178: Celeste Tanner, President and Chief Development Officer @ Confluent Development

Nothing in Celeste Tanner's background suggested a future in real estate. Before rising to President and Chief Development Officer of Confluent Development, she majored in English in college, had no ties to the industry, and was starting in an administrative role at Opus Northwest.

Her first assignment - reorganizing the paper filing system - became an unexpected introduction into CRE. By reading every document that crossed her desk, she transformed a routine task into a self-taught immersion in the workings of real estate development.

That same curiosity propelled her through a decade at Opus, where she advanced to Director of Real Estate Development and led the ground-up development of more than 5 million square feet. In 2014, she co-founded Confluent Development with her business partner, Marshall Burton.

Over the past twelve years, Confluent has delivered more than 100 projects across the United States, completing over $1 billion in development in Colorado alone and carrying nearly $500 million in committed development nationwide. The firm builds for clients like Target, FedEx, Starbucks, and Charter Communications across a portfolio spanning industrial, retail, multifamily, mixed-use, and senior living.

Celeste currently serves as Chair of NAIOP and has been recognized by the Denver Business Journal, CREW, and Bisnow for her contributions to the industry. 

Inside this week's episode:

• What Celeste has learned about trust, empowerment, and building a team
• The demand for senior living development, and how the industry is not building fast enough to meet that demand 
• How Confluent went from two people and zero capital to over 100 projects across the country
• Why Confluent bets on diversification and how cross-asset knowledge gives them an edge in new markets
• Where the development industry falls short in communicating its impact on communities, and what Celeste believes needs to change 

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Transcript

Rens Hayes IV 0:08

Hi everyone, welcome to design development, your hub to learn direct from top performance in real estate design and construction. I'm your host, Rens Hayes, co-founder of H+O structural Engineering, a lifelong learner, and I'm personally obsessed with high-powered organizations and the leaders that got them. Let's go. Thanks for joining us on design development. With me today is Celeste Tanner, president of Confluent Development. Celeste, thanks so much for joining me today.

Celeste Tanner 0:33

Oh, I'm so happy to be here, Rens. Thank you for having me.

Rens Hayes IV 0:36

Yes, your team seems so dynamic and has done such a vast amount of work in 12 years since founding. But I want to start off today's conversation. Tell us about this founder journey. Like how did Confluent come to be in 2004?

Celeste Tanner 0:50

It's interesting. I almost feel like I have to go back before 2014 to get there. So I really fell into the real estate business. It was not and was very fortunate when I did. I started in the industry at a time when you still had a lot of developers that weren't trained to be developers. Now a lot of people are going to school and they'll get their MBA and their finance degree and they'll have a specialized degree in real estate. When I was there, I was an English student, uh graduate, wandering aimlessly and happened to fall into the business. And I was surrounded by people who were history majors and others that really had a different way.

Rens Hayes IV 1:29

Oh, interesting. That's yeah.

Celeste Tanner 1:31

And this was again, these are people who've been doing it since the 80s when there was no formal training or program. For a lot of people, it was a family business, or they knew somebody who knew somebody, and they're like, oh, you'd be good at this. You should try it. And it really made me, as I was frankly looking to find a real job, realize that you can really approach the way development works and find advantage in development by thinking a different way from everybody else. And we are absolutely a team-based business, right? You know that as well as anybody. And so to have the best team that can actually approach a problem and solution in a slightly different way is what gets you better faster. And that really drove my passion. But the only way I could make that happen is because I just happened to start in the industry with the right team. And it was by pure happenstance, I started an admin role at the Opus group in their Denver office. And I today still work with people that I started with over 20 years ago in the industry.

Rens Hayes IV 2:37

Talk about the power of relationships there. So you were an English major and started as an admin in a real estate. So your job wasn't necessarily tied to development. You were like in a supporting role that then you then grew into the real estate arm of that business.

Celeste Tanner 2:50

And it was again, it was just the most incredible opportunity because Opus is a vertically integrated developer and design builder. I started on the development team in an admin role. And my first job literally was to reorganize the filing system because this is back in the day when people still had paper files. And it was perfect. Like I could, I had to understand the whole flow of development in order to organize this paperwork. And being the English student, I was the nerd who actually read everything as I was filing it. And I was able to clock down the hall, see how the business worked, understand what the process is. And again, had a team that really supported me was able to cultivate that growth at whole also.

Rens Hayes IV 3:30

That is a good takeaway for young professionals today, Celeste. Like, here you are, you're hired as an admin. Your first job is to create a filing system. Like, how easy is that to just like, all right, I'm putting papers and files and I'll just get these all in the bin and like on to the next task versus the person that's willing to put in the work to learn the business to try to create some sort of organization and thoughtfulness to the task they're doing and do it at such a high level that leads to greater opportunities. Right. There's Jim Rohn, who's like the godfather of personal development. He had a lesson that always stuck out to me. It's the better job is looking for a better you. Don't say you'll do a better job when you get a promotion or get to this level. It's no, become that person today, and then that opportunity will come to you.

Celeste Tanner 4:14

I think part of that too is just the recognition that the world isn't really about you. Every place that I am and everything I do, I was raised with the notion that you make your place. The place is already there. So you have to make your place in it. It's not them working for you. And so you have to be willing to do whatever it takes, do the work, figure out how you can add value wherever you are. And that's for the people you work with, but it is also for you and your benefit. And that's his point, right? If you can make a better you, then you're making a better organization and you're making the people around you better as well. And that's why the right team is so important. So yeah, I think it's a great lesson. I tell people all the time, don't be that person. I always use FedEx as an example, and I don't know why, but like don't be that person that's like, I'm not gonna go send the go put the FedEx label on the package and send it out. That's somebody else's job. I'm like, pick up the damn package, go send it out. Because guess what? The deal doesn't get signed if you don't do that. Like it's actually a critical job. Go do it. Add value where you can add value. And then as you see that and people recognize where your talents are, they will support you to grow. And that's exactly what happened to me. And as like I said, I was the one with a little bit of obnoxiousness for sure, also with that passion for learning. I remember barging into Marshall's office, who is my business partner now. He would just have to run the Denver office at Opus when I joined. And I'm barreling in, pointing at language and leases and saying, This basically says it's null and void. If we don't do this today, is that a thing? Am I supposed to be doing that? Is somebody doing it? What are we? What's happening here? And eventually him saying, instead of you asking me, how about you're just in charge of that? And then you know it's done, right? And you can handle that. Yeah, and that level of growth and opportunity, right?

Rens Hayes IV 6:03

I I'm even piecing together the English major, the writer being able to take up like my engineering brain, probably entering my professional career. Somebody would have handed me a lease, and my eyes would roll over in the back of my head. I'm like, I don't want to read this. And here you are picking up on the language. I love, I love that curiosity. It's something I look for in leaders, and that story just highlights your natural curiosity to go figure things out. You've mentioned team a bunch here, and just a short few minutes of us talking. And good people are hard to find, or you want to hire a players, and everybody says, everyone will nod their head, like, yes, of course. That's a great lesson. We've all learned that. I would say there's a levels to that game on where you are in your career and your business because the impact a quality person has at each stage of their career is a bigger and bigger impact to the business, isn't it? It's like that your team becomes your moat. Like you can have a go-to-market strategy, you can have good marketing brand, and even a great offer. But if you don't have a team to deliver consistently for a long period of time, it's really hard to build momentum in a business, isn't it?

