TFTC: A Bitcoin Podcast - #673: Following The Puck in Real Estate with Chris Drzyzga

Episode Date: October 20, 2025

Marty sits down with Chris Drzyzga, a commercial real estate professional and Bitcoiner, to discuss the structural crisis facing the commercial real estate industry and how Bitcoin integration—through treasury strategies, dual-collateralized loans, mining operations, and technology—can help property owners navigate monetary debasement and obsolete inventory. Crhis's Twitter: https://x.com/ChrisDrz Bitcoin Navigator: https://thebitcoinnavigator.com/

Chris, good morning. You've had a dynamic where money's become freer than free. You talk about a Fed just gone nuts. All the central banks going nuts. So it's all acting like safe haven. I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor.

I mean, that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be. Chris, good morning to you on the West Coast. Early afternoon for me. How are you? I'm doing very well, Marnie. How are you doing? Doing well.

Excited for this conversation. I mean, we've been talking about the intersection of real estate and Bitcoin for a few years now. right before we hit record you mentioned leon wonkham we've had andrew hones on the show and a few others to talk about this and recently we've had some real estate experts that really aren't focused on bitcoin that have come on so i think this is going to be a good continuation conversation um and you're someone in the real estate industry in california specifically that has decided to come out and sort of ring the alarm bells in august on august 20th you sent out a tweet that's your pin tweet a warning and a call to action for the entire real estate

industry real estate is at a breaking point monetary debasement 62 inventory obsolete new financial products competing for capital and so it seems like you're very well ingratiated in the real estate industry you're a bitcoiner and you see the writing on the wall of some of problems in the real estate industry and you think bitcoin is a potential solution to the problems that exist uh that's absolutely right um you know i i've been kind of watching this uh you know from the sidelines so to speak you know having a career in the commercial real estate world and being a bitcoiner on the side uh for almost a decade now um i joke i tend to round up. I'm probably seven or eight years in or so, but, um, just watching it and thinking

through, you know, what this means and, and, you know, the second and third, uh, kind of derivatives of the, you know, the disruption, um, that's going to take place here. And, um, it's just gotten to, uh, you know, a tipping point where, you know, I couldn't sit back anymore, um, and just had to speak up. I started to put some thoughts down on paper. I had been baking a strategy for a handful of years. And really, the last piece of the puzzle was the cash flow piece. So I've said to others that Bitcoin's CAGR could have been 200% a year. It didn't matter. There was a large segment of the real estate world that was just not going to give it any attention because of that cash flow component. And there's obviously arguments for and against that, I get it. But when Saylor and

Strategy started releasing these preferred offerings that provided that cash flow stream built on top of Bitcoin, that was when I was like, oh boy, here we go. Now we got to start talking about this because like it, hate it, whether you understand it or not, I mean, these are viable competitors, um, to the real estate industry, not just the bond markets. So, um, I, I just started talking about it and here we are today. And I think it's good that you're in the commercial real estate space because recently we had, um, Melody right on talking about, uh, residential real estate. And I think it's important to draw a line between the two and really highlight the sort of differences of each. And we went pretty deep on residential real estate about a month

ago. And so I think commercial real estate is a different beast, particularly in a post-COVID world where you had everybody rushing to work from home. And it seems like a lot of the commercial real estate properties were under stress during that era and still to this day. So I guess to take a step back and just talk about the problem before we jump into certain solutions, how bad is it out there? Yeah, I mean, that's a good question. The commercial real estate sector in and of itself, I mean, it's vast. People tend to paint it with just a broad brush, but they overlook the fact of how many different property types and specialties make up the commercial space. And each of them have their own dynamics, their own supply demand

dynamics that make it up. You know, deals get done very differently across each of these product types. So there, you know, we could have a podcast, a long form discussion on literally each one of those specialties. But I mean, just at a high level, I mean, you obviously have Bitcoin, which is, you know, it's going to is disrupting the industry massively, and it's only going to pick up steam. But when you zoom out and you start to look at or consider all the other macro forces that are colliding at the same time, right? I mean, you cover a lot of them on your pod regularly, right? Demographics, technology, AI, automation, robotics, different generational expectations and consumer demands, a long-term debt cycle ending, a new monetary regime emerging.

I mean, you stack all these major forces up, and then you turn around and look at the commercial real estate markets just in the United States. And in the United States, there's about 87 billion square feet of commercial property, just roughly. That's the four major food groups, office, industrial, retail, and multifamily. there's a handful of specialty sectors but for for the purpose of our conversation let's just say it's 87 billion square feet 62 percent of that supply about 54 billion of it was built before 1990 right it's older than you and i are so that was built in a completely different era different consumer demands different business models all of it so you you hold that and then look back at these these major forces that are underway and you come to the conclusion very

quickly of how much of that supply is functionally and economically obsolete and you start to have an oh oh shit moment um like how how are we going to navigate this and the next question you ask yourself is well who owns all of this stuff right and that's one of the big differences between residential and commercial, right? Who owns all this stuff? If you strip out all the private or excuse me, you strip out all the public entities, the REITs, what have you, commercial real estate is owned about 60% privately. It's privately held throughout the United States. And that's not including the private REITs, the private institutional funds. If you included those, you're another handful of percentage points higher. So just looking, just knowing that 60%

