This week on the podcast, Matt sits down with Zach Wiegert, Managing Principal and Founder at Goldenrod Capital Advisors. The episode begins with Matt and Zach diving into Zach’s journey from professional football player to commercial real estate to leading acquisition developments as Managing Principal and Founder at Goldenrod Capital Advisors. Zach shares how lessons from his football career have translated to business and how he helps his team solve problems on a daily basis. They then discuss some of the projects Zach has worked on over the years and what he has learned from them. The episode concludes with Zach offering advice for graduating college students.
Episode Transcript
Zach Wiegert 0:00
There's a lot of areas that you study in, in college that won't apply in whatever
business you go into, but the general knowledge of business applies to everything.
Matt Waller 0:12
Excellence, professionalism, innovation, and collegiality. These are the values the
Sam M. Walton College of Business explores an education, business and the lives of
people we meet every day. I'm Matt Waller, Dean of the Walton College, and welcome
to the Be Epic podcast. I have with me today, Zach Wiegert, Managing Principal and
Founder at Goldenrod Capital Advisors. Thank you so much, Zach, for taking time to
visit with me today. I really appreciate it.
Zach Wiegert 0:47
Absolutely, Matt, looking forward to it
Matt Waller 0:49
Zach, you know, your background is pretty remarkable. You formed Goldenrod back in
2005. So you've been doing this for quite a while. But I'd like to back up and start
to talk a little bit about your previous experience. I know, you had been in commercial
real estate investing and developing for 10 years before that. But before that you
had been in the NFL for 12 years. And you had played for the Rams, the Jaguars, the
Texans. I mean, just being in the NFL for 12 years is something you must be tough.
But you also played football at the University of Nebraska. And you were a part of
the undefeated University of Nebraska national championship football team back in
1994. And I remember it well, because I went to Penn State.
Zach Wiegert 1:45
Oh, yeah. Yeah. For Kerry Collins and Kerry Collins, Ki-Jana Carter, I know all those
guys.
Matt Waller 1:51
Yeah. But also last year, you were inducted into the College Football Hall of Fame,
which less than .02% of all college football players and coaches have been inducted
into. So congratulations on that.
Zach Wiegert 2:07
Thank you.
Matt Waller 2:07
And of course, now you have led the acquisition development of billions of dollars
in commercial real estate. You're currently overseeing a multi billion dollar fund.
So you've got you got a lot going on. And a terrific background. I'd like to start
just a little bit with some very basics. I mean, you have an uncommon experience,
you had an uncommon experience in college. And I should mention, you majored in economics,
which, you know, that's a demanding major, especially if you're playing football.
Did you find that to be demanding? And did you, you must have enjoyed it, or you wouldn't
have majored in it I suppose?
Zach Wiegert 2:47
Yeah, I, you know, I think economics is something that it's like, you speak the language
or you don't, I mean, it's supply and demand. And and you know, the more scarce something
is and the more people want it, the more it costs. And so that's kind of how my mind
went works. And kind of a mathematical, I can remember numbers forever, I have a hard
time with names. It's kind of how my mind works. So it was a good fit for me. And
I think it's done me well in my whole life, because it's really the basics that applies
to everything in business so
Matt Waller 3:20
It really is, it's such an important, especially getting the basics down like microeconomics,
macroeconomics, money and banking. Once you have that down, you can apply it to so
many different fields.
Zach Wiegert 3:33
It's really human nature, it applies to everything really not just in business. I
mean it, you know, like it, you see people waiting in line for an iPhone, it's, it's
always what it is they charge what they want, because that many people want it, they
only make so many at a time. So it applies to more in real life than people think.
Matt Waller 3:51
Absolutely. You worked for 10 years in commercial real estate before you started your
current company.
Zach Wiegert 3:58
Sure
Matt Waller 3:59
Did that experience in college of having a lot going on help you learn how to manage
a lot of different kinds of activities?
Zach Wiegert 4:08
Oh, absolutely. I mean, it's, I guess a big thing I try to get across especially our
younger employees is you just, you know, you you make a schedule and you set your
schedule and when you have free time, get it done procrastinating, it'll be there
waiting for you at some point. So you might as well just get it done. And what I found
as as, as as you set your schedule, if you just do it, attack the problems and get
them fixed and done, the more free time you have. So sitting around knowing that homeworks
waiting for you or knowing you have to go to practice you just do it and do your best
and move on. And I think that applies and everything in business, you know, now we
have projects in 13 different states and you know, so what I do on a regular basis
as the general partners, a little bit different idea as when I first started when
I was managing all portions of a project. And now I'm just in on the major decisions.
