Unlocking Capital with Sale Leasebacks with Bryan Huber

0:00Hey there, this is Casey with the M&A Launchpad Podcast. I want to let you know about October 25th. Put it on your calendar. This is a do not miss one day event. There's going to be incredible headliners, but really at the end of the day, you're going to get a chance to talk to people that have made acquisitions, learn from some of the challenges that they've made, because this is definitely a challenging process. But more importantly, there's going to be people there that can help you and support you along the way from great vendors, quality of earnings. How to run the do diligence process. And how do I get financed? How do I raise capital? How do I structure all of these things? October 25th in Chicago, we're going to be gathering. It's going to be hundreds of people that are all focused, like-minded people. And man, everyone that's come has given us incredible feedback. So mark your calendar, October 25th in Chicago. We look forward to seeing you there. All right, on today's episode, we interviewed Brian Hubert, where we did a deep dive into what a sell lease back looks like. If you're out there looking to buy a business and there's a piece of real estate attached,

1:01right, it's not something to get scared of. It's really about candy structure, something that actually can make it a very, very valuable part of the transaction. So Casey, what were some of your takeaways? You know, I've got a chance to meet Brian personally. He's got to be sponsoring a Chicago event. I mean, just a great guy. But, you know, one of the cool things that you find in this sale lease back world, which I'm relatively new to the conversation, if you're hearing it for the first time, don't be shocked, it's different. But there's just, there's a lot of different things that can happen inside of a deal. And as you're structuring a deal. And a lot of times, we just kind of look at the real estate, put it to the side and we go, okay, we'll just pay rent or we'll do these things. But if you start adding into your repertoire, you know, not only do I understand how this financing works, not only do I have this structure works, but now you've got another tool, which is called sell lease back, which that sell lease back opportunity can free up some capital instead of having to bring investors in. You can making it dilutive. You've got to, you've got to a vehicle to find some more cash. And so, man, to me, it's just a beautiful tool.

2:02I keep learning more about it because there's a lot of facets to it, but man, there's a lot to it. No, I agree. And you know, the sell lease back, it's a little bit more of a complex tool, but it's a very, very powerful tool. So make sure if you're out there actively looking to buy a business, just that you understand it, because again, it could really turn some deals that may not, you know, pencil out into something that great and just home runs and so lots of details on out of this episode. Welcome to the M&A Launchpad podcast with your host, Casey and Ferris with Equity Launchpad. On this podcast, you will get insights on acquiring, investing in and selling profitable businesses in the lower to middle market. Whether you're a business owner, investor, or a spa entrepreneur at Equity Launchpad, we will provide you with the knowledge, guidance, and capital to navigate the world of mergers and acquisitions. Hey, guys, go ahead and just pause the podcast for a second. When you're buying a business, you need to ensure the financial health of the company. The quality of earnings is mission-critical. It doesn't matter what size business you're buying. Patrick, O'Connell, Advisory Group, they're dynamic, they do a great job, they're going to look over your shoulder, they're going to make sure that you're doing the right thing.

3:03And this guy's done over 200 buyers successfully, just like you. So reach out to him and it's O'ConnellAdvisoryGroup.com. Click the link in our show notes. Can't live with them. Hey, Brian, welcome to the show. Hey, Ferris, how are you? I'm good. I'm good. You know, just another day in paradise. So for those listeners today, right, we're going to talk about you and kind of your company and what does a cell least spec look like. And so for the listeners, do you mind just giving people a brief overview on kind of yourself in the company? Yes, of course. So I'm a partner with SAP Capital. We are headquartered in New York. And by trade, our organization is real estate brokerage. And what we specialize in is single tenant net lease assets. So that can come in the form of office, retail, and industrial properties. And the way we cover the marketplace is twofold. We work with real estate investors that are buying, selling,

4:04developing your traditional national tenants. So think Chick-fil-A FedEx 7-11 McDonald's. Very iconic, high grade investment class tenants. My side of the house, I lead the facility's back division. So I work specifically with companies that exist to make products, provide services, and or administer care. And often we're advising acquires of operating companies and educating them on how they can use their acquisition candidates real estate more effectively by improving the lease hold quality of the owned and lease properties. And using that is a source of acquisition financing. The sale lease back asset category of net lease commercial real estate.