of the supply is owned privately, that's you, me, mom, dad, grandma, grandpa, small operators, business owners, family offices, it's mainstream. So that's a huge problem. And kind of how you started the top of this discussion was, it's gotten to a point where we have to start, we have to acknowledge it we have to start having these frank discussions about what it means and how we're going to move forward there's a lot of really smart people in the commercial space and if we leverage our collective brain power i have no doubt that we're going to make this transition a lot more seamless than it could be otherwise yeah i think based off a tweet you sent out this morning and i'll pull it up here to show people on the youtube and

spotify video can see it correct me if i'm wrong but it seems like there's an incentive misalignment between tenants and the owners of the building you say here office reset motion vacancy remains elevated tenants are consolidating decision cycles are longer ti packages are bigger renewals are shorter well-located class a with strong amenities are still moving generic space is sitting and pricing is adjusting and so you have or the goals and the incentives of the people that own this property which is hey we need to get tenants in and start cash flowing and then you have the incentives of the tenants where they're thinking okay is this the best economic decision i can make for my business um my family whatever it may be and it looks like there there's

a bit of a incentive realignment particularly on a duration scale if that makes any sense absolutely um and i mean this kind of i've been kind of pounding the table um you know to the fact that this is not just another cycle right i mean some of the biggest criticism or biggest biggest feedback i'm getting from uh folks online is that you know real estate cyclical you know we've been here before it's just another down cycle right and okay fair enough um you know I don't have 40 years experience in the, in the business. I'll, but you're missing a big piece of the puzzle here, right? I mean, over on top of the cyclical changes, there's, you know, some structural, um, uh, some structural changes that are taking place. The mismatch between

landlords and tenants is just one of those that you're highlighting. So, uh, whether it's shorter lease terms, uh, in commercial real estate lease terms, majority of them are three to five years in length. Um, you can get seven and 10 years on, you know, larger tenants, larger properties, but by and large, they're three to five years. And there's a lot of capital that is outlaid up front, um, by both parties to get a deal done and to get the space ready. So, um, when, when the tenant base is you know saying we're not signing a five-year lease because of x y and z we need a 12 24 month lease that creates a whole host of issues for the landlord and the property and i mean even the tenant so there's some big disconnects there that we haven't really

filtered through yet yeah i guess diving into the economics of the the building owners and the owners of commercial real estate where it's privately owned or even the big funds i guess distilling this down to the first principles explain it like i'm five commercial real estate what what is what is their goal at the end of the day what is their time frame how much of a return are they typically looking to make um i mean you can have timeline hold periods as short as three to five years. I mean, that's really the bulk of it the last 15, 20 years. And that's how you're really making your returns and turning a profit is those shorter compressed hold periods. You're not necessarily buying the properties for long-term holds into cashflow because these things are only

spitting off 4%, 5%, 6% in cashflow. So if you're going to, again, outpace inflation, outpace to basement and, you know, turn a, turn a profit, you're making it on the exit. So, um, three to five years is the short period. Um, the majority of the period I should say, and, um, there's some core assets, some core plus assets that are, that are longer term holds, um, 10 years plus, but those are, you know, you have the, the, a very different tenant profile. Um, you have a very different end user in those properties so three to five years they're basically looking to get their nut on sprucing out the place and flipping it to somebody else yeah and i exactly and you're i mean at the end of that that whole period you're looking maybe high teens on a return

i think that's kind of what you're looking for there on your question high teens low 20s are few and far between. If you get into the spec development world, you're mid-20s, but you're also taking a lot more risk. There's a lot more expertise and experience that's needed in those transactions. So yeah, high teens is what you're looking at. And again, I mean, that's where you come back to Bitcoin as the hurdle rate. It's like, at what point do these LPs, you know, some of these less experienced operators, you know, just see the light and say, hey, I'm going to allocate this capital to, you know, other assets. You know, I think there, you know, this transition is going to be, there's some good things that are going to happen from

this transition. I don't want to be a total doomer on it because that's just not who I am. But I I mean, I think the disruption is going to flush out a lot of malinvestment that we've had over the years, and it's also going to separate the pros from the amateurs, right? There are a lot of people running around pretending like they are sophisticated real estate professionals, and now that the market conditions have changed, interest rates have gone up, materials and labor are up. I mean, they don't know how to navigate these markets. So the folks that don't have the edge, they don't have the expertise, they don't have

strategy, they're going to get flushed out. And those that remain, they're going to have to have a comprehensive strategy that they apply to every asset or across the portfolio if they're going to remain competitive and relevant and profitable. I mean, in my world, the big buzzword is we have a value-add deal, right? And value-add, when you strip away all the lipstick there, right? Value-add just basically means we're buying a property, we're making some minimal cosmetic upgrades, we're pushing rents, maybe we'll rename it, we'll rebrand the property, and

then we're going to flip out of it for a multiple in a few years, right? We're not really adding any value. property. And I think that game is coming to an end as well. So again, those that are remaining in the industry, they have to have an edge. They have to have some sort of strategy. And I'm not pretending like I have it all figured out, but I've put a lot of thought into what that strategy looks like. And that's kind of what I've been talking about online is these four pillars that real estate operators have to execute on if they're going to be successful. And the first one is, I call it your Bitcoin strategy, but you can call it your capital