You know, structuring deals, things like that, because there's so many so many hours
in the day. So, it it really gets into time management.
It's so true, having a schedule is so helpful. And then addressing problems, as you said, as they come up, rather than just sitting on them and hoping they disappear.
Yeah, they found they just don't go away. They just actually usually the longer you let them sit, the worse they get. And so we know our big thing with our meetings now and and in football too when you have great coaches is the same thing. And I use a lot of those lessons I learned playing sports to business is you know, you fix the problems, if things are going well. That's what you expect to happen. You look at film to fix the problems you look at, and you go to meetings with your your people in your company and say like no, no tell me the bad stuff. If you don't tell me I assume it's good. So and you know, people always laugh, they say, well, what's your job on a daily basis, I go problem solving. That's what I do on a daily basis is fix problems. So that's the best way to describe it is that you know. And that applies to anything in life for your listeners, there's an issue, the best thing you can do is, is solve it as quickly as possible, because they most often just disappear.
Matt Waller 6:23
You know, this idea of the film's you look at in football to see where the problems
occurred. And in meetings, your your metaphor to using a meeting to review what were
the problems? You know, some people are more inclined to share those kinds of things
than others. How do you get your team to, to really get into that groove of sharing
the problems?
Zach Wiegert 6:46
Yeah, it's interesting, it's kind of a learning process. You know, we'll have people
managing specific parts of the business or specific projects, and something will come
up, there'll be a change order in construction or something will come up. And the
more inexperienced people, at least in our company will say, Well, I've got contingency
money, I'll make it up somewhere else, or I can fix this on my own, or this and that.
And obviously, you want self starters that are willing to go attack the problems themselves
and fix them, but we kind of have a rule, like if you don't bring it to the to the
meeting, you own it. So it's your problem until you share it with the meeting. And
so I think I have found that when you're in a room of other smart people, if if the
problem was brought up in a setting like that, there may be as someone who has experience
with that specific type of an issue before they can comment on it, that can really
help you solve your problem. So yeah, absolutely. You know, a lot of people, you don't
want to come to the meeting and admit you have an issue with something. But, you know,
the best we can we try to get people is like it's your issue until you bring it up.
And so the sooner you bring it up, the sooner we get it solved and move on. I mean,
there's always going to be problems that come up in any business, it's just, the sooner
you can fix it the better, it's just like football, do you have on film, if you have
a weak part on your offense or defense, the other team's gonna watch film and expose
it until you fix it.
Matt Waller 8:10
This idea of exposing problems when they occur, and then trying to solve them as a
group. It's like, as an individual, you can use your knowledge and your capabilities,
or you can use your network, your teammates. And if you as you expand, even if you're
have a very high IQ and very competent, you get a few other people involved, you've
already exceeded that easily.
Zach Wiegert 8:35
Right, right, especially when your team has people with other core competencies. You
know, we have in house legal, in house accounting, tax. So there's no one can be a
master of all those things, design, construction. I meean we we have all these people
that's specifically what they do all day. And a lot of times it's just you know, they're
on another project and experience something similar, they were in a meeting heard
how someone else fix that problem before. So a lot of is just experience and you can
read all the books and be the smartest person in the world and they don't know how
to fix it because you've never experienced it.
Matt Waller 9:05
So you you you had been doing some of your own investing and developing for 10 years,
and then you started Goldenrod Capital Advisors. How is Goldenrod set up? Do you have
limited partners as investors? And are you set up like a regular fund? Alternative
Investment Fund?
Zach Wiegert 9:24
Yeah, so we're a registered investment advisor SEC registered investment advisor,
which only like 3% of real estate funds are because you don't have to technically
register but all of our numbers are audited. And we want to do that just kind of separate
ourselves from our competition. You know, our all of our returns are audited. And
so you can rely on our numbers when we give them to people. And then yeah, we're just
a limited partnership. I'm the general partner of the fund. And they're all the investors
are limited partners. You know, everyone gets their pro rata share of depreciation.
Everyone gets their pro rata share of returns, distributions, all that. And it's really
a central US focused fund. We've always kind of done business from Salt Lake to Atlanta,
Omaha to Dallas, we have offices in Omaha, Dallas and Atlanta. And in house, we have
about 52 people that work in house and I say in house, because if you counted all
the people at the property management level at the different properties, you'd be
in hundreds. But but that's, that's and we've we kicked off our first fund in 2017.
And now we're actually going to have our first opening on our fourth fund here in
July.