5:06You know, when I started in the industry, it was an $18 billion market cap. Today it's exploded to about $38 to $35 billion. So basically there's a $30 billion demand stream of real estate investors that want to pay acquires of companies to keep these tenants in their buildings. And that can be used as a source in place of traditional financing like SBA, debt, equity, and other forms of traditional financing. So I'll pause there and feel any questions. Moving questions, you know, and I just want to say I've got to know you really well, Brian, so you know, appreciate you joining us today. I will say, man, I was introduced to a sale lease back probably about 18 months ago. I'm being an entrepreneur, acquisitions, all those great things. When you're in the SBA world and you're in some of the smaller SBA, you know, SMB type loans, you know, the sale lease back isn't a conversation.

6:08But as we got into bigger acquisitions, we realized that this thing called a sell lease back, right? It's an actual very viable tool that can help people out. So just in short term for our listeners, let's just break it down really simple, right? And really quick, just to add, right, to Casey's point, most listeners, if there's a piece of real estate involved in a business, one or two things happens, they figure out how can I bake that into my SBA loan and there is a path there if it's smaller? The alternative option is, man, this is too big. I can't buy the real estate. I mean, if the seller wants to sell the real estate, well, then you're kind of in a bind, right? But the sell lease back into the tool will really unlock that. So we're kind of dive into that now. Yeah, exactly. Or the alternative is, you know, I'm a acquire of companies and, you know, I don't want my capital tied up in lending buildings, because, you know, I want my assets exposed, my capital exposed to the operating company I'm

7:08buying based on, you know, multiple of cash flow. I want to improve that cash flow. And then I want to exit for hire multiple than I paid. And, you know, I think that's where we should probably start with, you know, the sale lease back of vehicle and in tool. Yeah, it's broken down. In commercial real estate, the language is cap rates. And in M&A, the language is, is multiples. And, you know, the reason a sale lease back can be an creative strategy for financing and acquisition. You know, let's take a glazing business that we structure the sale lease back for in 2022. It was a Dallas-based lower-middle market private equity sponsor add-on to an existing platform. And, you know, this glazer did work for, you know, predominantly education.

8:12And this add-on was staying glass windows. So it provided them with an opportunity to enter, you know, the religious market. So it was a small add-on. Five million dollars came with, you know, a 30,000 square foot building. And, basically, we used the tenancy and the lease commitment that the sponsor, you know, was going to sign on for to finance the acquisition where that the sale lease back provider showed up at the closing table with three million dollars. So basically, you know, financing more than 50% of the add-on, by just, you know, signing a one-turn lease and putting that in place in order for, you know, the equity sponsor to not have to draw on debt or draw an equity or take on, you know, incremental debt toward that platform.

9:12And actually, let me pause you there, right? Just to kind of really get our listeners around us. The sale lease back, what are you doing? You as the acquireer are selling that rights to that building to an institutional or quasi-institutional company through Brian, right? And they are buying it and paying you based on the rents that you are paying. And what's the power here, right? It's a couple of things. It's a, it's a way to transact the real estate. So if you have a seller that wants to offer the business and the real estate, it gives you a path to sell it. But be and more importantly, right? It's a way to not only get stability in the lease, but a way to convert your multiples on a business into real estate caps, right? Which are much better. And so a dollar in a business at a 4x multiple really can be converted into $10, $15 in a real estate valuation. And so it's a way to use that as an opportunity to get cash out in that process to then apply to buying the business, right? Brian, that I capture that sinkley as possible?

10:12Precisely. Yeah, and Jeff the Glacier example. I mean, keep it. So the Glacier right guy wants to buy, they want to buy an add-on. So they're going to buy an add-on business. Let's just say what was it? $10 million? $5 million purchase. $5 million purchase. Did that include the real estate or didn't include the real estate? That includes the real estate. They're paying three and a half, four times. And then we're able to monetize the real estate to a sale lease back investor that's looking for a fixing return. And they're paying rent multiple, the interest of the cap rate of close to 10 to 12 times. So while we are going to be incomparing the P&L with a little bit more fixed cost because we're able to monetize that asset at a higher multiple, this is an creative avenue to finance acquisitions. So every dollar you take off of the P&L because your rent is going up, you're being given $12 immediately, so to speak, right? 10 to 12, kind of like you said, whenever you do the