strategy, whatever you want. And the Bitcoin strategy consists of a couple of things. One is what percentage of your US dollars are getting allocated into Bitcoin? That's question one. question two um is i can also see a scenario where your u.s dollars are being held in a vehicle like stretch right um so you're you're being really um intentional about how you're holding your your capital the second pillar or the second category in that that bitcoin strategy are your loans and financing mechanisms right and you've done a great job of talking about the dual collateralized loans and these long duration credit products that infuse Bitcoin. I'm really excited about that. I think that's going to be a natural onboarding transition mechanism for the

industry at large. So I'm excited to see where that's going. And the third piece of this capital strategy is how are you raising equity? And that comes down to understanding or at least acknowledging that your competition is just not your immediate sub market. It's not the building across the street, right? It's spot Bitcoin for one, and it's these adjacent products that companies like strategy are putting out. Because again, like it, hate it, whatever your feelings are on them, there is a percentage of capital that's going to naturally migrate into these uh these um these other assets as adoption grows as awareness goes as these financial advisors across the country get educated and incentivized to you know put them into the

boomers portfolio there's going to be a significant percentage of real estate owners they're going to say hey i don't need that you know apartment building anymore right i don't need the tenants i don't need the termites all of that um and they're going to go for that you know less management intensive vehicle. So that's one of the pillars. The other one is your energy consumption, right? I mean, depending on commercial property, energy is about 30% of your operating expenses. It'll fluctuate property to property, but that's a good benchmark is 30%. So, and in most markets, all markets, all property types, your energy, the last handful of years, last five, six years is increasing double digits, which far, far outpaces your

fixed rent escalations. So if you're going to streamline operations, you're going to, you know, keep that NOI robust and durable. You have to optimize that energy consumption any which way you possibly can. And, you know, most of the industry knows about, you know, the basics, right? Window tints and films and sensors, you know, there's all these IoT devices now that'll, you know, reduce overall consumption, solar panels, battery storage. But now, forward-looking real estate owners have to start thinking about Bitcoin mining, right? And how do you integrate that into the asset or across the portfolio? when you do it effectively you're not only subsidizing you're not only able to subsidize

the energy cost but you're taking an expense line and turning it into an income stream when you do that on a large property or you know at scale across a portfolio that's not an incremental improvement that that's a step function improvement in your operational efficiencies. And, you know, I need to kind of preface this by acknowledging that, you know, Bitcoin mining into these building systems is still very new. There's a lot of changes going on and a lot of innovation taking place. But at the same time, it's moving a lot faster than most people realize it is. And I mean, I'm also not an energy expert by any stretch. But as a real estate person i see these three industries these one separate industries colliding right you got

real estate you got energy and now bitcoin you know tech whatever you want to kind of put those that last one together but they're previously separate now they're colliding and when you apply it to this real estate asset it's taking this this single purpose this single use monolithic depreciating asset and turning it into this financial machine that's resilient and positioned well for the 21st century. I mean, if that doesn't get you out of bed every morning as a real estate operator, I don't know what does, right? So I'm really excited to see what happens in that particular area.

The third category and the fourth category, the third category is tech integration, right? how are you integrating technology into the asset or across a portfolio and technology helps you accomplish two things one it it helps you provide a superior a user experience a superior customer experience and it helps you streamline the operational efficiencies we can have an entire podcast on the topic of prop tech that's what it what it's what it's called in my world but again, it's allowing you to create conveniences and amenities for your tenants if they become very sticky. That's very, very important. The second piece of it on the operational side is you're able to get real-time data, make decisions faster, inform decisions at that faster, which

ultimately keep your costs down and extend useful lives of building infrastructure so that's that's very very important the and the fourth category and i'll stop talking here is has to do with modular improvements right if renovations and tenant improvements over the last decade they've increased 100 percent across all product types across all markets and again if you're you're working on three to five-year lease terms with these tenants, and you're spending five, six figures every time a tenant moves out just to get ready for the next guy, that's terribly inefficient from a capital perspective. And then you look at it, this goes back to your earlier question too, you have a mismatch in incentives. The landlord foots the bill a lot of the time for those

improvements. And oftentimes, they're breakeven points not until month, somewhere between month 20 and 25, generally speaking. If you have a big TI job, it can be well into the third year of the lease. So again, if you're turning over these units and dumping large chunks of capital into them every few years, in the world that we're going into, that is a very bad idea. And you have to figure out how to optimize that. And fortunately, today, we have modular improvements that are getting a lot better. They're applicable here. And from the owner's standpoint, it allows you to appeal to a broader audience, right? More tenants at once. And then in addition to that, you can carry, there's a residual value component that you can maintain through time and across

multiple tenants. That's significant capital, significant dollars that fall straight to your bottom line. So again, just to kind of put a bow on all this, if you're going to be a real estate operator, you know, through the end of this decade and into the 2030s, that old value add strategy, you know, letting appreciation do its thing. That's, that's gone. Don't do that. Don't give your money to that investor. That's a bad idea. They have to have a comprehensive strategy that they're going to execute on the asset or across a broader portfolio. Full stop. What's up, freaks? This rip was brought to you by good friends at Silent. Silent creates everyday Faraday gear that protects your hardware. We're in Bitcoin. We have a lot of hardware that we

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a private public key pair, securing that seed phrase, setting up a pin, setting up a passphrase. Again, BitKey makes it easy to use, hard to lose. It's the easiest zero to one step, your first step to self-custody. If you have friends and family on the exchanges who haven't moved it off, tell them to pick up a BitKey. Go to bitkey.world. Use the key TFTC20 at checkout for 20% off your order. That's bitkey.world, code TFTC20. That was a firehose of information. I've been here taking notes, and it makes a ton of sense. I mean, I think this intersection where you said energy, real estate, Bitcoin, whatever you want to call it, tech, is certainly happening.