Matt Waller 10:38
What is your waterfall structure in terms of like 2%. And then
Zach Wiegert 10:43
Yeah, it's pretty typical, I would tell people and I was just meeting with some potential
investors. So it's basically return 100% return on capital of the investors, and they
get a 7% preferred return on their money that the entire time until they get it all
back. And then after that, it's 80% to them, 20% to us. But the difference between
us and a lot of funds is our waterfall structures on the whole portfolio. So in any
given fund, we could have 12 to 20 properties. And all those properties have to perform
above that preferred return on the entire portfolio, a lot of funds are set up where
they do a waterfall per project. And I tell investors to be careful of that because
obviously the real profitable stuff will sell early. And then they have what's called
a catch up, where on the back end, there supposed to be a clawback monies they paid
prefer if the other properties don't perform. And you see a time and time again, you
have a fund with 20 properties, they sell off the first 10 make a bunch of carried
interest or in the waterfall and then the other properties don't perform and sit there
and drag down the returns. And then they have to go back after it and get there to
get the waterfall back. So ours is very investor friendly. And I'm a large investor
in my own funds as well. So I'm as motivated for returns as our investors and anyone.
Matt Waller 12:05
That's great. You know, after you had been investing, doing your own investing for
10 years, your own development, to create a fund like this, you had to learn a lot,
I would think you'd have to learn about private placement memorandum and the limited
partner agreements and all of this kind of thing.
Zach Wiegert 12:24
Subscription agreements? Yeah.
Matt Waller 12:26
How did you learn that?
Zach Wiegert 12:27
Yeah so, I'll give you just a little bit of history. So I so I got drafted in 1995,
in 1996, I started doing real estate, I liked the idea of physical assets, something
tangible. And because I always said, well, even if existing company in there, you
still have a physical asset that has value. I mean, there's only so much land, there's
only so many great locations. So I always kind of liked the idea, there was something
there were like a stock to me was air. And so that's why I originally got into investing.
And then when I retired in '07, I had already acquired a pretty good portfolio of
assets over the time I played. And then from 2007, till our first fund kicked off
in 17, we did, I don't know about a billion for real estate projects before we got
in the funds. So in 2015, I had a conversation with my partner and and he was he had
said, you know, they have a family office, it's large, and they would like to put
money into invest with me as a fund because they're not really active business investors
any longer. And so I spent two years going to New York, San Francisco, all over and
looking at different types of funds and structures. And like you said, you know, limited
partner agreement, draft subscription agreements, all the things you had to do to
do that. And you know, just kind of found like, I didn't like funds that only focused
in a single asset class. So you'll see a lot of funds that only acquire apartments.
Well, in the last five years, it's really hard to acquire apartments and make any
kind of return. So that that didn't make sense to me. I looked at funds that only
did development, ground up development, which prior prior to when I retired until
2017, we primarily did ground up development work. And we just found that was the
highest return on investment. And that didn't work because people like to get a distribution.
And so there's such a lag from the time you start construction, complete construction
stabilized and then put on any cash flows. It's a long leg so basically got in a fund
that made sense. If you're going to build a diversified portfolio for someone you
do a mix of development and acquisition. And then you know, you'd be diversified in
different product types, so office, multifamily, industrial, medical, all those which
we've done all those assets prior. And then that gives you the ability to diversify
portfolio in different markets. different product types and the acquisition which
creates cash flow and development, which creates growth of value. So basically, any
one of our funds is its own diversified portfolio of different asset classes, different
locations, construction, you know, ground up construction and acquisition.
Matt Waller 15:20
A lot of NFL players, I'm told, I don't know this firsthand, a lot of times they don't
necessarily use their income as wisely as you did.
Zach Wiegert 15:34
Yeah, I like to think I've done a good job managing my income I, I wish where I got
drafted and how long I played and how many games I started. I make what they make
now. But I can't complain. It was a lot back then. So. But yeah, I'd like to think
I've done a good job growing, growing my, my assets since I retired, I had one of
the smartest real estate gentleman I've ever done business with said, you'll make
way more doing real estate, you're going to just have a real knack for now. So I was
like, yeah, he must not know what my salary is playing football. And he's right. And
it's been it's been good. And it's just, you know, it's so compounding with real estate.
And it's such a great after tax asset to be in. So,
Matt Waller 16:16
So Zach, what are some examples of projects you've learned a lot from?
