operating companies. What are you doing? And they're not going to enter into a purchase.

Every one of those shopping centers I developed, I had a single-purpose LLC that had no assets, and I got a free option, free purchase agreement, to buy that shopping center. He's like, they're not going to let you, they're not going to sell you Lord and Taylor, like it's a vacant piece of farmland with a no-asset, single-purpose entity.

They're represented by Goldman's, Sacks, J.P. Morgan, and Scadden, ARPs. That's not going to happen. I'm like, relax. I'm going to keep going through the process here. The entity I was using was something called NRDC Equity Partners Fund Seven. And that was what was in the papers. I made it up. It was just a single-purpose entity. And we're negotiating and we're negotiating. One day in, I guess it was late September in 2006, I actually was late August 2006. I, 12 midnight, Times Square, I go to a pay phone. That's how old I am.

And I call my father and I say they signed the purchase agreement. So federated, this many, many tens of billions a dollar company represented by all of these folks, signed a purchase agreement with NRDC Equity Partners Fund 7 for $1.2 billion, gave me 120 days. never asked for my financials, didn't ask for a deposit. What happened was they just thought I was one of these big private equity firms because we have a decent profile and they just assumed they did none of the work, which by the way, for all of your entrepreneurs listening, that's how life is sometimes. The big people tend to be lazy, maybe not as smart as you imagine they are, and that's where

your moment comes and that's where your opportunity is. And that's where my opportunity was. So now it's midnight. By the way, say that again, because I talk about that all the time. It's always these people that you think are so this and that. They're not that smart. They're not that smart. And you've got to go for it.

Yeah. And by the way, so you'll get slapped down and slap down and slap down. I fail more times. But every now and then I get away with it. I win. I get it right. And then I end up talking to Jen about it because it's epic. But Jen's not asking you about the 90 things I got wrong.

Oh, I'm going to. You haven't given me time. I got plenty. I'm going to out-talk you so you'll never get to the bad thing. So now my father says, well, I guess that's great, but where are you going to come up with the $1.2 billion? I'll figure that out tomorrow. So now go home, go to sleep, go to the office, and I write up on my whiteboard a new structure, L&T, Lord and Taylor holding company, Lord and Taylor Property Company, Lord and Taylor Operating Company. The company had $120 million of EBIDA.

So I moved 80 million of EBITDA to the property company. So the operating company would pay rent to the property company. The operating company would have $40 million of EBIT after paying rent. So now I had a real estate company of $80 million of EBIT. So now it was a booming period. It was 2006. The wonderful banking firms of Lehman Brothers, Bear Stearns, and CIT before they went bankrupt the first time, lent me, agreed to lend me $1,175 million to buy Lord and Taylor for $1.2 billion.

So now I go back to my father and we had two partners, fantastic partners, Bill Mack and Lee Nybart. I went back to my three partners and said, we need $25 million in cash to buy this $1.2 billion business. And my father was like, oh, we don't do that. You know, we use our brains. We don't use our cash. We pile up our liquidity. We don't use our liquidity to invest in deals. And I said, well, this is a pretty unbelievable situation. You can control $1.2 billion with $25 million. So very grudgingly, my father agreed. And I had just made some money on a refinancing. So I put that money into the deal. My father put some money in Bill and Mac and Lee and Ibar put some money in. And now we owned Lord and Taylor for $1.2 billion.

And the idea was to immediately break it up into pieces and sell off the pieces and make a profit. What kind of pieces? Can you tell our audience? Yes. Basically, we were going to sell a package of stores to Walmart, a package of stores to JCPenney's, a package of stores to Target, close it down, and be done. That was the business plan. Okay. But on the way to the closing, a strange thing happened, Macy's had decided to rebrand all the stores on the East Coast.

Macy's, if you recall, and they were Filene's basement. They were a Filene's department store, and they were all of these different nameplates. No, who else? Because Filings is very much like in New York. In Chicago, it was Marshall Fields, and there were all, and there were marshes in Connecticut. They took all these regional name plates, and they turned them to Macy's. When they did that, some of the customers said, I don't want to shop at Macy's. I'm going to try Lord and Taylor.

So sales, dumb luck, sales at Lord and Taylor, start going up by 10% right after, right before we bought the company. So I'm like, how hard could it be to run a department store chain? How about we run it instead of liquidating it? So now we begin to run the business and- Me being who, you? There was a great CEO at the time by the name of Jane Elfers, and she was in the chair and she had a team and we began to operate this business. I became the chairman. So now I went from running my family real estate business that had 40 people to being the chairman of Lord and Taylor, which had 10,000 employees. And I went through the business with Jane Elfress, the CEO, and I used a perspective and a brain of a real estate brain instead of an operating company brain. And if you could imagine the risk reward and the perspective of a real estate entrepreneur versus an operating company entrepreneur,

are very different. Tell us. I walked through with Jane the first day, and they had these jewelry cases. And inside the jewelry cases were the nicer jewelry. And on top, they had these, like, wire things where they hung all the cheap jewelry. And it was so much cheap jewelry on the top,

you couldn't see the good stuff in the case. So I said to Jane, I said, well, what would happen if we had less of the cheap stuff so you could see the good stuff? It would elevate the offering. And people would think about, She said, yeah, you're probably right. We got carried away.

Too much cheap stuff. It turned, and we could do that. I said, well, how would you execute that? Well, we would reduce it by 10%, reduce it by 40%, test it, do 18 stores, do another 18 stores, and over the next 20 months, it would eventually get done. I said, forget that. What are we going to lose? Immediately sell off the jewelry, put two on each case, and upgrade the jewelry and just do it

everywhere. Next. We walked to the next department. And so I was willing to take more risk on things that I didn't think had a lot of downside risk to them. And also, you also speed. You didn't waste a lot of time like it was efficiency. Oh, yeah. Like this is like that's a good and one. Okay. Having been 20 years later now, good and bad. So I am super fast. I make decisions, but I'm not using all of the available analytics that you could use in making these decisions. I think I made many, many, many, many of the right decisions. And the weight of going slow would have been so bad that even the decisions I made that were wrong, I did the right thing.