11:13inverse of the cap rate. Precisely. And that's the boot of that arbitrage, right? Now they able buy the company, they probably were able to get it loan for $3 million, not have to bring that additional equity to the table and it purchased the new business or they had the cash, they had $3 million in cash, they just didn't have $5 million. So they're able to use that lease back and make that acquisition. Yes. Another example of this is, one we're working on right now, in Pennsylvania, it's a business, Casey, I think you'll appreciate this because the profile of the business owners, 270 year old gentlemen that have been in business together 40 years, been in this building for 30, do about 10 million of revenue and consistently one and a half million of EBITDAR and the equity sponsor that's purchasing this business, the way they've been able to structure it, it's about a nine to $10 million buy out, 4 million of SBA debt,

12:192 million of seller note and then the sale lease back is going to contribute about high 2 million, 3 million. So for first time business buyers that don't have a lot of resources or don't want to take on the dilution of equity partners, this was an accretive strategy to use the real estate offer a lease on it and have it contribute toward the capital stack. And Brian, do you think that that's where SAB and what you guys do kind of makes you also special, which is the normal like when I was introduced to sell these back, it's almost like hey, it's got to be, it's got to fit this box, it's got to look like this, it's got to have this much EBITDAR, it's got to have this, do you guys just kind of make, are you really flexible in regards to getting these done, have unique ways to get it done, because it sounds like what you're talking about right there, right? It's a two-million revenue business, it's not some unbelievably, you know,

13:20large business that you have to go to some massive institution to maybe buy these leases, but you're able to help that person get that $10 million business done, because you guys, you just got to be real creative, right? You got to be able to find those partners that are willing to take that lease. Yes, so I think, you know, what differentiates SAB and the marketplace, you know, relative to other sale lease back placement advisors is that, you know, we've adopted approach for true transaction professionals, and you know, I often like to relate it to, you know, the quality of earnings report, right? A Q of A, you know, why would you not be diligent saying, your acquisition targets, owned in these properties to the same standard, and, you know, what we're doing, you know, on a Priya Loi basis is, you know, taking a look beneath the hood, seeing what

14:21rents are in the sub-market, and, you know, making a recommendation on how much, you know, the business rents, the business can support, but also, you know, what's geographically replaceable, and I think what's unique about, you know, where we sit, being in New York and, you know, having access to private investors in 1031 exchanges that, you know, often the options that they're looking at are investment grade tenants, think of, you know, the 7 or 11 to McDonald's that I referenced earlier, and the cap rate yields on those are super compressed, you know, call it 4 to 6%. You know, so for those private investors that are, you know, looking for a little bit more yield, you know, to diversify with their portfolio, we have a dedicated 1031 placement team at SAB that, my business partner, Michael Scally runs, and that's all he does. He works with first time

15:24triple net lease buyers and educates them on, you know, the different fruits, flavors, and categories of properties, geographies, but most importantly, the credit composition of the entity guaranteeing the lease, and for investors that, you know, are buying multiple properties, sure, they might buy that McDonald's at a 4 cap to have that stability, and that, you know, reliable rent role. But they might also, you know, want to add some yield to that portfolio. So where we've been effective on some of these, you know, smaller SMB transactions is bringing that category of, of say, leaseback providers to these properties doorsteps, and minimizing the execution risk, and, you know, providing more certainty and maximizing value. So yeah, maybe there's some questions around it, right? So, you know, have you done the holy grail of sell leaseback, which is, I'm a buyer, I find a business, and I essentially agree to buy

16:28the real estate and the business from the owner, but get it 100% financed through the sell leaseback, and essentially buy the business for close to zero dollars. It's a really great question. Yes and no. No in the context that in a platform investment, that's very challenging to pull off, because if, you know, the acquirer does not have any, quote unquote, skin in the game, any of their capital at risk, you know, basically what you're asking the sale leaseback provider to do is to take on equity-like risk without any upside. Their upside is, you know, is capped at the lease stream, that they will be collecting over, you know, the course of their ownership of that property. So often, you know, the sale leaseback investors don't like to take