And I think capital efficiency is the name of the game as we get into this sort of debasement trade reality. And obviously, I think Bitcoin is going to be a crucial part of anybody's tool set, not only in real estate, but bringing this back to the top of that fire hose, going back to the question of where are you holding your capital? You said that micro-strategy stretch, the preferred offerings, yield are very appealing. But just to paint a full picture for people, what is the typical practice of real estate investors or property owners, what they do with their cash flow and the cash in their bank account? Are they just buying treasuries? Are they going into money market funds? What are they doing? Yeah, I mean, it's all of the above, right?

checking accounts, T-bills, money market funds, just short duration vehicles that are, you know, perceived as safe and, you know, throw off a little bit of yield. But again, I mean, again, maybe this is my, the Bitcoiner in me, I'm, you know, looking at these products and you just kind of look at some of the, you know, some of the highlights, right? Senior in the capital stack, over collateralized by five or six times right um liquidity right all of these things i have a hard i i almost i i personally would put my trust in you know the management team over its strategy that i would you know the the the clowns in washington because we all we all know where that goes we all know what happens there we've seen that movie

yeah and you know i'm actually like instead of misalignment i mean i think it's top of everybody's mind uh not maybe not everybody's but it's a it's a big theme right now um the relative inaffordability unaffordability of of real estate um and when we're talking about like incentives of the owner specifically whether it's an individual or a fund they need the value of the asset the real estate asset to go up to sort of make their nuts and so they're highly incentivized to push the price up and bringing us back to what you mentioned about these dual collateralized structures that's why we're supporting battery finance at 1031 and why we're very bullish on the strategy overall, not just for them specifically, but people that are tenants of commercial

real estate properties or residential real estate properties, because you sort of give the owners of these properties a reprieve in the sense that they don't need the equity value of the property to go up a certain percentage every three to five years. If it's dual collateralized, they can let Bitcoin do some of the work of equity value accretion. absolutely i mean i i think it comes just just distilling that down for the the average real estate person is you have to you know explain to them that this is a a new tool a new innovation that's complementing the real estate asset right if if your livelihood and your business is you

know in and around real estate that's fantastic good right i'm not saying sell all of it and you know run to the hills learn how to homestead that's not what we're talking about here right you have a new tool that improves the asset that you know inside and out right why would you not learn it why would you not figure out how to integrate it into the into the operations into the asset plain and simple yeah and it's not only i think the benefit of adding bitcoin to the collateral package is twofold maybe more than twofold but i can think of two very good reasons off the top of my head obviously bitcoin's cagger um again it can help you increase the equity value of that collateral package um quicker arguably than you would which you're just depending on

real estate alone but then liquidity which you mentioned too i think the liquidity component is very underappreciated the ability so if god forbid something goes wrong to get part of your principal back immediately. Yeah, absolutely. I mean, whether it's the loan piece or the treasury piece that we're talking about, when I'm talking with real estate owners about this topic, bringing the conversation to where they're at, meeting them where they're at. Why should you hold Bitcoin on your balance sheet? Well, you can improve your purchasing power. You can build and maintain adequate reserves for capex and maintenance and emergencies right and then you're going to improve your credit worthiness over time right that's that's something that

the real estate owners get right they can get on board with that and that's a that's just the treasury component right now you add in this um the loan component and the conversation um just continues from there. Well, on that note, um, since you've gone public and I'm sure you've been talking to this, to many other people outside of, uh, your audience on X, how has this pitch been received by people in your industry? Um, it's, it's been mixed. It's been very mixed. I, you know, that said, I have been pleasantly surprised at the, um, at the feedback. There's a lot more curiosity and receptiveness that I initially expected, which is positive. I mean, I've had people reach out from across the country in all different areas of the

industry, right? Brokers, lenders, fund managers, contractors, and the conversation with those guys goes one of two ways. The first one is, oh, my God, thank you for saying this. You know, I thought I was the only one, which that's that's an easy conversation. And the second piece is this is really interesting. I see where you're going. Tell me more.

Right. That's the those are the positive feedbacks that the negative feedback. I mean, again, I mentioned earlier, you know, it's this is a cyclical business. We've been here before. You know, if you if you're into Bitcoin, why don't you just go buy Bitcoin? you know just dismissing it right so that tells me that they're you know that education gap is still very very very wide and we have to do you know everything we can to to narrow that gap well on that last point that's the the most common feed negative feedback that i get is

all right why don't we just use the cash to buy bitcoin why do we need to dual collateralize it Why does the real estate company hold it on the balance sheet themselves? And again, what you said earlier, like a lot of people, a lot of hardcore Bitcoiners like sell all your real estate, like get out of it, just buy Bitcoin. It's like, no, we actually need businesses and properties that these businesses actually operate in to provide goods and service to the economy. So there's got to be some sort of middle ground or bridge that sort of connects these two worlds. You can't just throw the baby out with the bathwater. You can't just everybody dumps all their assets, buys Bitcoin and thinks the world's going to be fine. It's not how it works.