But I move very quickly. I make decisions. They're not always the right decisions, but we make them work. Do you think that's probably one of a top skill that people need to have to be successful as an entrepreneur? Absolutely. And, you know, being an entrepreneur requires courage. So you have to. And I think it took me a long time, probably too long, to have enough courage to push back harder on the operators than I did. And because I know the business. And it took me a while to learn it. And I wish I had been, had more pushback earlier on, more confidence. So did you naturally have a lot of these skill sets? Like, because you could have easily. excuse me for saying this, but, you know, given your bad, like your generational situation, you could have been an Epil baby, but you weren't. Do you know what an apple baby is? Yeah. So, so, so look, I'm a, I'm a worker bee. So, you know, I'm in the trenches. I'm in the

trenches. I'm out there doing it. And is that a nature, do you think, do you believe in nature versus nurture? Like, because that either you have, like, it sounds like you have an in, like, it's in your DNA to be very... I totally believe that all of us have certain things. And by the way, the worst parents could mess you up a bit. And the best parents on earth can have a kid that just has the wrong DNA pieces. And no matter... And you're like, why is that kid such a screw up? The parents are so lovely in the... So we all come out the way we come out. And so I'm a crazy entrepreneur. I run around do different types of businesses. I then went from Lord and Taylor

and I bought the Hudson Bay Company. Wait, say on Lord and Taylor. I want to get finished with this. There's no finishing. It went on and on and on. Did you make money off of Lord and Taylor? We made a lot of money on all the ventures that we did. I'll give you a little example.

In the end, we sold the building on Fifth Avenue to we work for $850 million. But before they finished the full transaction, they had problems and I flipped the building to Amazon for $1.2 billion. So we did, you know, we did very well in that one building and we had 48 other buildings, some of which we sold for $100 million and $50 million. And we made money in all those years during the process. So we did very nicely in each of these transactions.

I would say so. But wait a minute, because that, I know about that deal. You sold the, wasn't the sacks, the sack. The Lord and Taylor building on Fifth Avenue. That was the one. Okay, so that was in what year did that happen? That happened in 2000 and like 16. In 2016, you sold that building for a billion to.

I sold the building for 850 to Adam Newman at WeWork. At the closing, Adam showed up $150 million short. So he says to me, I need you to give me a preferred equity investment of 150. So I go to my father and my partners and I say, what should we do? He doesn't have the money. And they're like, who cares? The building isn't even worth close to $850 million. So you'll take a piece of paper.

And even if he never pays you the money, you still did better than what the building was worth. Wow. Okay. So then he closes on the building. I have a $150 million preferred equity piece. So when he had his problems, he's a brilliant guy, by the way, whatever. But when he had his problems, I was in the mix because he, owed, I was the preferred equity.

Yeah. So when it came time to making the deal with Amazon, me along with a series of folks from WeWork helped get that deal done. Now the 150 was worth more because they sold the building for a billion to $552 to Amazon. Who, by the way, that building's worth double today. And Amazon killed it, made over a billion dollars on that one deal. Wow. So then that's just that one building from Lord and Taylor, right?

So how much overall cumulatively did you think you made from that? a Lord and Taylor deal. We did just fine. Well, no, I want to give people some perspective. It's complicated. It doesn't have to be exact. We invested $25 million. We got all our money back in 18 months.

And then we made a lot more. So the whole deal was 1.2 back then. Right. And we put in $25 million in cash, which we got back a year and a half later. The problem is we just kept, I got my money back. Now I just kept merging. I never put any more money in. Now we merged Lord and Taylor.

with Hudson Bay. And now get to that. Okay. So how did that happen? How are you finding these opportunities? Like, are you just, do you have a knack for like sourcing and finding these opportunities?

Yes. How do I do that? Because I get off my ass. I meet people. I talk to people. I'm inquisitive. I learn. And each of these companies I worked on for years and thought about it,

put the pieces together. And Hudson Bay was really poorly operated in Canada. and the Lord and Taylor team was strong. So I was able to buy the Hudson Bay company and you and merge it with the Lord and Taylor company, which was crazy merging a U.S. Department Store chain with the Canadian Department of the chain. I'm going to ask you about that. How did you do that? Because Hudson Bay wasn't in the U.S.

And how much did you buy Hudson Bay for? Okay. I bought Hudson Bay and closed on July 19, 2008, right before the Great Banana. crisis and I bought the company for one point, approximately one point two billion Canadian, which was at par at the moment, at that moment. And the company would have been bankrupt three months later with the pandemic. But because we had the support of Lord and Taylor to help it get through that period, we were able to get through the financial crisis. What happened was I took this company that they were running atrociously. I broke it up into pieces. I got great

teams to run the Bay Department store, the Hudson Bay Department store, the Zellers, the fields, and the different operating companies that they had. When I bought the Hudson Bay Company, they had over $7 billion in sales and 72,000 employees. So on July 19th, I had created a new company called the Hudson Bay Trading Company, which was a holding company that now owned Lord and Taylor and the Hudson Bay Company. At that point, I became what on, unfortunately is the last governor of the Hudson Bay Company, which is the first governor was in 16, I'm losing my mind there, 1650, 1662 was Rupert was the first governor, continuously operated. You learned in school operating company.

And so now I was the governor of the Hudson Bay Company. We had, I don't know, 80,000 employees at 42 years earlier. and it was all screwed up. And because this company was terribly run and now I merged it with the other companies. I took the top, merge the two companies, of the top 100 executives, we exited 97 of the top 100 executives

in the first 90 days. Just imagine that crazy thing. And we brought in new people. We broke the company up into different pieces. We got it stable. We had one guy by the name of Don Watros, who was our chief operating officer, saved the company. He put us in a position from the closing in July

till October of that year, where he cut $500 million a year of operating expense out of the company. The good thing about buying really badly run companies is often there's a lot of savings you can make. And he cut that and the companies ran better without that expense. So he got us through.

Then a crazy thing happened. We got through the financial crisis. now it's early 2010. And actually, yeah, it's actually September of 2010. And I get a phone call from the CEO of the Walmart REIT. And he says, I have, can I come and see you, Richard, in New York with the CEO of Walmart Canada? And I said, sure. I knew something was crazy because Walmart had never, ever come to visit me.

You always went to Bentonville. never came to visit you. And here they were coming to New York to visit me. So they came and they said, Richard, we hear that you're negotiating a deal with Target to buy Zellers. You remember Zellers well. And Zellers was like 400 stores of kind of like the Kmart of Canada. And I said, it is the Kmart of Canada. It was the Kmart of Canada. So I said to them, well, I can't really discuss that with you. But why would you want it? You have all those stores. What he said obtusely was we want to keep Target out of Canada so we can own all of Canada and we'll take all the stores.