Celeste Tanner 7:08

Yeah, no, for sure. And in development in particular, I think one of the things that makes Confluence special is we're a pretty lean team for the amount of work that we do. We're 28 people today. And we're specifically organized around the development process. So we know that we want the best, the brightest at each stage in development. So in-house entitlements, in-house construction management, right? In-house accounting service. Everything is there under one roof. And we all come around the table day one with the developers, the quarterback, and say, all right, what works? What doesn't work? Can we make this happen? Can we not? And because we have that skill set and alignment day one, we can take the hairier deals and make them happen when others can't. And we can also say, no, that's not gonna happen. If this group says it can't work, like we are confident, we trust this team to say that it can't work. We've pushed, we've pulled, move on. And it just makes us more efficient and better where we are. But the only way that actually works, to your point, is trust and empowerment. And that doesn't necessarily mean that you're the 30-year veteran in the business. That person has a role in the place, but it also means, like I was saying before, sometimes you just need that person that actually thinks a little differently and has a slightly more creative approach. And this is a little bit of a separate soapbox, but I would tell you like one of my dilemmas in business right now is because training for industry has gotten so formalized, I spend probably as much time untraining and retraining right graduates as I do off the street people that kind of have just the basic skills to start. And part of the challenge of that is I don't need you to look at this the same way every other real estate shop is looking at it. Like if anyone can do it, then I'm not going to beat them to it. That's not the way we work. I need to know the way that people are looking at or aren't looking at it versus the way everyone else is looking at it. And when you can find that complementary set of skills, that's when you have a real powerhouse. Okay.

Rens Hayes IV 9:13

So 12 years in, you've done over a hundred projects, over 10 million square feet. And I think you have nearly half a billion dollars in pipeline going on right now. And you mentioned a team of 28. Tell us like what market sectors are you working in? What's your geographic reach with such a lean and agile team?

Celeste Tanner 9:29

Yeah. So part of our core thesis at Confluent, and this was really from inception, we really believe in diversification. And we think that diversification leads to sustainability. So the Krana debate in real estate was are you specialists or a generalist? And the truth is we really think we can be both. So we will hire specialists in the asset classes in which we work, but we want to make sure we're relevant in all of those assets and we can weather the market and the demand in the market cycles as a result. So it with that team of 28, we're covering everything from office, which out building office now. I've done plenty in the past, but still own some office, industrial, retail, mixed use, multifamily, and senior living. And so in those buckets, senior living is about half of what we do, and the other half is the balance of those classes. We do that across about 28 states. And all of that is based out of our Denver office. The bulk of what's outside of the front range of Colorado is going to be the senior and retail. So really client-led and understanding like where's the demand for senior, where do our operating partners see opportunity, where are synergies, where do our retail clients want to be? But then continuing to have an expectation to grow that footprint for the other commercial assets as well.

Rens Hayes IV 10:43

That that's amazing to think of your work, you're you have work completed in as many states as you as you do team members. It's like hard to wrap my head around like how do you even begin to strategize on site selection, let alone what market sector you're gonna go? Like, how do you start to think about that as a team when you're looking at we're looking ahead 26 into 27? Where do we see opportunity? Are you willing to do one job in a state, or do you like to look at a general geographic, like the overall attributes of that market in the next five to 10 years? And then you start to look for different asset classes in that same geography?

Celeste Tanner 11:20

Yeah, great question. I think part of what we've really been managing through this first generation, right? So I'd say right now we we talk about being in Confluent 2.0. So our 1.0 Gen 1 has been the first 10 years or so of the company. And in doing that, I think we've really been planting the seeds for exactly that synergy you're describing, friends, where we say, hey, our first foothold in a market is going to be led by a client. And when I say client, like I said, I mean there's a retail build-a-suit client that says, Hey, I trust you guys. I want to work with you. I need to be in Washington state. And I know you guys can do this. Here's some of the markets I'm looking at. Help me go find opportunities. And then it's all about building or growing relationships we already have there. We know what their site parameters are. Let's go look for it. Similarly, on the senior side, it's our operating partners and looking with them and saying, okay, where do we feel like we have the best operating synergies with other properties that you may own or may run in that market? We like the fundamentals here. Let us go out, let us build those relationships, find the site together, and let's make sure we have the operational efficiency to work. As we're doing that, we are building the relationships with the municipality, especially on the senior front, because 10 years ago, the type of senior living we build, like zoning didn't exist in a lot of cities for what we do. And so being able to go in and really work through those processes, build those relationships, build the consultant relationships, the attorneys, the brokers, now we have an understanding and foothold in that market. And we know a little more about how it works in ticks across the board because we know this part of what makes us great in being diversified in our assets is there's a lot of synergies in the fundamentals of real estate. Right. And so if we know what the demographics are doing from and incomes are doing and household values are doing from a senior perspective and a retail perspective, we can start to predict what we need from an industrial perspective, right? We start to know where a rent versus buy threshold is for the rest of the market. And that allows us to go in more speculatively for those traditional boots on the ground kind of opportunities.

Rens Hayes IV 13:27

I like that frame. And one thing that really stands out to me there is having a bigger partnership with somebody that trusts so much in Confluent that they want them to be their development partner when they look to other regions and say, even a tier one city, or you're just another state. And then that becomes almost the seed capital for your team to become educated on that greater market to then invest behind that initial asset. Brilliant way to work.

Celeste Tanner 13:49

And that's really an outcropping. Obviously, it's tons of relationship and trust building, which we all have to do. But that was really part of what kept me excited in the industry to begin with. Like you talk about going back, and I'm the one reading and analyzing his contracts and geeking out on. But the truth of the matter is what really made me love development was I started to see the story behind what real estate can do for people and for businesses and how much we were influenced and impacted by the spaces we occupy. And at Opus, we did a ton of build-a-suit work. I was in in my 10 years or so there, that's probably the majority of what we did.

Rens Hayes IV 14:26

Build-a-suit office type work.

Celeste Tanner 14:28

Build-a-suit office, build-a-suit industrial, we did build-a-suit retail, did spec work as well, but a lot of it was client-driven and going out and competing and winning jobs for these clients. And these are moments where we'll go build a hundred buildings over the course of a decade or so. But for a lot of these clients, it's the only time in their career that they're ever going to be responsible for this kind of process. And so to be able to share with them, why even do it? What right? Like I can and I can be able to show you and say, hey, office user, I this space will help you recruit and retain employees. You'll be able to get better talent and you'll be able to rent turnover costs by doing that. And that's going to save a ton in your bottom line. Hey, industrial user, right? If you move out of that 30-year-old space with terrible column spacing, you can have 40% increased output and less space occupied, right? And drive value to your business. That does help tell that story for you.

Rens Hayes IV 15:31

And are you guys bringing that data or do you have an exploratory process to learn about their existing space and like the constraints it's putting on their business? Like you're having a collaborative conversation there?

Celeste Tanner 15:42

Yeah, absolutely both, right? And so we'll take our experience and our history, what we've seen, and what other team members, consultants, and others have been able to help quantify as well. But then we're not just throwing numbers at people because that doesn't mean it's necessarily relevant to what they're doing, right? And if they're at this stage where they want to talk to a development partner, then they know that there's some need or gap, but they may not necessarily know exactly what it is, right?