And I say very, very frequently, right? I'm not saying that real estate is going to zero, right? Far, far from it. Right. It's it's it plays a vital role, like you're you're alluding to in human society, right? Shelter, business, community, culturally. I mean, pick pick one. Um, but to perceive like it's business as usual, like it's just another cycle and, you

know, things are going to work themselves out. Um, that is a very, very, very dangerous, um, approach. And to think that, you know, because you bought properties in the last cycle for four or five, six caps. And, you know, when the cycle comes full circle, you're going to be able to exit that property at similar cap rates and go about your business, I think that's incredibly nearsighted. I also think if you think that you're, again, going back to that inventory issue we have of 62% of it being built before 1990, if you think those properties are all going to trade at a premium with the

trophy assets and the class A properties, again, I think you're incredibly nearsighted. You're not looking at the entire game board objectively. Sup freaks, this was brought to you by our good friends at Obscura. If you've been listening to the show long enough, you know we care deeply about privacy, particularly as you peruse the web. It is important to be using a VPN and Obscura is our VPN of choice. That is because it is a VPN built by a Bitcoiner. For Bitcoiners, it is the first VPN that can't log your activity and outsmarts internet censorship.

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slash tftc well on that point of the sort of dated inventory what do you think happens with that or needs to happen does a lot of it get demolished does a lot of it need to be bought and completely gutted and renovated or what's the solution there yeah that's that's a tough question because it it varies so much by, um, market and property type, but generally speaking, I would say, yeah, there's a lot of just small parcels, small properties, you know, very, you know, whether they're funky shapes or inefficient layouts, um, they, they largely need to get demoed. They need to be redeveloped. You know, if someone will come in and assemble, you know, multiple parcels to, you know, get some scale and, and build something new.

Um, that's how, that's how I see that going down, but that's going to, you know, if you don't get some of the local municipalities on board, right. I mean, you're, you're just stuck in, you know, uh, a regulatory quagmire, um, for, for years. And I mean, that's one of the things that disincentivizes a lot of that activity from taking place. I mean, especially since COVID there should be, there's a fair amount of redevelopment and demolition going on across the country, but not nearly as much as it should be.

And I always come back to, you know, the regulatory burdens that are there. I mean, the time and the cost that it takes to get through zoning and planning in any one of these municipalities, whether the state is red or blue, it'll follow your mind, right? Right. And along that entire way, you have to have a team of people that are ushering it through the process. Right. You had there was so much education. There's so much Q&A that takes place with the planners. So it's not just a, you know, set it and forget it, fill out an application and wait for the decision. I mean, it's it's very, very proactive to get through some of these city governments. yeah i forgot to mention my uh og intersection of bitcoin and real estate guest kelly lanham but we

spent a whole episode many years ago probably three years ago now at this point just on these zoning and planning requirements and it seems like that's something that needs to be completely raised to the ground and and we thought when just in my day-to-day business um, you know, in commercial real estate, you always have to know what the underlying zoning is for a property, right? Cause that essentially dictates what can and cannot go on a particular location. So I'm a lot more familiar with, you know, the, the city zoning than I ever thought I would be. And where I'm at in Southern California, I mean, I, I play in, you know, probably a dozen different cities. There's, I mean, these zoning codes are 500 pages,

you know, each city and there's, you know, footnotes here and nuances there and asterisks there. I mean, you've got to have a, you know, an AI just for, for that particular city to, to get through the zoning code. And at the end of the day, the guy just wants to know if he can do manufacturing at the location. So it's, yeah, it's, it's a, that's a whole, a whole nother topic in and of itself as well. But I mean, and I think about online, I've been using the word devaluation, right? I've been using devaluation a lot. And, you know, I will admit I'm, you know, I'm trying to get a little bit of a shock and awe factor, right? You know, get your attention to some extent. I think about devaluation versus the, you know, the melt-up scenario, right? And in the,

in the short term, I think it'll be more of a melt-up situation. But there's going to come a point in that process where there's no marginal buyer for the bottom 75% of the stock. And I think we saw the very beginning of this in the 21-22 cycle. There were 50, 60-year-old properties trading it at figures that were just absolutely bonkers. So if and when you see that melt-up process occur again, where's that ceiling? And when you hit that ceiling, it'll take time for the sellers to adjust their expectations. And values will fall during that time. How long does it take? I don't know. Real estate moves a lot slower than global markets or anything in our digital world. But my fear there is by the time that a lot of those legacy owners realize what's

going on there, the train's going to have left the station. And at that point, what is the value of the property? I mean, you have land value. I mean, so you can kind of look at it as a little bit of a built-in stop loss if you have value in the underlying dirt but again on a lot of these older assets these older properties they're small parcels unless you can assemble multiple and get you know get some scale there's not a whole lot of residual value there yeah i'm being reminded of sort of the shock and all devaluation headlines i've seen denver a couple of buildings ago for a few million dollars and they were sold for nine figures not too long ago. I believe Baltimore, D.C. area, similar things, even in Manhattan.