So he said, well, how much do you want for it? I said, I would like $2.2 billion. He said, what are you talking about? You just bought the entire company. This is the crap. You bought the entire company for $1.2 billion two years ago. How could you possibly want $2.2 billion for this? I said, well, I'm not selling you an operating company.

I'm selling you a platform of real estate. estate. So even though Zellers didn't own any real estate, they had lease control at very low rents because it had been so many years. So I was selling Walmart access to the Zellers leases and their average rent was $5 a foot. The market rent was $12 a foot. So if you took the $7, multiplied it by the square foot, used the 6% cap rate, it came to $2.2 billion. So he's like, well, that's a lot of money. I said, think how much money you'll lose when tar. comes to Canada and does $5 billion and takes away all your growth in Canada. He said, okay.

So I said to them, but I want you to know I'm going to have a process. There's going to be Target and Walmart and there's going to be one point of discuss, one point of contact me. No break brokers, no intermediaries. I am going to talk to the head of mergers and acquisitions and the CEO of Walmart Canada. And I'm going to talk to the guys at Target and there's no one in between us. and whoever comes in and signs a no-out deal, hard deal for the highest dollar amount, gets it. Okay. So they leave. And what do I do next? I pick up the phone and I call Target

because I wasn't working with Target and I get the head of real estate on the phone from Target and I say, Scott, if you guys ever want to come to Canada, this is your last chance because I have a buyer for Zellers and it's a perfect fit for Target and you need to let me know whether you're interested. He said, okay, you know, we've looked at it over the years. I don't know. I don't know. I said, great. Called me back two days later and said, the CEO of Target wants to meet with you. Can you come and see us tomorrow? I said, yes. I flew to Minnesota, sat with the CEO and the CFO of Target and the head of real estate. And they said, we're interested in buying it, but we want you to exclusively talk to us.

I said, I can't do that. I have another buyer, but I will tell you everything I tell them. It'll be an open process. And if you want to do it, then you'll do it. And they said, okay, we want your, these 50 stores, the best 50 stores at a 400 and we'll pay you $500 million. I said, you're wasting your time.

Forget about it. The business is worth $2.2 billion. And I'm not selling you those stores for $500 million. I got on the plane, flew home. Then Walmart, Walmart bid $800 million. Then a Target came back and they bid a billion dollars. And then Walmart bid a billion two. Now it's Christmas time.

I always thought I was going to make a deal with Walmart. How could Walmart possibly let, and I'm a Walmart guy. And I knew everybody. How could this possibly go to Target? Now it's mid-December, about to go away for Christmas. And I have a deal with Target for $1,850 million, not including the inventory. So that would basically be a $1,850 million profit after all the expenses. And I shake hands with Target. Walmart is kind of not responding because I don't think they

believe the number when I told it to them. I was dealing with the CEO and CFO of Target. I was dealing with the second person at mergers and acquisition at Walmart. That's a lesson. So the people from Target say to me, we're ready to get a purchase agreement done. I fly to Minnesota with my same one real estate lawyer and my operating guy. And I meet, I get to Minnesota, the entire top floor of the Target's law firm. The entire management team of the Target Corporation is there. They have 20 different conference rooms with lawyers in each room and the head of HR and the head of logistics and the head of technology, you know, all these different groups.

And we've spent four days, four and a half days negotiating a purchase agreement going from room to room to room, me and two guys and then with 50 people. And by Friday at noon, we had a completed purchase agreement and they had a board meeting at Target on Monday for two $900 million checks wires, one on the day of closing, one 90 days later. And so, So I fly back to my office. I'm in my office. It's Friday at 5 o'clock. The phone rings.

My secretary comes in back when that's how it worked. And I had the CEO of Walmart and the CEO of Walmart International on the phone. They wanted to talk to me. So I'm like, all right, here it comes. They figured it out. By the way, they both have spies on each other's companies. You can't believe what really goes on. Really?

For sure. So now they're like, Richard, we understand you made a deal with Target for Canada. for Zellers, they were so nice and so gracious. We screwed up. It's our fault, but you can't sell it to Target. We are going to send a team to Westchester to your office, and we'll get a purchase agreement signed by the end of the weekend, and we'll pay you an extra $100 million. So I said, you're my guys.

I can't believe we're sitting in this position, but I can't do it. And, you know, sometimes in life, you know, character and integrity, 100 million. I don't know what would happen if they had said 200 million. But for $100 million, I was able to have character and integrity for $100 million. And I said, I'm sorry. I shook hands with the nice people from Minnesota. And if their board turns it down on Monday, I'll be back to you and we'll make whatever deal that you want to make. But I have to go with this deal.

So they said, we understand. No worries. You know, sorry, we screwed up. They were really gracious. So by Monday, Target approved the deal. deal, they signed the papers, and they wired me $900 million in cash the next day. And my father, who had been very grumpy since writing his share of the $25 million check, was all smiles, never said another aggravated thing to be again for the rest of his entire life. And everyone was

very happy. It was a great win. And then of course, then of course, you just can't. make it up target uh things are so smart i told them they should come in incrementally and convert store by store and do it over time and keep all they were so arrogant and they insisted on taking the zealers name off of every building they insisted on firing 30 000 zellers employees they wanted nothing to do with the word zellers by the way i still own zellers uh at that they didn't even want the name zellers they wanted the leaseholds right and um and they screwed it up so they came they spent five billion dollars converting everything and doing this. And within two years, they fired the CEO and they bankrupted Target Canada and closed the entire thing down. And Walmart ended up getting everything they wanted

anyway. Oh my God. I was going to actually ask. Is that craziest story ever? Okay, first of all, I was going to actually ask you about that because so you were the one who brought Target into Canada in the first place. That was a big deal. I remember. It was. One of the one of the most, we made a billion 850 million profit after having bought the company two years earlier. Because I remember that was such a massive like deal, like in terms of not just a deal money wise, but like everyone was so excited about Target coming in. And it was expensive, by the way, when they brought their, when they brought Target in. So and Walmart is like the, it is so prevalent in Canada. So that was you.

That was all me. That was all me. And you, I understand her from Winnipeg. You know how many times I was in Winnipeg. Yes. I have a lot of friends in Winnipeg. You do? I do because the people from Winnipeg say that everything in Canada revolves around Winnipeg. So Winnipeg is the center of Canada.