Rens Hayes IV 16:09

I think the other cool thing about these businesses is their decision on whether to become a tenant or to own link outright. That's a big decision for a company. And sometimes it's a matter of cost of capital or where what they anticipate for growth and what they need that capital for. So sometimes like it's not a one size fits all decision.

Celeste Tanner 16:28

Oh, absolutely. And we we're agnostic. I'll build for fees or I'll build for lease. And we can help share in both. And to your point, and especially now, like with some of the tax legislation that's passed and some of the accelerated depreciation that's there and how that applies in lease space versus own space for certain users. These are getting to be more and more financially complex decisions. So, like we we try to work. Obviously, we're not the accountants, we're not the tax people, but we try and help walk them through advantages and disadvantages. Or, hey, we can maybe we can structure a lease this way, right? And you can fund on these improvements, and that may be a better economic benefit. Like it's a comprehensive picture to help them through the process.

Rens Hayes IV 17:09

That conversation hits a nail on the head for me. I know my family business was structural steel and missiron. So we ran a manufacturing facility and we made a big investment in like redoing our entire infrastructure from like when a piece of steel got brought into our shop and how it went through the entire facility to where it went back on a truck to go to the job site. And from industry data and our own data, we found that like almost 60% of cost was material handling, right? Like pieces of steel are big heavy. You're using cranes, you're using forklifts, you're doing all these things. And it's like by streamlining and getting roller conveyors and automated like lift and carry like horses, like it allowed us to only pick up the steel off the piece off the truck. And then we only had to pick it up to put it back on the other truck. And it was like it eliminated and streamlined the entire process and reduced cost significant. So it's you can see how a facility has that same effect on a much bigger scale.

Celeste Tanner 18:02

And so going through that conversation, it's amazing because it doesn't sound super sexy. Like everyone can go in and say, okay, I understand how an apartment building or a condo building, right? I understand how that space can impact people. And we all know if you have to sit in a dark box versus daylight, like that has an effect. But when you're a business and you're running and every penny counts, that that's also pennies that are passed on to consumers every day. That's how cost gets saved along the way. Those fundamentals really matter. And like you said, you saw it in your family's business. An extra 10 feet of column spacing with more efficient racking, an extra five feet of clear height, a little deeper speed bay, all those things translate into actual time and dollars for people. And I having an appreciation of how like the vertical components of once that steel is erected, how it actually impacts how that steel gets processed and distributed, that's a pretty interesting place to be. That's a really cool synergy to think about.

Rens Hayes IV 19:01

Absolutely. You mentioned gen one of Confluent. How did maybe your focus and your development strategy and those that first generation of Confluent translate to today? Did you do different scale of projects, different product type, different volume? How did you kind of transition from one to the other?

Celeste Tanner 19:19

It's really interesting because I think we're in this assessment right now, right? So a big part of my day is us going through our strategic planning and what is our visioning for the future. And I have to tell you, there's a lot of great opportunities that have happened with Confluent in our timing. We started in 2014 when Denver in particular was having kind of its breakout moment as a market. I it was ZERP era, right? So money was flowing. We started the company with zero capital, right? Like we didn't have an anchor capital source or anything that would not happen today, right?

Rens Hayes IV 19:54

Um that would be very hard to bear.

Celeste Tanner 19:56

Yeah. And so like we we had all those opportunities, but frankly, what I've been most excited about, if you reflect on the last 10 years, as crazy as this sounds, is I truly believe we experienced a once in a hundred year at minimum market event, right? In in that window, think about it. You had ZERP era rolling into a global coming out on massive inflation, right?

Rens Hayes IV 20:21

Printing of money, historic low interest rates. Yeah.

Celeste Tanner 20:25

Yeah. And so you had this huge run of inflation that was once in a 50-year cycle that led to the fastest acceleration in interest rates ever. And we had to experience all of that in one window as a business that is highly impacted by every one of those factors, right? And so to take those lessons and say, we we weathered the once in a century challenge, like we should be able to create once in a century opportunity as a result of that. And so being able to take our fundamentals and core, which includes what we think we've done very well, which is we really have doubled down and believe in our diversification strategy. We actually, over time, as an example, I mean, we literally do everything from a single Starbucks to a $250 million mixed-use project. We started to stray away from those smaller projects just because we're a lane team and they're inefficient and tough from a human capital perspective.

Rens Hayes IV 21:22

I'm glad you mentioned human capital. You're exactly right. Like the small project takes just as much human capital that might be required for a significantly larger development.

Celeste Tanner 21:31

Exactly. But when we did that, we found that we were at like when we strayed away from there, we found out we were missing a couple of key components that kept our business sustainable and on a path for growth. And one of them was what you talked about before. Like those were some of our clients that were bringing us into potential markets, and we were moving away from that. So it was an investment for the future that we were moving away from. It also is a great balance in the sustainability of the company because those small build a suits. Some of these projects we talk about, they're five, seven, 10-year horizon deals, right? And you're earning fees along the way, but that's really it. And then you're sitting and waiting to stabilize and add value on the back end. These smaller deals cycle in a year to 15 months, right? And you can do them on balance sheet, right? And just keep that cash flow going. So even when we started to move away from some of these segments, we've decided they're actually a core principle of who we are and the market demands them. So let's continue to invest in that. So I think we'll keep those components and stay strong. But I do think we've recognized a lot of discipline in the way we operate and underwrite our deals, a lot of learning for me, right? Because I got hired out of the tech wreck, learned through the run-up to the GFC, litched through the GFC, then got into Zerb error, right? And so I had a cycle through me that I could learn from. But a lot of the people that had worked that work for me had never experienced anything but zero interest rate, free money, ultra low cap rate.

Rens Hayes IV 23:01

It's a nice life. Yeah.

Celeste Tanner 23:02

Yeah, no, really. It's so who isn't a developer? But being able to understand it and learn to manage and tell people I never want to see a three and a half cap exit on a multifamily project ever again, ever. And that's a good thing.

Rens Hayes IV 23:18

That might indicate there's a cliff that we're running into when we see that. Exactly. I like how you pivoted that conversation on human capital because those smaller deals do require a significant amount of human capital relative to the leverage you might be able to create elsewhere. But when there's other value-aligned interests or other benefits, I I also think about developing team members and getting more at bats, you can do a higher volume. So if you structure structure your team, you can actually do a higher volume of those deals and get people more experience and more volume. And like you said, if it's on a different cash flow cycle, it has it's a risk-adjusted return investment for the business too, because you have maybe not as bigger upside, but you have more consistent cash flow that de-risks the whole business model.

Celeste Tanner 24:00

And I'm so glad you pointed that out because just like we were talking about before, being able to take really talented people and train them within the way we think about real estate in business, right? Which isn't the only way, right? But it's our way. So we want to make sure we're aligned in that. Those are the perfect deals to make that happen. These are not one-off tenants, these are highly sophisticated investment grade retail operators. Negotiating with them, understanding their parameters, managing that, that's a huge experience lift. And being able to do that at a scale on a fast pace, understand how to manage the client relationship, drive-through entitlements are as challenging as anything in most markets. And so being able to understand and establish the relationships with the cities to do that, that's an incredible proving ground for people to be able to build experience and growth and then expand that to larger opportunities.