Some of these properties are being sold at an 80 percent discount to their last purchase price. Like it seems like there definitely are pockets of the market where this devaluation is starting to happen. Absolutely. I mean, there's been some some incredible data points hit the hit the headlines. I mean, you're alluding to a lot of them. We've had a handful of them in my market here in Southern California. Again, I think that's good. Get those bases to reset. I mean, if you're an active participant in the real estate world, and you should be buying, the only properties you should be buying now are, you need to buy them out of bankruptcy, right? Courthouse steps, pennies on the dollar, get that basis as low as you possibly can, or buy it significantly

below replacement costs, right? If you can do that, then I think you have a path forward, you know, over the next five, 10 years. But that's also the first filter, right? Once you buy the property, if you can get a great location, great asset, attractive basis, from there, you need to implement, you know, a strategy similar to what I laid out earlier, right? Because if you don't do those things, you're not proactive about the operations. I don't care how great the property looks on paper, you will struggle to compete in the years ahead. So that's how I kind of see it is, you know, if you want, if you insist on, you know, buying real estate now, make sure you're, you're looking in some of those um uh those areas well that's that begs the question like how many

buyers are in a position to actually do that versus those that are fully allocated and sort of stuck with the portfolio that they've already built uh i'm i'm actually really glad you said that i mean and before i go into that i mean the what you just described right how many people can actually do that, right? That goes back to one of my earlier points, right? We're going to separate the pros from the wannabes, right? If you're buying a property off Zillow, off LoopNet, whatever, mass marketed, that one's going to struggle, right? And I'm saying this to my own detriment. I mean, I'm a broker. I do leasing and sales of office and industrial properties, but you need to have the foresight and the understanding of how to buy these assets below

their fair market value. So that's my two cents on that. But as far as these operators that have existing portfolios, they have existing obligations, that's a tough sell. There's some operators, some big time capital that's coming into these major markets, gateway markets, you know, large metros, mine being one of them here in Southern California, where they don't have any of those existing obligations to worry about. They got a couple billion dollars in cash and they're ready to deploy it. And, you know, if you find yourself in that situation, then that's a really, really incredibly strong place to be in. And I definitely think you have a path forward there absolutely one thing you said earlier discipline in what you're buying

have to have discipline in what you're buying yeah and bringing this back to sort of intersection of bitcoin in the market that you play in one thing that you said earlier that was encouraging is that you've had a bunch of people reach out from different parts of the industry from brokers to buyer sellers um contractors developing companies and that's encouraging because if each of these individuals or individual entities in these different part of the markets begin incorporating bitcoin it's sort of de-risk them all at the same time in my mind um if they each get bitcoin on the balance sheet or incorporate it into their part of the industry um in the way that that's best suited for them you can see like a collective strength building up where it's easier

to do deals and people um don't feel like they're taking on too much risk because they have this safety net for lack of a better term in their bitcoin exposure absolutely um i mean you can draw those same comparisons in the the lending space right with what battery's doing and you know those that have the the dual collateralized loans they're going to you know, fare a lot better than those that don't. And when those, you know, properties that don't have that, that Bitcoin exposure go bust, that's going to be the, you know, the batteries of the world are going to be the players that can swoop in and, you know, get, get properties a good basis. Same thing with the development community. I mean, there's going to be for the developers that,

you know, have a war chest of, you know, of Bitcoin, there's going to be some incredible opportunities um for them over the next handful of years to um acquire market share absolutely and it's kind of i was thinking through i haven't i have been thinking through this one a little bit um you have the bitcoin cycle right i mean obviously some people are you know arguing that that that four-year cycle's over with but you know whatever your opinions are there you have a Bitcoin cycle and you have a real estate cycle, right? And over this arc of time, they're going to, they're colliding, right? So I almost see you in the point of the cycle where you're in your Bitcoin accumulation phase and your education phase, right? So accumulate as much

Bitcoin as you possibly can and educate yourself on what these various components of a strategy can be right and as you're doing that you need to have a you know doing an assessment of your holdings right figure out which assets are core and which ones aren't the ones that aren't sell them get rid of them doesn't matter if you take a slight a discount on them or not get them off your books get that liquidity right and i see this kind of period of cycle going from today to maybe 2030 2032 on the long end and then from there you you start deploying your war chest you start implementing the strategy hopefully you've acquired some stuff that uh you know between now and then and you have you know a handful of doors you have a handful of buildings to go um

execute the strategy on um that's not a fully baked idea but you just kind of you got my wheels turn in there as you you made some of those comments uh but i'm kind of seeing those things collide yet yeah and well what you're talking earlier on the subject of prop tech um make tenants sticky gets you better data i don't think this applies to those two points that you made but you look at something like square did last week with the integration of bitcoin in their point of sales systems and like if you're a property developer particularly for um commercial real estate that's catering to retail businesses it's like huh maybe you lightly nudge the tenants to use square terminals and educate them about bitcoin to sweep a portion of their cash flows

into bitcoin using the square terminal um because that's the risk the tenant risk for you well play that out i love where you're going with this play that out one more step right in commercial real estate a large part of the value right that people pay the the multiples people pay are based on the tenant right it's not 100 on the property itself it's on the quality of the cash flow right so in our world we talk about credit tenants right if you got a bunch of credit tenants, that property is going to go for a premium relative to a property that doesn't. And if you have this retail center, this strip center, where you can lightly nudge or incentivize your tenants to learn and accept Bitcoin, how does that property trade in the marketplace when you go

to sell it? If you have a retail center that's got however many tenants it is, but those tenants hold Bitcoin on their balance sheet and you have the exact same property where those tenants don't. How does the market assign a risk to those two properties? How do they assign a premium? That one's going to be really fun to watch play out. So stay tuned on that. You'll have to have me back for when that actually happens. And I'll bring all the data points and analysis for you. Yeah, because I think it's very underappreciated what they launched last week. Four million small, medium, some large-sized businesses across the country with the ability to do this automatically as of last week. Who knows what the uptick on adoption of that particular feature within the point-of-sale system will look like.