And you never would, as an American, I never would have believed it. But I kept finding myself in Winnipeg right up until. I never heard that in my life. Right about, right up until the pandemic when I got a call from a grand chief Jerry Daniels, the chief, the. the Grand Chief of the First Nations people based in Winnipeg, yes. So he came to visit me and I gifted on behalf of the Hudson Bay Company, the Hudson Bay store in downtown Winnipeg, that big building,

which is now under construction to be a spectacular new First Nations building. I know exactly what you're talking about, on Portage and Maine or whatever. Oh my God. But that's crazy. I can't believe you think whoever told you Winnipeg was like the center. And by the way, it is because I kept finding myself there. There's something about the business and, you know, there's a lot of, there's a lot of agricultural wealth and, you know, natural resources and trains and things that go through Winnipeg.

And anyway, used to be, I mean, it was quite an impressive city at one point, long time ago. Well, well, well, before your grandparents. Okay. Well, yes. But, I mean, a lot of great people come from one. A lot of like smart, successful people. I'm not just saying that, but it's true. But I lived in Toronto.

It's a real place. Yeah. Well, they lived in Toronto for many years. But my sister and my mom now live in Montreal, but that's neither here nor there. So that's really interesting. I hope when the Canadians listen to this part, I'm going to actually clip this part for all the Canadians because this is really interesting because this is a massive thing back then. And then winners, do you remember winners? Yes, of course.

Winners is part of what ate up the Hudson Bay business over time. Really? Yeah. So Winners is owned by T.J. Max, of course. Of course. And they do very well in Canada. They weren't involved in that. And now that I had nothing to do with winners.

They're the very dominant retailer in Canada. And you were never involved with Holt Runfrew. Never involved with Holt Renfrew. Okay. Has there been a deal that you passed up, that you regret, that you should have actually done? So I'm really like a stalker. So I, in 2005, I wrote a memo. to my team, my little team,

and I said that we should buy Lord and Taylor, the Hudson Bay Company, Galleria Koff in Germany, Saks Fifth Avenue, and Neiman Marcus. And we bought, that was in 2005, I was 39 or whatever I was, and we bought all five of those companies. It took me,

Neiman Marcus, it took over 20 years to get them all done, but we had a plan. So entrepreneurs, as you know, we're not fly-by-night people. We're very thoughtful and tactical and have long-range plans, and we know what we're doing.

Not always. Not always, but some are. And I think sometimes people think that entrepreneurs are a little flighty, and one day they're this and one day they're that. I listened to your recent podcast on entrepreneurs, and I took a little offense. Which one did you listen to?

I have a lot on entrepreneurs. The one just a couple days. ago. What was it? Yeah, you kind of were bashing, you were bashing the not real entrepreneurs, the fakers. Oh, you mean the solo episode? Okay, that's like 10 minutes long. Yeah, it was 10 minute long. So I listened to that. So I think one of the great things about the United States is this wave of entrepreneurism that's going on, that's exploding. And in other places like Europe or in Asia, they don't have this culture of entrepreneurship. They rely on the government to take care of them or they rely on big companies to take care of them. And in the United States, we talk a lot about this philosophy of being a

zoo bear or a jungle bear. A zoo bear is someone who maybe works at Goldman Sachs and they go in the morning and they get a little pellet at lunchtime and maybe in the afternoon they do a little dance and get a tap on the head and then they go home. A jungle bear is an entrepreneur. and they eat what they kill. And if they don't kill anything, they die. And so any person who can figure out how to feed themselves by doing whatever it is that they have to do, I personally reward them with the entrepreneur banner.

And if you're an Uber driver and you sell bagels on the side and you make jewelry for your sister-in-law, you're an entrepreneur. and what's going to happen in this country with AI and the change of what's going to happen in these corporations, people are going to need to take care of themselves in a much larger way than we historically have done. And it's going to be okay.

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Now I want to get back to a couple questions that you said that we didn't kind of circle back to that. One is that when you're making the deal between Walmart and Target, one crucial point that people maybe not think about is who they're actually dealing with. The difference between dealing with the CEO versus the second in command or can you kind of just expand on that whole thing? So whenever you can deal with the decision maker, that is the way to, go. And we all know that. And in this case, this was really important and a big deal for Target. And so the CEO and the CFO themselves were involved. While it was a big, important deal for Walmart, there's such a big company that they kind of handed it down a little bit. And they kind of lost a little moment there because they weren't as on the ball as they should have been. So can you give people

some advice or some type of act like how does that happen every time you can maneuver your way to get to the boss maneuver to the boss without without insulting the other people in the food chain see that's the problem like how do you maneuver to the top of the pyramid and not insult or offend somebody that's a very tricky game okay so first of all we talk about principles one of the key principles is relationships so you want to spend time and have relationships and meet people and and then you have friends and the friends have friends. And, uh, you know, I'm working on something and a friend of mine called the boss of this other company and I started right at the top. So you use your, uh, relationships the best you can to get yourself to the top of the house. How much it would you say

of your success has been timing versus skill? Okay. People always say to me, oh, you're so lucky. How did you get that done? And how did you get that done? The answer is I manufacture my own luck. And because I work harder. I'm more prepared. and I make it happen. I'll give you an example. So if you have little kids and you go out, watch them play soccer, they're all running, chasing after the ball. But there's always one kid who always ends up with the ball and makes the goal.

That kid understands where the ball's going, not where the ball is. And so if you want to be successful, you have to be a little more strategic and understand where the world's going. So when the ball pops out, you're the one who got the ball. and you make the goal. And I spend a lot of time thinking about the world, being strategic and understanding so that I'm in the right place when it happens. This boom that you're on with entrepreneurs and this energy

and all the things that you're talking about, you're of the moment. You are in the right place at the right time. This is going to explode 10 times. You think it's big already. Entrepreneurs are going to be 10x what it is that's going on now. And who's talking to them? And you think in your space, oh, there's lots of people.

There's not. And if you look at our entire educational system from kindergarten to graduate school, the amount of programs, the amount of discussions on how to be an entrepreneur is infinitesimal, unbelievably small. So the people who are going to be able to coach and show people the road on how they can be successful being entrepreneurs, I think is a big opportunity. And that's part of what I'm trying to do is help people. I've always been interested in helping.