17:34that level of risk because they don't, you know, your landlord is not an equity partner, your landlord is not a lender, so they don't have any control over, you know, the operating assets and the ability to dictate and mitigate the success of that tenant and that organization. So I think, you know, that's more of the beauties of the sale leaseback tool. It's, you know, you're, like I said, your landlord's not your, your equity partner and a lease doesn't have covenants that, you know, alone would typically require and usually it doesn't require personal guarantees or personal recourse, but in the instances where, you know, sponsors, putting no equity in the transaction and all that's challenging. However, we have been able to successfully do that with add-on acquisitions. So for instance, there's an existing lease guarantee and platform that we can leverage and, you know, that platform is able to bolt on a smaller business

18:42for say, you know, five million dollars and, you know, we're able to make sense of the rent and cap rate scheme for five million dollars, you know, that's where we're able to fund 100% of add-on acquisitions, but the sale leaseback providers often can't want to see that, you know, there's a meaningful equity contribution in that platform and they're comfortable with that risk because they're not just getting the lease guarantee of that small business that's getting added on to the platform, they're getting the platform level guarantees, so there's more diversified exposure, you know, on their ability to collect rent. Got it. So maybe let's dive into that a little bit then. What, I guess what is the smallest sell leaseback that can be done? And I don't know if that's in terms of purchase price of the business of the real estate or is it in revenue on the business? It's kind of a conversation that Casey and I actually had a couple days ago. And so what do you guys look at in terms of size

19:42or maybe your institutional buyers, right? Like is there a size limit? Because I'm thinking, you know, some of our listeners are searchers. They're maybe looking at, you know, a business that does three million dollars of revenue and maybe owns a $750,000 piece of real estate. Is that something that is sell leasebackable, right? And kind of how do you guys look at that? Sure. So I would say it depends on geographic density and property category, right? So why I think that's important, geographic density, like if that building is in Wadley, Alabama versus Lakeland, Florida, you know, the ability for that landlord to take on that risk and retenit that space in the event that, you know, the legacy tenant that they're doing the sale leaseback with defaults for whatever reason, you know, the probability of relitting that space is much higher in Lakeland. So thinking back, you know, early in my career, there's a small addon

20:45that we did actually in Lakeland, Florida. It was for like an IT service business and they did, you know, back office had a small data center. So 30, you know, very, very small, like 3000 square foot office condo. So that we did that transaction. It was like a $750,000 sale leaseback in 2018, 2019. So I would say, you know, geographic density played a role there because there's, if you got the building back, there's tenants that would be knocking on your door to lease this base. And then also plate size, right? So that's why I said earlier, we have to think about, you know, office industrial versus retail, you know, office, single tenant office. So I'm not talking about professional office, high rise office, like in Dallas or New York, but medical office buildings, daycare centers, you know, autism clinics that, you know, span call it 3000 to, you know, maybe

21:5120,000 square feet of single tenant, single storage, free standing space. The price points on those transactions, you know, will more likely range in the one to three million dollar domain because we just don't have the square footage to spread the rent around. Whereas, you know, with industrial properties, when we're talking about 50 to, you know, 500,000 square feet, there's, there's a lot more rent to allocate across that footprint. So that's, that's where the price points get bigger. So what I would say to answer your question for industrial, it's probably about two and a half million dollars for office and retail. It's probably about, you know, a million dollars with the, you know, asterisk, depending on geographic density. And it's also, it also depends on the business itself too, right? There's almost like multiple layers, right? So you say, okay, a million dollars on, you know, single office, single tenant type office. However, the business also

22:56has to be able to not only support today's rent, but it's got to have a business plan to, to keep up because that rent goes up to and a half, three percent every single year. So you've got to also be able to support that. So I imagine there's another component to it other than just the real estate. Yeah. No, Casey, great, great question. I'm glad you're bringing it up because I would say like the, the three commandments on her writing any sale lease back boiled down to three variables. Number one, the, the credit composition of, you know, the entity guaranteeing the lease. So like, how much revenue and even as the business do. Number two is going to be the, the lease structure. So is it a 10 year term, a 15 year term, a 20 year term, the longer the length of the lease commitment and the escalation structures that you're talking about, like, you know, are they two percent, three percent, are they CPI? You know, so how does, how might protect it against inflation