But you can imagine a world where slowly but surely it starts at 5 percent, grows to 10 and maybe 50 percent of square merchants are sweeping at least 10 percent of their revenues in the Bitcoin. And it's going to be incredible the amount of data that many people have four years from now to make decisions off of. And absolutely the one thing I wanted to say earlier or a question I want to bring up is this is something I've been beating the drum about, particularly in relation to this. The square launch is a bunch of people, particularly in finance and in real estate and other markets, are sort of pointing at the Treasury, the Fed, the Trump administration, saying, don't worry, they're not going to let things go to shit. And I think that sort of consensus view on how we're going to, quote unquote, fix the problem is short sighted and people need to adopt sort of creative, bold solutions that are sort of external and inoculated from from the whims of the political class. I agree with you 100 percent. I think it's incredibly short sighted. I think the the market, you know, the the players in the market have all been, you know, conditioned for, you know, at least the last 15 years to believe that, you know, the Fed's not going to allow another a real down cycle to occur.

Right. I mean, the Fed put, you know, comment has I mean, it's everywhere. And again, I think that's incredibly dangerous. I think it's nearsighted. But, you know, when you play and again, when you play this out, let's just say that they do jump in. They jump in, they backstop it. You know, no problem. Right. We're, you know, business as usual. One, we've seen the inflationary impacts of that, but that's I'll leave that on the side for now. But if if they do that, their only tool is interest rates. Right. I mean, interest rates aren't reversing demographics. They're not reversing AI and automation, robotics, right, from reshaping business models and broader society. They're

not, they can't change the mobility of labor. They're not going to change the rise of Bitcoin as a store value, right? So all of those things are outside of the Fed's control. there's structural changes taking place in the market. And this goes back to, you know, what I said earlier is this is not just another cycle, right? This is a, there are structural changes taking place, which is why you can't assume that this is business as usual. Oh, and with that in mind, I mean, you've given a rough playbook, but for anybody listening is in commercial real estate what is the lowest hanging fruit what is the first step what is the the game plan to begin thinking about this because we've been

going for 50 minutes and i'm sure for a lot of people it's overwhelming but from your experience what uh what do you what would you advise in terms of all right you are curious about this you think it may be a good idea? What do I do first? What do I do next? Yeah. I mean, the, the first, first step is just, you know, putting your ego aside and getting educated. Right. I mean, I, I imagine that a lot of people, you know, listening to, to your channel are, are already there. Um, but you know, for the, the real estate professionals, um, that maybe aren't start, um, start getting, uh, familiar with Bitcoin, start the learning and the education journey. And as you get that, the first step is to buy some Bitcoin, allocate some of your

US dollars to Bitcoin, hold it in self-custody, experience what that is like. I mean, you should have the butterflies in your stomach when you export or send your sats from the exchange to your wallet that first time. And they don't show up instantaneously, right? I mean, you should be having an oh shit moment did i do something wrong is it gone forever have that experience go through the process and start slowly accumulating a bitcoin position once you get there now all those other avenues that you know we covered here today you know start to you know be are on the table and you don't have to do it all in one afternoon either right i mean this like i said at the top of the hour i mean i've been baking you know this everything i've said here i've been baking for

half a dozen years yeah well on the other side of that coin what would you like to see in terms of products services from the bitcoin industry would make this roadmap easier to go and tackle oh good question i mean obviously the point of sales um for for certain tenants is a big one But in the commercial world, I think the lending area is probably the lowest hanging fruit. Since I've been talking about all of this, the number of questions and inquiries I've gotten from people across the country, different products or different, excuse me, different property types, different sizes. Where can I get one of these Bitcoin credit structures? Where can I get this dual collateralized love? right and currently you know you can't it's only reserved for a certain segment of the market right

you have to have a certain size of the property so i think there is a lot of opportunity in the middle and lower middle market to provide some of these lending solutions yeah and that's just having a been on the front lines of that i think the the big nut to crack there is to get institutional capital to take the plunge to actually deploy into these strategies which is definitely beginning to happen not in earnest but it's one thing that blows my mind not even thinking about um the dual collateralized just simple bitcoin collateralized loans for u.s dollars if you look at the rates across the board um for the companies that are doing it right not using d5 putting it multi-sig not re-hypothecating the fact that it's double

digits or just below double digits is insane to me when you consider the risk profile considering the collateral sits in a wallet that can be liquidated 24 7 365 and if you're putting dollars at risk the risk that you actually lose your principal is extremely low i'm surprised that the the rates haven't come down faster as well um i i that was one i got wrong i thought the the rates would come down and you know you'd see a lot more of it sooner than we have um i mean positive thing you know high signal as you say um the fact that batteries deal in in philly there they got awarded the the costar multi-family deal of the year or developer deal of the year in that market. And CoStar, if you're not familiar, they're like the primary data source,

database for commercial real estate. Anybody in commercial real estate has a subscription to CoStar. So they're the monopoly. And for an incumbent like CoStar to issue that award and draw attention to that deal that was that was very positive and i i've shared that with a lot of different folks um in my world and they all do a double take they did what and then they got awarded what so it's it started it's opening up a lot of the conversations people are saying okay there's these things have you know various like what the utility various utility to to what we're talking about here that's been helpful yeah i guess second to last question let's paint the optimistic future for commercial real estate if this is all implemented let's