And, you know, I've worked with Cornell for over 20 years. My wife and I support their Baker program in real estate, which is a two-year master's. And I've spent 20 years going up there, teaching people and talking about how to be a real estate entrepreneur. And I think there's more efficient ways to do it. People like you can tell the message and tell, lead people to what they need to. to do how they need to think about becoming an entrepreneur, because what's going to happen is every company that has 200 vice presidents, guess what?

They're going to fire right now half, 100 of those vice presidents. What are going to happen to those 100 people? They're not going home to hide under their beds, some of them maybe. The rest of them are going to be like, I need to figure this out. And there's no job for them. So what are they going to do? They're going to become entrepreneurs. and if they're newscasters for CBS, they're going to create podcasts and they're going to create

their own way of talking to people. If they're in the architecture space, they're going to go steal one of the clients from their firm and have one client and make enough money for that one firm, you know, that one decision rather than being an employee for the architecture firm. So there's going to be an explosion of entrepreneurs in this country and the productivity in this country is going to go through. the roof because using Claude as an entrepreneur is unbelievable. I spend two hours every single morning talking to Claude and plotting and working and figuring

stuff out. And that's where the world's going. So can you talk about this AI for a second? Sure. Because that is where the world is going. But because of that, there's also this going to, I think that you can obviously chime in that there'll be a need for human connection. Like you've made your entire, your whole business was based on getting like showing up in person,

like going, talking, not just texting and not just sending some memo through email. You are very much face to face. Like that's your personality. That's my personality, by the way, too. We're losing that more or more or more. We're not losing it. People like us that can do that. People like the folks that are paying attention and following you, they have that.

Now, instead of having. 10 people who were the dead weight building all of the processes and things that needed to be done so that the so that the entrepreneur could execute, now a good part of that could be done with the help of Claude. Yes. Okay. So when you say you do two hours with Claude, is Claude your favorite? Why is, why are you using Claude?

Okay. So was Claude good for versus the other ones? I don't know. So look, I have many, many folks that work for me. It all started with me saying, ask chat, GBT, and ask Claude. And then I got frustrated with having to ask them to ask Claude and someone took 10 minutes and showed me how to do it myself, which of course allowed us to build this unbelievable relationship now. Now Claude knows everything in the world there is about me and how I'm thinking and what deals I'm working on and all of that so that it's very responsive. And it turns out that I spent my whole life prompting.

So the key to the AI is prompting. Well, I used to say to Ryan, Ryan, what if we did this and did it this way, did it this way? He'd come back and say, I'll let you know in three weeks when I figure it out. Now I prompt Claude, and Claude comes back to me in over 10 minutes and lays it out and helps me think through it. So then what I do now is I take, I build two, three, four Claude memos a morning. And then I send the Claude memos to my team members and say, what do you think of this? How can we execute this?

So now the productivity I'm getting is mind boggling. just from February to today, the level of advancement in this, you know, AI offerings for people like me has been incredible. Is Ryan going to have no job pretty soon? No, Ryan's going to have a job, but I won't need three Ryan's. Yeah. And I'm going to need one Ryan. So what's so special about Ryan because you took, you stole him from someone else? What did he have?

I didn't steal Ryan. I built Ryan with Ryan's great help. And Ryan and I are partners. but Ryan knows exactly how I think, and you could go take Ryan in another room and ask him any question you asked me, and he can answer exactly the same way I can. In fact, Ryan built an AI Richard.

You can go on our website, Bakerhouse, 1921.com, and you can click on a button that says, Ask Richard, and they have an AI version of me where they scraped all my clawed, all my emails, all my Instagram, and you can ask it real estate questions, and it answers just like me.

looks like me, talks like me. Ryan did this. Yeah. So how did you find Ryan? So can I get a Ryan? Because I think I need a Ryan. Ryan, do you have another person like you? We could build an AI Ryan for you.

So Ryan worked on our team at Saks Fifth Avenue and was very talented. And when we decided to do this project, we brought Ryan into to lead the content piece. So you're doing all content, Ryan, right? Okay. But you told me before you went to Princeton for architecture. Is that what happened? and now you're let you guys working on. We live in a world where we're all reinventing ourselves, right?

The world keeps changing. And I was a real estate guy. Then I was an operating company guy. Then I was a digital guy. And I'm a deal guy. And right now I'm an advocate for entrepreneurs. And I want to teach the world and help people be successful and take care of themselves. Because in the end, when they put you in the ground, it's not going to say he made this

great deal and he owned all this real estate. he's it's going to say he helped a lot of people and I got to spend a month in February in Costa Rica to rethink and reimagine where the world was going were you at recenter I you know what I'm Ben you know Ben yeah yeah I wasn't there but I met Ben they oh my gosh so someone we work with is very as an investor in them did you like it yeah I was supposed to go there I liked it I thought it was great and so I was I I rented a house on the beach near there, and I met Ben. This was Santa Teresa.

Yes. And where apparently everyone goes for reset. Like it's a world of broken toys on the beach there. Exactly. So all the broken toys are hanging out. So we all, so I had 80 people coming and going for a month to come and visit and say hello. I have had probably over 100,000 folks that have worked for me over the last 20 years. And I can call on almost any one of them.

today and they meet me, talk to me, spend time with me, help me. And because we had that kind of relationship with all these folks and I'm a builder of people. And that's amazing. And yeah, so it's good. So this is my next stage in life. How can I be more helpful to help people transition into where the world's going? And how are you going to be more helpful? I'm going to, I'm going to teach people and give as much knowledge as I can and be as helpful as I can to folks who want to be entrepreneurs. And so far we have a free summer internship. We have been doing free boot camps. We're going to have boot camps starting this fall that are sponsored by Cohn Resnick and Wilkie Far.

And we're going to be charging people for those boot camps. And we're going to create an ecosystem where entrepreneurs can get together and be comfortable. We're launching at Cornell, which is really exceptional. a living learning community. So I bought a Greek Revival mansion on Cornell's campus and we're turning it into a private club for entrepreneurs. And it's going to have tremendous content and activities. And it's going to have...

For who? Like women, men, what age grad? So Baker House is going to be located at Cornell's campus. It's for Cornell students, undergraduate and graduate students. They can join this club. They can... We're going to have five. 500 beds of housing in addition to the club.

You can be a resident member or a non-resident member. And you'll have to go through the Baker House boot camp, sort of like initiation, and then you'll be an entrepreneur and be able to live and have this experience. And we'll have all kinds of content and activities, a gym, a Nordic spa. But what's really cool is I'm also building a craft center. I did a lot of research. And what I found is that a large number of very successful. entrepreneurs and scientists, we're crafters, painters, sculptors, ceramics, cooking.