Rens Hayes IV 24:53

I don't know if this is the right way to say it, but I feel like you're unapologetically yourself and you're almost willing to be that in your own business. And you even started this conversation by saying the opportunity is being willing to think differently and do things differently than everybody else. And here you are. It's re-resurfacing throughout the conversation.

Celeste Tanner 25:12

I love the I don't know how to be anybody else. Yeah, I'm terrible at poker. I'm no good at anything. I just feel like I have to be me. And I hopefully that means people know what they're walking into. And look, I'm not for everybody. But I promise you what you get when you work with us. And that's actually a huge tenet of who we are is there's all the fundamentals and there's all the data and there's everything else. But the fact of the matter is this business is really hard. And again, for people that it's not their day job and they have to deal with it, you really want someone that you're going to enjoy working with because it's going to be difficult and challenging and things are going to go wrong. You need a partner you can trust and that you actually want to sit in the room with, even if it's a challenging conversation. And so you need to have that relationship up front. And I think when people are open and transparent, that that's when that trust gets built really quickly.

Rens Hayes IV 26:08

So I could, I couldn't agree more. And this reminds me of kind of a perspective on life that I think is important to revisit. It's like life isn't just going to be like all rainbows, right? You're going to have friction, you're going to face challenges, you're going to fail, you're going to have some wins along the way. And then it's like the person that you're becoming on that journey. But then two is like who you're on that journey with. Because at the end of the day, if you're surrounded by the people that you love and enjoy being with and you have that level of trust and collaboration with them, like whatever problem you're facing, you're still with those people. So it's we can accomplish anything. And like the team is the value of the team at that camaraderie.

Celeste Tanner 26:44

Will not achieve your potential, and that team will not achieve its potential. Like, we're not an industry that supports dead weight. And in doing that, and I don't even mean that in a negative sense, I just mean that there's a misaligned collaboration that's there. And so I will never forget, I was speaking at a crew conference conference in like 2008, 2009. And they were asking, like, how do you choose your career path and what do you do? And everyone's just grateful to have a job at that point in the GOC. And I'm standing on a stage and telling them, you need to really look and evaluate. And if you're not with the right team, you need to lead today. Yeah. Yeah. Because, like I said, it's not even about you, it's about the whole team. Like you're not the right fit for them and they're not the right fit for you. Both of those need to change. Because if you're doing that when the market's bad, you will not succeed when the market is at its best because you haven't transitioned to where you can thrive and the company thrives with you. So you have to, that's those courageous moments that you have to take and they're scary, but it is that investment in yourself and knowing who you are, like you said before. And by doing that, you have such a better likelihood for success than if you just stay and plug along with the wrong route.

Rens Hayes IV 27:56

Great advice, Celeste. And when I look at an individual that maybe is in that team, it's like making sure you take the time to reflect on what's important to you and your life and your career and make sure you have alignment there. Because if you're sitting in a team that you don't enjoy in a company where you're not sure where you're upside or you don't know where the company's going, like how in the world are you ever going to start to piece together your career journey? It's like you want to make sure you're in a space where you can have those combinations. And obviously, coming from a place of fear and scarcity and fear of not having a job is a tough place to be. But then it's challenge your day-to-day behaviors. Are you researching companies every day? Are you calling companies every day? Are you sending resumes to companies every day? Don't talk to four companies. Dig in and go put the effort and find there's a team out there that would love to have you.

Celeste Tanner 28:41

Oh, a hundred percent. Yeah. And I'm so glad you raised it, but that's actually probably there aren't that many things in life that actually really annoy me and get under my skin. But the one that really does, and I have to challenge myself every day on is fear-based decision making, right? Nothing good comes out of fear-based decision making. So to your point, like the more you can do to manage and mitigate that, the better you are. Like when we were starting Confluent, one advice I always give to people is if you want to go do something that is new and different and then on your own, go talk to people that have done it before. There's a lot of intelligence, there's a lot of reading out there, but it's the on-the-ground advisory that is really going to benefit you in that. And I remember sitting back and thinking, okay, we're going to leave Opus, who's been great. They were an incredible proving ground and they were a wonderful company to work with. We're going to go start this new business. We have nothing. Like I said, we had no capital back. We just had a reputation and an idea. And is that really smart? I have a family. How am I going to feed them? What am I going to do? And I had a buddy that was in the design business and he had done a similar move a couple of years before. I remember sitting with him and I'm rambling on why I am with you now. And there's just all these challenges. And I don't know if we can make it work. And what are we going to do? And he's like, look, I was where you were, right? But I know you guys. I know you. I know Marshall. I you can agonize and debate, and maybe you're going to drink a little too much and cry a little, and then you're going to get to the end of it and you're going to make the decision. And then you're just going to go succeed because you guys don't really know how to do it any other way. You can't not make it happen. So you can do that whole middle card, or you can just skip to the end and go. And I think it was so funny. I'll never forget. I'm sitting there, I'm like, oh yeah, good point. We should just skip to the end and go.

Rens Hayes IV 30:33

Rather than debate this for the next couple of months, we're just going to go and figure it out.

Celeste Tanner 30:37

Yeah. Yeah. Why be afraid of it? It's what is not in my control is not in my control. And as developers, we know this. Like I said, we just live through this unbelievable market cycle that was not in our control. But we can manage what we need and still find out.

Rens Hayes IV 30:52

Quick break from the show. Thanks for tuning in to design development. We're trying to help as many people as possible. So if you could subscribe and leave a review on today's episode on whatever platform you're listening, it would be a great help. It's the only way we're going to reach more people. Let's get back to the show. What was your first big win once you guys launched?

Celeste Tanner 31:13

We had a seed project that we started the company with. And that was a speculative office building, believe it or not, on the other end of downstream. Yeah, exactly. That pairing really doesn't happen much anymore. But I always tell people it was the first spec office building in a hundred years on that street. And it ends up it's on Platte Street for people familiar with Denver. And that is now one of the most bustling and thriving streets, corridors in the city, just kind of landing pad everywhere. So that really helped us get going. But from there, we actually had a build-a-suit industrial deal that came out to market and was highly competed. And we were just this little startup shop. They're an international manufacturer and wanted to relocate out of another building. And in this RFP process, there were other more established landowners with development partners that were competing for this job. It wasn't huge, it was an exciting opportunity. It was a high credit tenant. And we ended up winning that bid. And we did it because we listened to the client and we were nimble enough to adapt. And just like you were saying before, they were weighing, should we lease? Should we own? What should we do? And he said, we'll do what's best for you. Let's walk through it. And funny enough, that won the deal. I know it's shocking to think about, right?

Rens Hayes IV 32:40

You listen, you actually help them through the process and help them make better decisions and they want to partner with you.

Celeste Tanner 32:44

Yeah, it's strange. But yeah, so like winning that was actually the little bit of coup moment, right? That happened because everybody turned and looked all of a sudden and said, Wait, how did you do that? Wait, who were who were they? Who did we lose to? Yeah, exactly. Um, but even that win led to more relationships. And so, like in that win, one of the landowners who had family land and had a business park established there, he was shocked that they didn't get that job, that opportunity in his property. And so he went to the brokers and was like, I need to go meet these people that beat us out of this. And that ended up forming a partnership on the remaining 70 acres that he had and incredible partner, just awesome guy. And we ended up doing five years worth of projects there and ended up selling three or four buildings, Dem Vesco, doing a build-a-suite for FedEx, just incredible opportunity, but all came from that one first seed.