23:58as, as the landlord? And then, you know, number three is, is the real estate, like, where's, where's the business located? And what corner is it on in that sub market? I would say like that third variable is usually the, the least important because, you know, when the sale lease back investors signing a 15 or 20 year lease, like, that's a bet on, on the tenancy. So often, you know, what they're doing to underwrite and mitigate that risk. And what we're underwriting for, you know, when we're working with acquires to help them, you know, to help prepare indications on how they can incorporate this into their underwriting to help finance the purchase of the operating assets. You know, we're looking at the history of the tenant in that building. What is housed in that building? What type of equipment, machinery? Where are the customers located? Where are the vendors located? What's their proximity to, you know, to the headquarters here? The, the property and question.

25:02And, you know, all of those variables, you know, play a critical role in, you know, scoring how much rent we can actually spread across that plant because it's, you know, it's a balancing act because what we don't want to do is make a recommendation on rent that is going to choke the business because then that's a lose-lose for the landlord and the operator of that company. So, you know, we want to make sure that we find a responsible and palatable rent that is a creative enough, you know, for it to achieve the proceeds that we're looking for relative to the owner's expectations on what they think, you know, the property might be worth to make that plus two equals six. Yeah, exactly. And to sub it up early, I mean, you know, you're evaluating the credit worthiness of the tenant, right? And credit worthiness means ability to pay and free cash flow and all the above, right? And for those that are buying real estate, just like whenever you get

26:06alone, they're typically looking at, you know, how much free cash is there to pay the loan and how much buffer there is, right? That's what DSCR debt service coverage ratio. And they want to see a 1.2 on the DSCR will similarly, in the scenario you're not taking out a loan, you're paying rent, right? The lease or wants to make sure the lease can pay their rent. And if the business slows down a little bit, they still have enough buffer to pay their rent. And so you're, you know, there's only a certain amount of rent that any business can absorb, right? It's not like you can make an infinite rent. And so it's really evaluating that to get to the right amount of valuation on the real estate, you know, because it's all tied to, right? The rent is tied to the value of the real estate, which is tied to how much cash out you can take out. And so for anyone looking to do the strategy, you have to really weigh those. And that's where you pull in a Brian, right? And you work with a Brian and say, Hey, here's what it looks like. Can you please educate me on what you think rents can be achieved? And Brian, you're going to turn around and look at, okay, what's the real estate? We'll talk about the business because that's actually very much part of the equation

27:09to get to a number that makes sense. And then as a buyer, you can figure out, is this something you can economically live with, right? You're increasing rents, which increases your cost, but you're getting cash. And how do you weigh those two things? Yeah, and I'm going to add one of the other things that adds to what you're saying, Ferris is that it also doesn't count against when you go to a lender and they look at it as a lien or another covenant, right? And make kind of against debt service, but it's not, it's not going to affect your ability to borrow more money in the future. Because it doesn't have any, it doesn't have that kind of like I took a second learn to get 500 grand. Well, I sell leaseback, it just increases my rent, but I can still go get that 500,000 if I need it. Yeah, no, it's, to, like Casey, I like the, the question that you have, you know, how does this impact my relationship with the lenders and the financial ability of the operating assets? If, you know, we're not including the property is part of that collateral pool. You know, and the reason, you know, and a choir of a company may look to, to utilize the

28:14sale lease back over, you know, having that sit in the collateral pool from an SBA lender or more traditional lenders, because often, you know, the, the way a bank underwrites the value of a property, it's based on its appraised or intrinsic value. So an appraised will go out, study the sub market, assess, you know, where similar, you know, office, retail, industrial, whatever the subject category is, are trading on a price per foot in, in that sub market. And, you know, what they're not going to do is, is really study the performance of the tenant, you know, how long they've been in the building, how much rent they, they can actually support. So, you know, when a lender, you know, extends financing and has the real estate in the collateral package, it's, it's based on an appraised value and not a sale lease back value. So, you know, I would say the general experience that we've had in the

29:14market place is that there's a variance of one and a half to three X between appraised value and, and lease back value. And, you know, why the lease back investors are prepared to pay a higher price is because of the income that's being sold, you know, with the building. At the end of the day, you know, what a, what a sale lease back is, it's, it's bond it real estate. It's, it's a fixed income vehicle. It's, it's depreciable, private credit, if you will. So the, you know, relative to extending, you know, a loan to an operating company like this owning their real estate, you know, you have the ability to depreciate that asset. And, you know, you have a collateral interest in, in the building. But you are also unsecured in the operating assets. So, you know, the, the sale lease back tool really sits between senior dad and mezzanine debt.