And there's something about that creative and hands-on activities that generate our best scientists and our best entrepreneurs. So as part of this experience at Cornell, we're going to bring, I'm doing an entire building for crafting. It's going to be very cool. So I had so much interest in all of this outside of Cornell that we've decided to build and offer this Baker House boot camp, which, as I said, we're doing eight two-day Baker House boot camps this fall in New York City. So I don't know, we're going to create a community from the ground up. Yeah, so it's going to be fun.

So the ones that you're doing, like, you said eight two-day ones, where are they going to be? They're going to be in Manhattan, across from Carnegie Hall, in a Cone Resnick's event center. And they're sponsoring it, along with Wilkie Far, another law firm. We have other people talking to us about how to get involved. So we'll see where it all goes. But who's going, though? Okay. So let's talk about that.

So the people that are excited about the Baker House boot camp are young entrepreneurs, people who want to change careers, veterans, very, big group, retirees, white women, black women who want to be entrepreneurs, and they want to take control of their own life. They are tired of living in a world where, one, there isn't a job they can have that properly rewards them, big problem, or they're working somewhere for a bunch of jerkoffs, and they can't be successful and express themselves. One of the things that's most shocking to me is the low percentage of women, real estate entrepreneurs. I can't quite understand why women are the most perfect, natural folks to be real estate

entrepreneurs. They are used to running a household and running a complex family situation. They know how to fix things. They know how to execute. Women, I feel, are the dominating force in real estate agents. You forget agents. I'm not talking about real estate agents. What percentage of real estate entrepreneurs do you think are women versus men?

Okay. Like the Barbara Cochran's of the world? Barbara Corcoran is a broker and I don't count that. Okay, so give me an example, who you would count. Yeah, you give me an example of anyone who buys and sells properties and buys them and rents them out and owns them. Think of all these buildings in Beverly Hills. I don't know many commercial. I know a lot that maybe flip homes and then sell those.

Yeah. That doesn't count. That counts, but that counts. It's a small number. We're not sure of the number. We think it's about 10 to 20 percent of real estate entrepreneurs. are women. It should be...

Barbara Cocker's a broker? Yeah, she started a brokerage firm. She's an entrepreneur and, you know, but for brokers. So, which is great. Brokers are great. Commercial broker, though. No, she was residential broker.

By the way, residential and commercial brokers can easily become real estate entrepreneurs and buy their own and own their own properties. We spend a lot of time teaching people how with very little to no money they can own properties. That is a magical... You should come.

You're invited. We're doing Joe DeSenter from Spartan Races dreamt this idea up. I never, why is it called boot camp? Because Joe made it up. Because Joe's involved. Because Joe's involved. Joe made it up.

So Joe sponsored the first Baker House boot camp, which is this weekend, June 26, 27, 28th, in Vermont. We are oversubscribed. We have 50 people showing up. Is Joe going to make people like carry up pails of water? While this is going on. Yes. While this is going on. Joe is running a death race.

Yeah. Oh my God. Forget it. No one. So wait. My people aren't doing that. My people are getting wine and cheese and food. And mine's going to be very civilized.

But in the background is going to be Joe's death race. Yeah. And, but that's, that's the opportunity. But the opportunity for women to become real estate entrepreneurs, this is the single best time in history for that to happen. Okay. So then that's a good segue into my next question is, When you look at the real estate market today, where is the opportunity that most people are actually missing?

Yeah. Okay. There's a huge opportunity for real estate entrepreneurs. Think of we were just walking around the outskirts of a rodeo today. You know all those little buildings in the side streets and they have like a restaurant or retail and they have office or apartments upstairs? Yeah. The United States, millions of those. Who owns those buildings?

They're not owned by black streets. and Vornado, they're owned by your uncle and your, you know, older folks and they, over the history and they used to have their jewelry store downstairs. And, okay, what's happening is there's an entire generation of people that's going to pass away and is passing away. And those properties, their estates going to get a stepped up value. So they don't have to pay the tax because when they die, they get a stepped up value. So the estates of those folks are going to sell those properties because there won't be

a tax disadvantage to sell them. And they don't want to own them. They don't want to own them. Oh, that was Dad's hardware store. Now I live in, you know, Bermuda and I don't care about Winnipeg or whatever it is. And the local people in Beverly Hills and Winnipeg or whatever it is are going to be able to buy those properties. They're going to retent them and put a Pilate Studio and a restaurant.

And they're going to make the apartments cooler by putting in a cold plunge and a sauna in the basement. And they're going to be able to get traditional finance. and be very tax-efficient. They're going to be real estate professionals. They're going to get bonus depreciation. And there's going to be endless amounts of excellent investments for real estate entrepreneurs.

And they're not going to be competing with Blackstone and people like that because they don't want those assets. And that's what's going to happen. See, I think there's so much to learn by this because I think that it's a, it's, it feels complicated, is it? It feels complicated, but it's not. And in two days, I sit people down and I give them examples, tell them how to do it. The other thing that's really cool about our boot camp is we match people up in groups.

So in the first morning, we put together maybe a person who has a large bank account and maybe a person who's really good at running numbers and maybe someone who's a personality deal person and we put them into groups and then we have them work for the two days as a group. and one of the things we talk about is learning how to have the right partner. The right partner is not someone that looks just like you. The right partner is someone who compliments you and has skills that go with your skill set.

I think that's so, that's the name of the game, right? Not everyone has to be the same. And they end up, like, a lot of times things fail because you want to mirror the person that looks like you. And then you have the same qualifications and not the same. Like, you don't balance each other out. I want to come and do this. this thing. You should do it. Let's pick a date. I should. I should go do it. You'd love to have you.

And you can come on. Let's find a day in New York in the fall and then we can do, we'll build into it a segment where you and I can speak together. Yeah. Because I think people, I think this is actually a really interesting opportunity for people because I, I think that people don't know what they don't know, right? And so they fall into these positions like they're selling a course on social media that seems like a much more lower barrier entry. But this is, this is very engaging. Everyone said to me, do it online. I'm like, forget that. The whole point is you've got to get off your ass and go somewhere and learn.

And this is not as profitable, not as efficient. But if you want to learn how to be a real estate entrepreneur, this is the best way in two days, very economically. You can learn all the tools. You can meet people. Then what we're going to do is we're creating a community online. So starting this Wednesday, we're launching something called office hours with me. and I'm going on and for an hour or two hours, whatever it takes. Where?