Rens Hayes IV 33:39

Isn't that amazing? What a great journey that is, and couldn't have happened to better people. Did I see is this anything to do with MVG development? Is this like the was there a merger there that I learned about in the process?

Celeste Tanner 33:51

Yeah, yeah. So Marshall and I started Confluent, just the two of us, right? And we had this succession of early wins, and we're really fortunate with that. And that was like the office building. I talked about this industrial building. We had another office building, a few hundred thousand square feet that we were gonna win.

Rens Hayes IV 34:09

You two are very busy here in year one. Yeah. Really taking action.

Celeste Tanner 34:14

Yeah. And so you have a few hundred million dollars of work and still the two of you. And okay, so how do we actually go perform for a client?

Rens Hayes IV 34:22

How do we how do we recruit and hire? Like where we go.

Celeste Tanner 34:25

Exactly. And as you know this, right? So now you're in the chronic founders debate of I can take proceeds and reinvest in the company, right? And basically not make any money for years and wait for an event and really push hard and struggle. Or what is my plan B? What can I do? And as we're looking at how we're going to reinvest and make that work and what we need for it, we were actually approached by a longtime mentor and former business partner of ours. And he was on the board of a company called MVG. And it, we were just the perfect kind of Lego combination where MVG was a exclusively at the time build-a-suit retail developer. They'd been around for 10 or 15 years based in Denver, but nobody knew who they were because they were doing all this work out of state. We did retail, but nothing like that, right? We weren't going out and doing 20 Chipotle's or $30 generals or 10 Walmarts. Like that, that wasn't our program. But we were doing all of the other asset classes. And then MVG was just, they had one senior living relationship and they were thinking maybe this is the business we want. They had a team of about 15, 20 people. They had their in-house accounting services and legal and everything else. We obviously had none of that. Most importantly, they had an anchor capital source. There's a high net worth family that had been invested in the company from the very, very beginning and was just incredible family capital, really looking for vision for the organization. And he saw an opportunity and said, You guys need bend strength and resources. They need vision and diversity and growth. Wait, we think this could be a really great partnership. And it actually worked out wonderfully and was really the launching pad for our growth.

Rens Hayes IV 36:15

This is unbelievable. So we're gonna take the founder leap, skip to the end and not dwell and just go for it. Stack up these developments and do a merger all in one year.

Celeste Tanner 36:25

Uh yeah, call it 18 months, yeah.

Rens Hayes IV 36:27

18 months. All right, yeah. Never mind. Yeah, that is incredible. It's like even considering I've been really a student of business for, I don't know, 12, 15 years. And to think about what it takes to actually have a successful merger and to think that you like got thrown into that type of business environment in your first year, it's like, hey, congrats. You're you've become great at real estate development. Now you're a business, you have to run a business and go through a merger. There's so much to learn.

Celeste Tanner 36:55

It's that thirst for knowledge, though, right?

Rens Hayes IV 36:57

Thirst for knowledge, yes. What like what resources do you turn to continue growing like your business and your leadership accuracy?

Celeste Tanner 37:05

Again, I'm I'm so fortunate because I have this incredible network of people, right? And so I really look to my peers, my seniors, right? Sometimes even the people that are coming up in the industry, because again, they think about it a little differently. I want advice and counsel from everybody, and I believe in the wisdom of the masses. So I really do tap into that network and resources. It's funny, I always tell people it it's one of those ironies in life where I was a literature student. I love to read, I love gaining knowledge through reading, but I've never really found that I gained as much value in reading business books and management style books as I did from just hearing the stories of people who lived them and frankly the mistakes they made and work, do my damnedest, frankly, to not make those same mistakes. Yeah, try and still do a few of them. Yeah. Yes, still do it because I'm human. Uh, but at least have some eyes wide open going and trying to best practices.

Rens Hayes IV 38:05

Celeste, that's honestly that's like at the core of why we run design development. Like, I've learned so much from the conversations I've had with people that are have already walked the path that I'm trying to walk. Like, how did you like whatever part of business or industry that I'm so curious? And this is our way of taking those and sharing those conversations with the entire industry. And our hope is that people see a parallel and are see the gain of perspective to maybe take that next leap.

Celeste Tanner 38:32

Yeah, for sure. And I love that you do it because I think I had an old family friend, and and this is where I say I believe in the wisdom of the masses, because he he's not a super educated guy. He's not that he has nothing to do with this business, he has nothing to do with business at all, but he's a thinker. And I remember us talking about giving and giving back and charitable work and what we do and how we invest our money. And he's just like, money. He's money is nothing. The most valuable thing you can ever give is time. That is the greatest charity that there is. Your time is the most precious thing there is, it's the most limited thing there is. Take the time and see what happens in the results. And just investing the time that you do and having these conversations and people investing the time and listening to them. There's one nugget or pearl that may come out of that and it will reshape everything they do. And all of us doing that collectively is what will change the world. It's not gonna be the one big fat check. It's not gonna all those things help. And they're all great. I'm not dismissing them, but it's that collective investment of time that we all put into our lives, our business, and what we do and how we choose it and learn from it that's gonna make things actually work better in the world.

Rens Hayes IV 39:40

Yeah, I love that frame. And it's like how if every one of us is able to share that one nugget that changes somebody else's life, that's how you that's how you change the portfolio. Talk to me about the collaboration you have with your co-founder, Marshall.

Celeste Tanner 39:53

Oh, yeah. Marshall and I, like I said, we've my career story is actually so simple because I started working with Marshall and I still work with Marshall. And I always say, as long as he'll put up with me, I'll just keep working with Marshall's. Um, yeah, we we found pretty early that we have a very complimentary skill set and a really solid working relationship. And I'd probably frame that a little differently than most people do. To me, complimentary means that we don't have opposite strengths. Complimentary means more we have a very strongly aligned end vision and goal of how we think business should work and how development should work. Yeah. And then from there, we tag team and partner. And there are areas where he may think or approach things a little differently than I do. And in those two, we find value in both. And so we find a better result. But it's not like he's the finance guy, I'm the marketing person. It's not a relationship like, and because of that, we're able to think and challenge and build, I think, in a different way. And to me, that's actually what that complimentary skill set needs. And we just we've been able to manage and have that, and we're always filling in gaps where we need them. And that's been just a huge benefit. I am so grateful to him forever because, like outside of my husband and his support of me, like Marshall's been the one that has been there in my career that has said, I trust in you, I believe in you, I know that you can do this. I'm gonna go give you the foundation to run. And then I know we're both gonna be successful. So let's go do it together. And that's an incredible empowerment. Yeah.

Rens Hayes IV 41:27

That is so empowering. And how you describe like that kind of shared strength and really alignment in what you're doing. I think having trust in a partner, there's I think friction, and one of the worst things you can have in a partnership is assuming negative intent. You're gonna run through challenges, you're gonna have hurdles and obstacles, you're gonna have failures together. And if all of a sudden you look to your partner and you're assuming negative intent, like they did something wrong to negatively impact you, like that's a recipe for a disaster. But if you have shared values and shared aligned interests in the long term, it helps you avoid those types of letting that type of friction become a downward spiral in the partnership.