30:19A lot of it. So what happens at the end of the lease? So we get to the end of 20 years. Do you have the option to buy it back? How does that, how does that term usually roll out? I hope the acquired that we're supporting is, it's not there in 20 years and it's someone else's problem to figure out, right? Because if they're holding this for 20 years, they didn't execute on their investment thesis. The goal is to, you know, build the business, grow that, that cash flow stream and then exit for, for more. No, but all, but all kidding aside, usually at the end of the lease term and, you know, the end of the, the base lease terms of the initial is 10 years or 15 years structurally into the lease. There's usually extension options built in in the form of like four or five year renewal options or sometimes we see three 10 year renewal options and, you know, that's unilateral in favor of the tenant. So the tenant can evaluate,

31:19hey, do, you know, I want to continue occupying this space and it's usually at a fixed rate, you know, based on the increased structure that was agreed to over the base term, you know, which can be valuable, maybe not valuable, it depends how the, the some market rent grew over the life of, of that lease. But there's usually, you know, not a structural buyback option at the end of the, the lease term because of the, some of the complications that can create with, with the, the lease accounting. Got it. I mean, last question, because that's actually something we were wondering in a cell lease back, is it hard to negotiate for the business, right? The buyer to basically say, hey, you know, at any point in time, we have the right to buy it at a, you know, five cap something expensive to where it gives the seller, you know, they're not concerned like, hey, am I undervalued my real estate? But it gives the potential next acquire the comfort or the

32:22confidence knowing, hey, I could also buy the real estate because some businesses are so deeply integral to the real estate, like you may not be able to get the environmental permissions that you got the first time around, right? Things like that. And so is there a way to structure to help mitigate that risk for the next buyer? Yeah. So I would say, you know, you certainly have to pay for that purchase optionality, like to your point, at a much more compressed cap rate than the original cell lease back investor acquired at. But having that purchase option in the lease, like I said earlier, can create, you know, accounting issues and tax issues for both the landlord and the tenant that everyone, you know, should consult a tax advisor. Yeah, but you're saying, it looks, it's becomes a finance lease. And so now it almost might not, it might have to be amortized and look differently. So now it could go against your debt covenances and all the advantages

33:24that you're getting from the lease. Yes, the goal often is to structure the leases and operating lease and by including that purchase option, there's a case to be made that it's more of a finance or capital lease. I could, you know, we could do a whole podcast segment on that and it'd probably be super boring and granular. So, you know, but general rule of thumb, like, you know, if these landlords that are providing this sale lease back capital, you know, to answer Ferris's question, like, they're because they're signing up for this long term lease, they have a vested interest in, you know, seeing the net worth of that tenant grow. So, you know, if the original acquire that business is getting ready to exit and they're going to exit to, you know, a larger, you know, let's say strategic or private equity

34:27sponsored with an existing platform in that space, you know, they're going to realize a credit enhancement and that's, you know, in the landlords best interest because if they invested at, you know, a seven and a half, eight and a half percent cap rate and then someone's going to come in and, you know, buy the real estate at a five on the then rent or assign that lease with, you know, a higher net worth lease guarantee or a tenant, that's going to improve the value of that landlord's property. Got it. All right. Oh, huge, man. This is good stuff, Brian. Yeah. Thank you for spending some time with us here. Let's jump into some of the other meat of the. I'll completely agree with you. Please back valuable piece of information, but we can hop onto our rock around where we ask our guests the same three questions. First question, what do you like to do every time? So I grew up playing hockey lacrosse and as a result of, you know, playing those sports where, you know, requires a lot of

35:29conditioning, you know, strength training and endurance training has always been a big part of my fitness routine. So I like to to compete in races. So not, you know, running marathons where you're, you're, you know, aimlessly running for 26 miles. I think that gets pretty boring, but dynamic races like I competed in a in a high rocks competition in in New York, June 24 and then 25, which is basically a thousand meter runs eight times and in between each thousand meter run, you're doing some form of a dynamic or functional exercise, skier machine, rowing machine, farmers carry walking lunges, wall ball squats. So I like, like getting out there to to compete and what was that he's called? What was it called? High rocks. It's a European space. My uncle introduced me