Where are you going? Okay. All you need to do is go on our website, bakerhouse, 1921.com, and you can sign up for free to go on our office hours. It's incredible. You can ask me or my team members questions, and you can listen to other people's questions. Nobody costs to talk to your lawyer.

You have a real estate lawyer? Your real estate lawyer costs $1,000 an hour. He's going to say, yeah. And we're going to have people far better than that that you can talk to and ask questions. More importantly, you can hear other people. Gibson Duns 2,000 an hour. But anyway, go ahead. Yeah.

Yeah. So anyway, we're looking, we're just trying to be helpful, have fun, create a community. We're, there's nothing like this in the world. This is a Cornell-based program that's authenticated by Cornell University. I'm teaching it at Cornell. We have a club, a complex at Cornell University. and we are opening this up to people, anyone in the world who wants to learn about being an entrepreneur,

and we're going to create communities so people can work together in order to, you know, be successful. I love that. Okay, thank you for that. I have a couple more questions. Sure. Okay, and even Marcus acquisition. We didn't talk about that.

It closed for $2.7 billion. How did you, like, again, value something that's actually struggling? That's the big question. I'm coming back to a lot. Okay, so I owned SaaS. How much did you buy sacks for? I bought sacks for $1.3, sorry, $2.6 billion in 2013. Before you even tell me about Neiman's, is that like a flailing, like this brick and mortar in general, isn't that like a flailing business?

Okay. There are industries in the United States that have tremendous headwinds and there's rational reasons and irrational reasons, whether it's media companies, magazine companies, retail, all kinds of businesses, tremendous headwinds, and many of them aren't going to make it and or they're going to be reorganized. So in 2013, when I bought Sacks, I had a plan. The plan was immediately to roll up Barney, Sacks, Niemanns, and Bergdorf-Goodman into one company in 2013, not wait a decade to get there. Unfortunately, through a whole variety of reasons, it took me a lot longer to get to where I needed to go. the process, Neiman Marcus went bankrupt during the pandemic. So that created a lot of problems.

This is for people who don't know. And then they can come. Why do people, why would somebody go into bankruptcy on purpose? Can you explain that? I think it's important for some people to know. We went into bankruptcy in January, Sachs Global, after having merged Neiman, Sachs together. We went in in order to protect the business and the vendors. Well, how does that protect a business? Vendors were concerned about the financial condition of the company, so they were concerned to ship goods. So if we hadn't gone bankrupt and they didn't ship the goods, the company could have gotten

liquidated, which would have been disastrous. So in order to be careful and protect the business from getting liquidated, we filed for bankruptcy early enough that there were still assets and inventory and things. And now the company is getting reorganized by very capable people and is coming out of bankruptcy in the next week. And we'll be around for a long time in a much better financial condition. So it actually can benefit the company because it saves the company. Yes. In this particular case, the goal was to bring Bergdorf-Niemann Sachs and the Barney's IP together in one company and save huge amounts of expense by instead of having two marketing teams and two IT teams and

it was all going to be on one set of systems. Those synergies were going to save, are going to save $600 million a year. That was more than both companies were making in EBITA. So that's enough to save those companies. So I'm very disappointed that the company went bankrupt, but I'm thrilled that we got all the companies together before they fell apart. Do you lose money on that? I lost a lot of the equity going forward that I would have had. How much equity would you have had? Oh, a lot.

Like how much 80%? Oh, I probably lost a half a billion dollars. And then so. But I made it, you know, I did the right thing for the, I did the right thing for the vendors. I did the right thing for the employees of the company. And I'm very satisfied that this will be a strong, high quality company going forward. And I'll just have to figure out how to make more money. doing something else. I was going to say, what are you going to do now? Are you poor? Do you need a loan for me?

Well, I'm going to, you know, walk my way back to the bus station and, you know, take the Greyhound back to New York after this. So I'm just fine. You don't have to worry about me. I'm not worried about. Don't worry, Jen. I'm definitely not. I'm just fine. I have a very nice business with my son and I have a nice family business and we have a good time and we do healthy things that are good. And, Okay, wait, so tell me something. So like, let's get back to the Neiman, but deal. But does that mean, is your son working with you? Is that what you said? Your... My son, Jack, runs our family real estate business. So we own 10 million square feet of Walmart anchored and other anchored shopping centers. How old is your son? My son is 29 years old, very capable, very disciplined, and he runs the real estate business. We also have a private equity business. He runs the private equity business. How big is the private equity business?

Private equity business is a small boutique family office business. Okay, for how much? A lot. Like, are we talking to $100 million, $200 million, $200 million, $2 billion, $6 billion? If we added up the volume of all of our operating businesses, it's, you know, over $2 billion. Okay. And so is your son as driven and ambitious as you? My son is very thoughtful, very smart, very capable.

people often think he's a lot like me, but the truth is he's a lot more like his mom, who's much more buttoned up, much more focused. And but he has a very good mix of his grandparents, his mother and his father. You have another child? I have an older son who's an artist. He's an abstract oil painter. I went to the Royal College of Art in London. And I have a daughter who's getting a degree in forensic psychology.

at John Jay in New York. But both of them were not involved in the business. Nope. Okay, so let's get to Neiman Marcus. So how did that, so what, what, how did that come to be? You had these five companies that you wanted to get and you got them all. I, I worked for over a decade to buy Neiman Marcus. And why?

Why were you so obsessed with that one? Because merging it with Sacks created the $600 million of synergies. So if you wanted to save the luxury, multi-branded, category. in the United States you needed to put them all together. They didn't work competing with each other. How come? Because there wasn't enough business? Because there just wasn't enough margin in selling other people's goods to support

the kind of service level that people expected. What was the difference between the two of them? Not much. Right? They're the same stuff. That's why it was so much synergies. Yes. The same person who bought, you know, handbags could buy handbags for Neiman Sachs and Bergd's.

Yeah, they're very interchange. But Bergdorf felt more expected. More special and more elevated, and they still have a separate team. But there's a lot of economies of scale putting all these businesses together. Like what about Herods? Where does that fall into the whole luxury? Herods is... It's not in the U.S.

Yeah. It's a whole different ballgame. But you never tried to buy Herod's. Wasn't interested in buying Harrods. Wasn't on my list. Wasn't on your list. And we were just interested in cleaning up what was going on in the United States. And I feel very comfortable that we accomplished our goal.