Celeste Tanner 42:06

Oh, for sure. And again, that that's what translate translates to the whole business. So it's not just our partnership, but our partnership with the entire team. And that's why we continue to run as lean as we do. I think we found as the business cycle ebbed and flowed, we grew our team and then we right-sized the team again. And part of that was just the level of business we were doing as the market was down. But frankly, a bigger part of it was we can do more better with a core team that has that same compliment and that same trust, that same empowerment. More gets done with that than if you just double the team and expect people to go work. Those are two totally different platforms and focus areas. And if we, and again, that structure is not for everybody, but when you find team members that say, wait, so we're gonna align on a framework and a goal, and then you're just gonna let me run. Like you trust me to just go do that. I'm like, Yeah, I trust you. We know what we're doing, right? Let's work on it together. And yeah, I trust you, go run. There are people that just thrive in that platform and love it. And those are the people we're looking for, right?

Rens Hayes IV 43:11

Absolutely. I like how you said it's not just a partnership between us, it's a partnership with the team. And I'll flip that conversation because I I think it's easy when you're an employee in a company and you're thinking that your value to the marketplace and your capacity is more than what you're getting. It's like if you're looking towards the top of your organization and you think there's friction at the partnership level, that could be the constraint of the business. Like for a business to be humming and creating opportunity and growing, like you really need partnerships at the top that are on the same page. So it's a really good thing to look for that alignment.

Celeste Tanner 43:43

Uh yeah, I totally agree. I don't know how a business can truly succeed otherwise. Like you can get by, but it's gonna be pretty miserable for everybody.

Rens Hayes IV 43:51

You've described Denver as one of the most collaborative markets in the industry. What do you mean by that?

Celeste Tanner 43:57

Yeah, you're probably gonna start picking up on this theme if you haven't already. Freddie Rinsley. I don't know that my career would exist if it wasn't for the people I'm around, even the capital partner that we have. Like they're incredible and trusting and collaborative. And the fact that all this happened in Denver, I joke with people all the time, but if I had fallen into this business in New York, I probably would have been fired with memory, right?

Rens Hayes IV 44:19

Fired. Yeah.

Celeste Tanner 44:21

But Denver is one of those markets that has always punched above its weight, even before we saw the run-up in population growth and business growth and loss cycle. You had an outsized presence of development contractor, investor talent that was in Denver. And there's not, frankly, it's not a huge market. It's a top 20 city, but it's not, it is not a first-tier market. And so by nature, we all have figured out that to keep our city growing and thriving and successful, we all need to be friendly competitors. And I joined, I had Marshall's advice early on in my career, I joined NAO that I chair nationally this year. And part of the goal of joining that was to really make sure that I'm understanding and building those relationships and that I am working with competitive partners in what we do, right? And everyone here just wants everyone to succeed because we want the community to succeed. And while I don't think that's unique across markets, and the more exposure I've gained over the years in markets, I do see synergies in that. I think to be able to come to a market as a transient and be able to quickly establish a footing and have people that are willing to invest in your success as well. Denver was just a wonderful proving ground for that. And I've always been eternally grateful and always tell people like that's the type of environment you want to be in. Nothing cutthroat, but a place where it was like, we're actually in this to make the city better, to make the state better. It's not just to make our one company better. Everyone will thrive if this area can thrive. So let's go solve that problem together.

Rens Hayes IV 45:57

That's an abundance mindset if I've ever, if I've ever seen. And if you've read Simon Cynic or familiar, it's like the life's an infinite game. But we grow up in school and in sports where everything we do is playing a finite game. You graduate with this grade, you get this on the test. There's a game where there's a winner and a loser in a set. Life, business, building none of that is on a fixed timeline. It's like a for it's an infinite game that never ends. And you got to make this, there doesn't have to be a loser for you. So, like when I think about making decisions, I want to be successful because I help everybody around me succeed, not in spite of their success.

Celeste Tanner 46:32

And I think this is part of the misconception that we have with the real estate industry, the commercial estate industry in particular, and the community at large, because I think there's this kind of marketing problem, brand problem that we have in development. And the truth of the matter is like most of us live or our partners live in the communities in which we develop. That's why we're there because we know it and we know and we want it to grow and we depend on it growing. But we have to actually believe not in the one-year future, the two, we have to predict the five-year future, the 10-year future, the 20-year, and try and be a positive influencer on that. So our community impact has to be profound and tangible. And that only works in support, not in opposition to what cities are trying to achieve. For most elected officials and for most like day-to-day citizens, like this is not their core business. It touches them every day, but it's never been communicated to them.

Rens Hayes IV 47:28

They don't recognize the impact.

Celeste Tanner 47:29

Neither did I before I fell in this business, right? How would you? Like it's actually one of those beautiful ironies of life of like the most tangible thing is the one that we have the least concept about, right?

Rens Hayes IV 47:42

I never thought of it that way, but you're right. It's like the most tangible thing. We all live, work, and connect with the people we care about in commercial real estate or some sort.

Celeste Tanner 47:52

And as I say it somewhat jokingly, but as we talk about the perception of our industry, I always tell people, like, I don't think people understand how much developers like actually tangibly contribute to these communities and what we do. And so, hey, did you enjoy meeting at that coffee shop this morning? You should hug a developer. Did you come on the sidewalk to get down there?

Rens Hayes IV 48:13

Hug a developer today.

Celeste Tanner 48:16

Yeah. And wherever that park is, wherever the sidewalk was, if your water was clean and running, more than likely a developer helped make that happen. So and so being able to understand that and communicate about, I think if we could frame that message, maybe your new brand director will be able to do this. Uh but we can, yeah.

Rens Hayes IV 48:34

We'll bring the director of brand, get them on that, hug a developer today. That is gonna be our campaign. That is too good. I had this, I've been having conversations around this topic quite a bit, and I heard it framed so well, and I forget who said it, it was through like a reel or something, but it was like the root cause to a lot of like the misconception, or even like in the political friction or something where it's community against developer. To me, the root of all that is the lack of financial literacy in like society and teaching, like it should be something that's so core to our education system to make sure people understand how inflation and economics and how money flows through the entire society, right? Because it's like at that root cause, if they did understand that, they would understand cause and effect. But it's really hard to have those conversations around the macroeconomic impacts without understanding financial literacy first.

Celeste Tanner 49:30

I mean, that that's a core issue that extends far beyond real estate, right? I mean, I think that financial, yeah, that financial literacy would go a very long way. It's one of the great tragedies of education in America, in my opinion. The civics and finance and basic economics got left out of curriculum. But I totally agree. The baseline example that I try to communicate often is when we talk about building apartment buildings, right? Developers only make things more expensive. Developers only they're only there because they can gouge people for money and make more money.

Rens Hayes IV 50:01

The big bad wolf. Yeah.