pretend like people listen to this and they go oh my gosh chris you're right let's begin implementing this immediately that happens what does the world of commercial real estate and not only of commercial real estate but beyond what do communities look like what does the economy look like if this is fully integrated? Yeah, great question. We're going to have to have another hour for that one. But the you have a much healthier and robust asset class, right? Real estate is the largest asset class in the world. It's ripe for disruption, adopting and integrating Bitcoin into it. And, you know, some of these other strategies makes it resilient. Right. And again it's it's it's going to improve your communities it's going to improve your business

it's going to improve all of your you know the the everything that comes with your life and lifestyle um i i find it you know as much as the as wall street gets all the headlines and clicks and whatnot bitcoin started as a grassroots movement and it's going it's obviously continuing that way but with the merchants you know the retail merchants adopting it the the investors using these these uh long duration credit products it's going to be a grassroots movement that continues and saves the real estate world um that to me is is um how it plays out that's how it plays out and i mean i i went through college and entered the workforce when the great recession was going down and concluding. And when the dust settled on all of that, the movies were made,

the books were written. I mean, it was very clear that there was a lot of people that knew exactly what was going on and they were doing some very questionable things. They weren't acting in the best interest of their clients. They weren't being good fiduciaries. And I don't want to see the same thing happen here in real estate. And when the dust settles on this and the movies are made, the books are written for this transition in this potential crisis, I don't want my name or any of my colleagues attached to that, that they were selling buildings, you know, in the name of a commission. They put a business into a bad lease for, you know, for a quick fee, right? I don't want my name or my firm attached to any of that so if i can go down as you know the the the crazy

bitcoin guy that tried to warn everybody i can sleep good at night with that um and i'm cool with that so that's i don't know if that was if i totally answered your question there but that's kind of how i see it yeah well we need more uh more people like you in the world chris because i think uh i think there's certainly some some froth in terms of the uh the questionable nature of some some of the actions going on in the market right now but you got to be optimistic never doom you have a roadmap for how to begin to fix this problem and i think that's maybe another thing to touch on before we wrap up i think setting expectations and my impression is that this is not going to be a quick fix. This is something that's going to take time to

integrate and you just have to commit to a 10 year view and start walking. I think that's exactly right. But 10 years minimum, um, again, real estate does not, it moves at a glacial pace, right. Compared to, to markets and just everything in our digital world. So, um, you don't, you know, you're not behind, you're not late. This is a perfect time to get started and start figuring out what the best path forward is, right? I mean, if you're wherever you are in the industry, right? Brokers, capital markets, property management, contractors, architects. I mean, it's crazy how many different industries real estate touches and affects, right? So wherever you are in that industry, I challenge you to be the first one in your firm or the first

one in your area to start talking about this, get your team, get your partners talking about it, be the first mover to adopt a Bitcoin standard, get it on your balance sheet and start harnessing its power. And that goes for every industry for that matter, actually. Insurance, medical, pick one. Yeah. That's what we need to do as Bitcoiners. We need to spread it out to all these different industries that power our economy.

Yeah. And again, I'll reiterate it. It's the solution that will enable you not to have to point to the Fed and the Treasury and say, don't worry, they're going to fix it. It's like you don't need to wait for them to manipulate interest rates or do a massive bond issuance, inject stimulus into the economy. You can begin to fix your own balance sheets. And collectively, if enough people do that, we can look up and say, hey, we actually didn't need their help. We could do this ourselves, which is incredibly empowering and hopefully exciting for many people. Because I think a lot of the market, not just real estate, just the American economy is almost held hostage to the whims of the Fed and the Treasury more and more these days.

Yeah. And I mean, as much as much grief as social media gets and, you know, the various, you know, negative side effects of social media, you know, there's been some some positive things. And that's flat out getting the you know, getting the education, getting the knowledge, you know, getting the other side of the story out there and, you know, letting people make their own decisions. Right. I mean, I I feel like, you know, people talking about macroeconomics these days and now they're dropping the buzzword, you know, debasement trade. I mean, these are from people that, you know, they've, you know, never before are they, you know, interested in these topics or, you know, exploring these particular areas. So, again, I think that's the, you know, the positive side of, you know, decentralized communications and media is, you know, how many people were able to access and, you know, telling them the other side of the, you know, why you may not need a Federal Reserve as part of that. Yeah, there's a lot of noise out there, but there's also a ton of signal. We just need to know how to find it. And hopefully now you found Chris and you can continue to follow him on his journey to implement Bitcoin into the commercial real estate market.

So, Chris, really love this conversation. We'll have to do it again at some point, maybe at the beginning, first quarter of next year. and uh where can anybody who's so curious find out more about what you're up to um get access to the content you've been making um yeah thanks for having me by the way this was awesome and i look forward to to keeping you and your listeners up to speed on the the commercial real estate markets uh you can find me on twitter um i do have a nostre account but i'm still trying to figure it out there's a little bit of a learning curve i haven't gotten uh, um, over on that one, but Twitter is the primary, um, I post the videos on YouTube as

well, but Twitter's the main source. Um, and once you get to my Twitter, you can, you know, find all my other, um, uh, other channels, what have you. We have a link to that in the show notes. I hope you have a, an incredible Tuesday on the West coast, Chris. And, uh, yeah, we'll do this again at some point next year. Sounds good, Mario. Thanks again for having me. Um, This was awesome. Peace and love, freaks. Thank you for listening to this episode of TFTC. If you've made it this far, I imagine you got some value out of the episode.

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