Right. I won't make as much money as I would have. We had knock on bankrupt, but I still feel good that we put it all together and did the right thing. Okay. So now, so the Neiman deal happened. Like, how did you know to do it? I had to raise $8 billion last year to merge Lorton, to merge Saks Fifth Avenue and Neiman Marcus together. It took $8 billion of capital, which we raised.

It was very difficult transaction to get done. Eight billion. $8 billion. And so all that money now, you lost the five. We didn't lose. Money didn't get lost. The money was used to refinance the business. The business going forward is going to be profitable.

And the money that got lost was the equity. Yeah, the equity. That was put in the company. So that's my loss and other people's loss. And, you know, we're sophisticated investors. And that's the way it is. So give me your three top learning lessons that you can give someone who's just starting out right now. now. Okay. First one is kind of similar to your, your philosophy, is you have to have courage.

I call it courage. You call it being bold. And I spend a lot of time now with young entrepreneurs, young real estate entrepreneurs. And biggest problem they have is pulling the trigger. They can't pull the trigger. And I don't want to be the one to hold their head underwater to pull the trigger. But having courage and being bold. Now, how do you have courage and be bold? My philosophy is you need to do investments that require no money. Easier to be bold and courageous when you're not going to lose any money. So I beg people, please do not borrow money from your in-laws and your friends and do not invest your money. Figure out how to make money with no money. And it can be done. It can be done day in and day out and or a little bit of money, money that you can afford.

That's the trick to having the courage and being bold to make a deal happen. Two other ones. Give me two other lessons. Two other lessons. Say it again. Sorry. Okay. I wanted three lessons that you would need to be successful as an entrepreneur. Okay.

So you got to work harder than everyone else and have tremendous energy and be focused. It doesn't just, it's not a hobby. It doesn't just happen. You got to work hard. How important do you think likeability is? Very interesting question. I think it's certainly a thing. and I rely on it.

I'm a likable person and it works. I know other people who are like kind of jerk offs and they still are successful. So, you know, being smart, being clever, being capable, those are very important features. And if you have all those features, maybe being personable isn't as important. But I always coach people to be social and be personable and that's an easier way of going. I think it's very important. See, I always talk about the fact that I believe there's so, there's, these underrated skill sets that are actually much more foundationally important for business

than like the overt ones, right? Like just because you have a, because you go to Princeton or Harvard, you can be academically super smart but not have any street smarts or not be very likable. And so there's all this data and research that I've seen and just in my own experiences and talking to a lot of people who do it, you know, very successful, who have been very successful. I've noticed that the people who raise the most money, it's because they're the most likable. The people who get the most opportunities because they're the most likable because people want to work with people they like, not just people who are competent, right? Like, I think there's a lot of these like very, these nuanced detail, like devils in the

details that are very likable. You're right. You are likable. You've got a lot of levity. It would make someone rather be with you than some stick in the mud who's just extremely number oriented, right? So yes, but it's kind of a scary concept because in the end, And we, if you're going to be an investor or you're going to work with someone, you want someone who's going to share, who's going to perform at the highest level. Yeah, you want someone who's competent. And, but we talk a lot about relationships. Business is all about relationships.

So if you're not personal ball, then you can't have relationships. So I would spin what you're saying is slightly different. And I would say relationships are super important and you need to go out of your way to make relationships and work with people. By the way, that's not being an opportunist and searching for that person that happens to be the one person that's going to help you. My wife and I have a philosophy. We wake up every day and we try to just do the right thing. And we just help anyone that we can help. And it is the most magical win. I help someone that just was a random person or whatever. Next thing I know, that person knew someone that I was working on a deal. And if everyone just woke up

every day and did the right thing, that is the way to be the biggest opportunist. It will come back to you in a thousand ways. You and I are very similar. We think similar. I always say that the people that help you the most in life are the people you least expect. So you've got to be nice to everybody and always, you know, always start with how you can be helpful to them. Which comes back to where you started. If you're a person that likes people and is a nice person, good things happen. I also think being very curious is the gateway to opportunity. Because if you're curious, that's when like you figure out and find these opportunities that you otherwise never would, right? So what I say to always is that if your curiosity on a scale of one to ten is a two, get it to a five. You don't have to be ten.

Not everyone's going to be like me or you who are like super curious and want to know or me. I'm super curious and want to know everything. But if you're someone who's like, doesn't like don't care at all, that's a big, big no-no. I'm going to give you. I'm going to give you. I'm going to you a little bit of an extra spin on that. Go ahead, Richard. So the extra spin on that is I'm very enamored with people who are creative now. So we used to be a little bit like, oh, they're going to be a musician or an artist or they studied, you know, the arts at school or whatever.

And society was a little bit like, you know, what are they going to do? You know, how are they going to support themselves? Well, in this new world, it used to be really important to be super smart, know lots of stuff. well, smarts is now becoming a commodity. I have clawed in my pocket. I can ask Claude anything. So the real power going forward is going to be creativity, people who think differently, people who see different,

people who are inquisitive. That is the power going forward. And when I talk about entrepreneurship, I have now opened up the dial to include artistic and artists. That's why we're doing this craft center as part of our mission and creatives are, this is going to be the revenge of the creatives the next stage of the world.

I love that. I think that's such a great perspective, actually, because you're right, because anybody can now, with Claude and chat, GPT, everyone, you have smart in your pocket. So what are you going to do differently? I also think the other,

just to add one more thing, I think empathy is very important for this exact same reason. Compassion is really important for these same reasons. Anything that gives you a human touch point, that you can't find on a computer or AI is the next level. So with that being said, Richard, I thank you so much for being on this show. It's been a long time.

I think it's been like almost two hours. So you did, for your first podcast, you did fantastic. This is so much fun. Thank you for having me. You were an excellent guest. Honestly, I've learned so much from you. I'm not just saying that to be polite because you're on this show. I'm serious.

You gave a lot of great information and you're a great storyteller. And that's another one very important. Right, too. It's on my list. It's on my list. Yeah, that's a great one. And so for anybody who wants to know more about what Richard is doing and bring into the world of entrepreneurship, you can follow him or go check out his website at. Okay, well, first, well, I'm on Instagram on Baker underscore House 1921.

And you go to our website, bakerhouse 1921.com. I love that. Thank you so much for being on the show. and thank you all for listening and goodbye.