Celeste Tanner 50:03

Yeah. And I'm like, first, developers don't have any money. So I remember that. It's not our money. But even if we get past that, when you start mandating affordability in multifamily properties, for example, forcing something to be at 60% of AMI just means that what was 80% now is going to have to be 100%. The unit next door now has to get more expensive. And that's not because the developer is trying to make more money, it's because the building won't get built. And so being able to communicate to people, well, I know I appreciate that you're looking out for the person whose income won't support the 80%. But make sure you're also understanding that when this is 100% and this is more expensive, that's a direct consequence. Like it money doesn't evaporate, it just moves. And you've got to make sure that you can comprehend that and get it. And that's a hard concept for people to understand if they haven't really been taught, you know, how to frame how economics works, how investment works, how those returns work. And it I get that you take emotion and have to tie it to numbers and data, but that's our job. That frankly is half of what I do every day is trying to balance emotion with facts and give respect to both.

Rens Hayes IV 51:22

How we're tackling that at HL. This once I saw the world of open book financial management, I couldn't unsee it. And I think it's actually like amazing to think that here we are in 2026 in the United States. And it's still common for people to work at companies with no insight into the financial stability of the and it's hard for if I put that in another way, imagine investing in a public company, buying a stock if you had no visibility into their financial or buying a real estate development with no insight into the pro forma or the investment debt. It's like you would never do that. But people commit every hour of their career to a company with no insight into the financial. So they're committing all of the time, which we've established is more valuable than money, your our most precious resource, with no understanding of the financial impact of what they're doing day to day. And once I like saw that, I like couldn't not, I couldn't unsee it. And so a big part of what we're doing is we try to we train everybody in financial literacy and we open book financial management so they get a they can see the scoreboard and the value we can create in them.

Celeste Tanner 52:22

That that is still incredible. It's such a smart move and completely agree. I think you frame that really well. But again, it's a buy-in and empowerment, right? Like you want to do that. Yeah.

Rens Hayes IV 52:35

Yeah, that's a grammar. You're talking about the emotions, right? I and I share that in a sense that like when I connect that to like political decisions or affordability, it's of course we all want more affordable housing. But if you disconnect and you don't have an understanding of the financial scoreboard, you can say, Yeah, we'll just require more affordability. It's like you do that now, the financial scoreboard doesn't work. You can't raise investment capital and we just choke supply. So it's supply goes down, demand goes up, like we're creating a long-term issue here. So it's like there's no silver bullet, but it's definitely a balance. And I think financial literacy, investing in that like broader education is like at the epicenter of solving so many problems.

Celeste Tanner 53:15

And to your point, I the literacy of it and also communicating when the thesis proves out. So, like by way of example, we talk since we're talking about affordable housing, what have developers been saying forever? Let us build and housing will become more affordable. Now, much to the chagrin of developers, right? If we're being honest, we're seeing that in multiple markets, including Denver right now, where we've had a historic run-up in supply on multifamily housing. And guess what happened? There's so only so many tenants, tons of units available, and rents started dropping, concessions started going up, and we have this naturally occurring affordability happening in the market. And the only people saying it are the developers going, man, there's naturally occurring affordability going on in this market. My deals were not canceling the way I originally bought. But from a city perspective, that's a really positive thing. And the economic foundation played out. And my hope and goal is that the cities around us in Denver, states that look to Denver, will say, Oh, that actually works. As the market rebalances, let's remember that. Let's remember that making sure we're encouraging proper supply will help promote affordability and we don't have to mandate it. We need to teach both sides of that.

Rens Hayes IV 54:35

You purchased or you had a merger with MVG in your first 18 months of Confluent. They had one senior housing development. When I look at your senior housing portfolio today, it's pretty significant. Talk to me about the growing focus on senior living.

Celeste Tanner 54:50

Oh, yeah. Again, senior is the supply-demand equation. If you want to talk about data, there is no more fundamental data than the fact that we are all getting older every day. And we have a baby boomer generation that is frankly just getting to the age where they would start to look for senior housing. And we have no supply of senior housing. COVID literally just shut the doors on that industry. It's considered an alternative for real estate. It's gaining momentum outside of that, but not an area of investment where a lot of institutional capital was focused on development for a while. But yet, yeah, this was one where you had development capital come in, COVID came, senior living got really hammered from a PR perspective during COVID.

Rens Hayes IV 55:39

It was a huge risk to be in that type of facility because it can't. These are all things that choke supply.

Celeste Tanner 55:56

Exactly. So supply falls through the floor, but at the same time, what keeps happening? Everybody keeps getting older. So the demographic target has just continued to grow in that. And I think it is by 2030, there will be more people in the United States that are over 65 than are under 18. And that is the first time that will happen in the country's history.

Rens Hayes IV 56:18

Unbelievable. I hadn't heard that.

Celeste Tanner 56:20

Yeah. And so when you start looking at that data, and we all know people have been living longer, right? We know that as people live longer, they have different needs. Frankly, what COVID actually taught us, and we saw this as we moved out of the pandemic, is that the largest health impact that a senior can have, that's not a true medical issue. It is a social impact, right? When you're a senior and you're isolated, like you may have a desire to stay in your own home, but if no one is there with you and you're not actually engaging with others, that will have as much negative consequence on your lifespan as any other general health issue.

Rens Hayes IV 56:58

I couldn't agree more. It's like we're almost driven to think that's success, but in reality, you're really just choosing isolation, which is a detriment to your health long term.

Celeste Tanner 57:08

Yeah, exactly. And so find generating communities that actually promote, we call it whole health. So it's not just an assisted living or memory care that there's medical and health support there and there's people monitoring, but it's the fact that you're curated in your activities and programming and you're engaging with your peers every day in another way and creating stimulation and joy in your life that you wouldn't otherwise. That is what actually promotes a long-term healthy environment. And that's what these senior committees do. So the demand for that is there today, but inevitably increasing. And the math of that is just absolutely fundamental. So we've been big believers in that space and continue to grow in it.

Rens Hayes IV 57:50

The stat that I've learned in senior living is the number of the demand for senior living will double from 2025 to 2030, like the total available senior housing in the country. So it's like a demand that we are incapable of meeting over the next few years.

Celeste Tanner 58:05

Yeah. 10 years ago, the stat was if there was a 1% increase in demand, that would absorb all the available units in senior living.

Rens Hayes IV 58:14

Yeah, 1%.

Celeste Tanner 58:16

Yeah, 1%, right? And you're talking about double. And so now, again, not all of those people are gonna go access in your living, but but clearly there's an equation there that makes sense. And we are big investors in that space. The other component of that is pretty interesting. We talk about meeting consumers and in how the spaces we are impact the way people live. We also have to accept that while there is senior supply on the market, there's a new generation of senior that's coming to these spaces. And so what we've really been fortunate to do is be active in this very specialized pipeline for the last 12 years or so. And we see now as the first baby boomers have been coming into senior living, they have different wants and needs in that space than the generation prior. And so, like, we need to start and are already designing and building that space in a way that is really fitting for the senior of tomorrow, which is now the senior of today. A really simple example of that is in assisted living communities, for example, you don't normally have a full kitchen because you have an incredible, like true gourmet chef, three meals a day. And it's part of the community engagement that you have a meal plan with you and you can eat with them. I've literally had residents that have followed the chef as they've moved from one community to follow the chef. Oh, yeah, yeah. I mean, look, if I could live there, I'd follow the chef. It's amazing. And so it's there and important. But now, as you have baby boomers come in, and if it's a woman in particular in a tour in the space, she'll say, Where's my stove? And we're like, Oh, you don't need a stove because you have a kitchen that's there, there's all the meal service you need. Why would you bother cooking? She's like, What if I entertain people? Like, we have a whole lounge and if we have all these spaces. No, I'm not going anywhere that doesn't have a kitchen because I may want to have people over and cook for today. And even though they probably never will once they get there, just like in apartments when you have the gym that nobody uses, like lots of demand that you know this generation has. Yeah. And so we need to make sure that we're incorporating that where it dictates. So it's it is definitely, and that's a simple example, but like with needs and what they are looking for and what how we amenitize and program that space is evolving as this generation evolves and what they're driving. And so, like, it's it is the absolute time to be in the best space and be a class A developer in that space. And I think what that will do is not only again create longevity and health for the seniors, which also creates economic return for the investor, but it also opens up housing that these seniors have been living in. And that starts to create more affordability, I think, in the long run for people who are looking to buy in the market as well.