Zach Wiegert 16:22
I have to say, I probably learn something on every project. You know, as time has
gone on, I went from when I first retired to, you know, doing the architect contract
construction, contract financing, oversaw the construction management of it myself,
did the draws, you know, every single phase of projects, when you're managing two
or three investments at a time, you can do that. To be more on the structuring finance.
The big you know big picture wise, I always had a real and really liked getting into
design, I always thought I was I should have been architect at some point in my life,
I kind of see things in 3d. And so of getting into the design construction piece is
still really fun for me. I don't get as much time doing it as I used to, but I still
weigh on every design and construction of our any projects we do quite a bit. But
yeah, you know, a sec we talked about earlier, you learn from from failures, I found
what we're good at. And, you know, we need to stay focused on that, I'd say my biggest,
you know, bad investments, and these are my own investments before I had a fund. You
know, everyone was building houses in Scottsdale, Phoenix area, and we thought we'd
get into do a single family development and build. So you know, buy buy a, an area
put in all the improvements and sell lots off. And, you know, over a 10 year period,
we got all our money back, but it wasn't I would not call that a win by any means.
Another big retail development, we thought they'd let us build basically, to what
our plans were we submitted to the city, and then they came back, and said we don't
want apartments, we want this, we want this want this. That was you know, hey, when
you're doing your due diligence on a property, better make sure that the municipality
is going to agree with your plan before you close on the land. That's a big lesson
but it's not nothing's done until it's done, and signed. So that's a big lesson to
learn. People just you know, taking someone's word for it never seems to work. And
then we had a unique deal, a bank actually got taken over by the FDIC, and as you
know, as in Lincoln, or my college town, so I thought I knew it well. And I say like,
we're buying this so cheap from the FDIC, there's no way it can't make money. And
this was a lesson you learn in real estate about there's certain locations, certain
buildings and towns that just have a bad reputation about them, and you can't you
it's hard to get over that. You know, and that was one of them as I you know, people
had a bad taste in their mouth about the bank going under and how that what happened
and it was hard to get tenants to take it. And all three of my examples, we ended
up fine but you know, an IRR on getting your money back over 10 years isn't a very
good return. So I count those as big losses but those were three totally different
situations and you know, that didn't turn out the way you'd hoped. But they're all
huge lessons as far as for future developments that and other projects we've done
just learn your lessons on you know getting all your I's dotted T's crossed stay in
your lane don't get into single family homes if you don't build single family homes
and you know, just because it sounds like a great idea and they're just astigmatism
is with certain areas and towns or you know, a lot of time the bridge is a barrier
in a town and on this side of the bridge people just don't cross over this side and
places like Pittsburgh, there's boroughs all over and people shop in that borough
they don't go the other borough. It means you just gotta learn. And that's why real
estate is such a local thing. You got to know the local partners to make it work.
Matt Waller 20:07
Zach to close our conversation out what message do you wish every graduating college
student could hear?
Zach Wiegert 20:15
I would say and this is just kind of my personality. So it probably always more me
is passion, have passion for what you do. And I say that you're you may take some
jobs that weren't your dream job to start. But you never know when the opportunity
is going to knock. If you have passion for what you do. You could be a waiter, wait
tables in a restaurant, and you meet up, you wait on the right person, and you do
it with a smile on your face with passion that could turn into something as you go
through life. It's amazing how many times you run into people that you met before
in a position you never thought they were going to be in. And so one you know, do
things have a smile on our face, be truly nice to people, but people can tell if you're
passionate about what you do. And to me all the people I know that are successful
are passionate about what they do on a daily basis.
Matt Waller 21:09
Boy, that's so true. I've definitely observed that.
Zach Wiegert 21:12
You can take something that seems pretty simple and be very passionate about it and
can turn it into something big.
Matt Waller 21:18
Well, Zach, thank you so much for taking time to visit with us, really appreciate
it and it's a pleasure to get to know you.
Zach Wiegert 21:25
Very nice to get to know you as well and I appreciate it.
Matt Waller 21:28
On behalf of the Sam M. Walton College of Business. I want to thank everyone for spending
time with us for another engaging conversation. You can subscribe by going to your
favorite podcast service and searching Be Epic. B E E P I C
Matthew A. Waller is dean emeritus of the Sam M. Walton College of Business and professor of supply
chain management. His work as a professor, researcher, and consultant is synergistic,
blending academic research with practical insights from industry experience. This
continuous cycle of learning and application makes his work more effective, relevant,
and impactful.His goals include contributing to academia through high-quality research and publications,
cultivating the next generation of professionals through excellent teaching, and creating
value for the organizations he consults by optimizing their strategy and investments.