36:30to it at the end of 23 and, you know, I was looking for for something to do other than compete for say at least back business. He put this on my radar and, you know, Michael Soleimani and I, one of the other partners in SAP competed together in 24 and then pre-exhaver wall and I competed together in 2025. That's awesome, man. All right. Next question. What's your most memorable moment in your business journey? Most memorable moment in my business journey really goes way back to, you know, probably 2008-09. I've gotten a snowblower for Christmas from my grandfather. He, you know, really introduced me to power tools and my brother and I started this snow removal company, Hubert Snowblower. And, you know, we had a neighbor that, you know, wasn't really valuing the service

37:36that, you know, we had, you know, performed timely and, you know, thought we were overcharging. And, you know, thought, you know, do something neighborly like, you know, we're not going to pay you for this, but, you know, we had to have a hard conversation and communicate to them. No, like, this is a business for us. This is, you know, how I'm, you know, paying for gas money for, for the, you know, car that I'm going to get when I'm 17. So, you know, having that, that hard conversation and, you know, being able to professionally articulate that, hey, you know, people are giving me a commitment to basically clear the snow in their driveways. And, you know, I, I can't prioritize service to you if you're not prepared to, you know, to pay us. So, you know, my dad, at that point, you know, the thing that sticks out is, you know, don't be afraid to ask for what you're worth. Love it. Good stuff. All right. And the last question,

38:38favorite total resource. A mechanical pencil and a calendar. It's something I've done for 15 years now since I was a freshman in college at University of Delaware. I sit down every Sunday night and just roadmap my week. And, you know, that pen in, you know, pen and paper, pencil and paper, specifically pencil because, you know, writing that down creates intention and, you know, provides you with the clarity to prioritize and deprioritize the three or four activities that we're responsible for and the tasks that need to get completed on, on seven week. But, you know, things have a tendency to change all the time. So, that's why I say pencil because, you know, having that roadmap provides the visibility and clarity. But often, you know, you have to erase, re erase and move things around. But a very old-school

39:42you know, approach to organization, but it's something, you know, that's, that's works for me a long time and, you know, creates the consistency that, you know, I need to perform. That's huge, man. I'm, I'm similar, man. I got a calendar, I got a pen, I don't have a pencil, but sometimes just whatever is on the desk. But I, I too, I like to roadmap, I like to draw it out, look at it in the end of the week, man, it helps me out so much. My son, when he went to college, you know, it was the same thing I told him, I was like, you got a map, but you got to have a plan, you got to know what you're going to do every week and hopefully he's doing what he says. So, we'll see. But, Brian, man, just really, really awesome to hang out with you today and learn more about cell, at least back and about SAB. If our listeners want to get a hold of you, how's the best way to contact you? Yes. So, you know, my, my full name is actually John Brian Uber. My dad is, is also John Uber. So, my entire life, I've, I've gone by Brian just to avoid confusion around the household growing up. And, you know, that's, that can be unleaked in John

40:46Brian Uber. And, you know, you can refer to me and, and reach out to me and address me as, as Brian, my email is, is be youber at SABCAP.com. And we'll put on the show notes for the listeners. Awesome. Well, Brian, thank you very much for indicating our listeners on the cell, at least back. Yeah, thanks for the opportunity and awesome to spend some time with both of you and look forward to getting together in Chicago here in the next couple weeks. Absolutely, looking forward to it. Thanks, Brian. Thank you for listening to the MNA Launchpad podcast. If you've enjoyed today's podcast and would like to support us, please leave us a rating and a review after you listen. If you're looking for guidance on your next business acquisition or sale, capital to support your next business transaction or to invest in a private equity opportunity, visit equitylaunchpad.com to learn more and to connect with RT. If you know of an individual, you would be a great guest for the show head over to equitylaunchpad.com or slash nominate where you'll have the chance to refer yourself or someone else to be a guest on our show. I'm Casey

41:48Menchew and I look forward to talking with you next week.