Rens Hayes IV 1:00:59

It absolutely does. And something that stands out in that simple example of the kitchen, it's also understanding the demographic from an affordability standpoint, right? There's affordability and just normal housing. There's also affordability challenges in senior living. And then so we can't just put like a full-size gourmet kitchen in every single senior living facility because some people aren't going to one want it and use it, but two, it raises the cost of that development and the cost per unit. So it's like understanding who you're serving is really important in these developments.

Celeste Tanner 1:01:29

And also to make sure, uh, to your point, like as we talk about supply and what's driven there, that there may be a senior that demands that, but then the chronic challenge of appropriate care in senior living is still meeting the middle of the market. And we aren't a top 1% of the market developer, but inherently, like in the stuff we build, you're generally going to be in the top five to 10% of the market, is what's going to move into this space that is nowhere near meeting the middle 50% of the market. And frankly, as much of a component of anything is the level of care that you want to provide to give the proper level of care just requires a certain cost. As these new communities come in and you have aging product that's in place, again, you are just by nature supply and demand, you're creating that middle market product that just because of lack of inventory hasn't really existed before. So I do think there's two levels of opportunity that are there. And I think that's also part of the reason you're seeing a tremendous amount of acquisition activity happening in the senior space today that you really didn't see five years ago.

Rens Hayes IV 1:02:30

Yeah, but there's supply and demand right there. It's like any form of housing is gonna ultimately help affordability because we're bringing more supply to them. Why join NYOP as their 2026 chair?

Celeste Tanner 1:02:42

I have been so fortunate in again, we talk about investment of time. The time I've invested in NAOP has generated outsized returns for me, both in friendships, relationships, and in business. And I had just found that there are tons of organizations out there and they all serve a certain purpose. And they also been the one for me that has really been the greatest return on my time investment. And I want to make sure as many people as possible know about that. We're it's a 22,000 member organization. We have 55 chapters across North America. I want to make sure that even those 22,000 members know that by nature being part of an AOP, that they actually have access to the strongest network in the country and that they can build those relationships. And I'll tell you now, and I've been telling every member and non-member that will listen to me for more than three seconds. So you got to hear it too, Rams. Is we are at a moment in our industry where we finally have to widespread mass adopt technology to innovate our business. And we have been terrified as an industry of doing this because again, we have to be the crystal ball that de-risks five, 10, 15 years out. We can't be an early adopter of anything and it not work. So it needs to be a proven concept and proven model. I don't think we have the luxury of choice for that anymore. I think we need to make technology work for us and not wait for it to work for us. And now's the time for that. And the only way that we're going to accelerate that is to test, prove out, and establish best practices across our network. And the bigger that network will be, the faster that level of success will be. And it will change the way our businesses are organized. It will change the way we design our projects, it will change the way we build our projects, it will make projects more affordable, it will make them faster, which will also make them more affordable. It will help solve all the economic challenges that are happening, or at least most of them, if we can really implement this effectively. But we can't do that and just sit behind the walls of our office and try and dabble and dawdle and hope something works. Like it's gonna take the industry as a whole to solve this. And we've got the tools. We just have to make them happen.

Rens Hayes IV 1:04:49

Celeste, what a great way to wrap up today's conversation. I feel like that one commitment from you hits so many things that we talked about. It's like one, like being willing to give your time is more than any dollar and a way to give back. It's an organization that you grew from, and so here you are trying to give people in that organization maybe that one nugget that changes their percept their perspective and the trajectory of their career. And then also that abundance mindset, right? It's a collaborative, like we're all succeeding together. So why not share that with that community to try to have a bigger impact? I know you said you didn't love reading business books and you grew through a lot of conversations and talking to mentors and people ahead of you. Do you have a book or podcast you would recommend to the audience?

Celeste Tanner 1:05:30

So I do listen.

Rens Hayes IV 1:05:34

Let's go. I love that.

Celeste Tanner 1:05:35

No, I've been able to listen and you have such great. I'm so glad I was able to sneak in. Like you've had such incredible interviews with these great minds, and they're so much good. Yeah, I appreciate it. I also nayop has a great podcast as well. That we really, again, we have great minds and talent that join there, really good insight. Relaj just has one, but believe it or not, the one I listen to the most really has nothing to do with real estate. And it's a popular one, so I'm sure people do, but I listen to the all in podcast pretty much religiously. And the reason, yeah, and the reason I do it is again, these are people that they're taking a tangential business and they're talking through it and the market impacts of that. And that helps influence the way that I'm thinking about my business, not just from a technology front, but even in the way that I'm processing my information and the way I'm thinking about it. And where am I gonna go too far on the curve or where I can't. I do the same thing with books. I have a recurring book that I read. Anytime things get a little wobbly, or you start to wonder like, is there an end in sight? Are we are we gonna come out of the cycle or was there?

Rens Hayes IV 1:06:39

To look for something.

Celeste Tanner 1:06:40

Yeah, no, exactly. And I have my like comic relief. I'm a big Douglas Adams fan, so I'll always go back and read Hitchmiker's guide and stuff like that. But reading history helps a ton. And there's a book by Dan Carlin that's been out forever, and I've probably read it six times at this point. It's called The End Is Always Near. And all it does is take you through these moments in history where it really looked like the end of the world for that civilization at that moment in time, and what happens afterwards and as a result, right? And there's just five or six vignettes there, and you read it and you're like, that's right. We have to remember we may have generational times, but we don't really have unprecedented times. And what allows civilization to advance beyond where we are right now, because we've done it successfully over and over again over the millennia. We we can absolutely do that again and come out better on the other side. So I get a little bit of reassurance in this.

Rens Hayes IV 1:07:31

Yeah, what a great message to leave with the audience. And I also recommend the all-in podcast. It's a great way to challenge the way you can honestly think bigger in macro impacts. Celeste, thank you so much for sharing your journey. I appreciate what you and Marshall and the team at Confluent have built, and I'm excited to see the impact you have on the industry and the professional industry for years to come. So thank you again for us.

Celeste Tanner 1:07:55

Yeah, thank you so much for having me. It's been wonderful.

Rens Hayes IV 1:08:00

Everyone, thanks for tuning in to design development. Real quick before you leave, our goal is to help as many people as possible. We're a growing community and you're a big part of it. So just click that send button. Send this episode to a friend to let them get the same insights that you got today. We appreciate you. You next time.