Intro: 0:05

Welcome to the business of Houston Hospitality, where we visit with and learn from the people behind Houston's vibrant and diverse hospitality industry. Each week we speak with owners and operators of restaurants, hotels, venues, attractions, museums, theaters, and more. Please welcome your host, president of the Houston Hospitality Alliance and founder of Convive Hospitality Consultant, Jonathan Horowitz.

Jonathan: 0:35

Greetings from Houston. This is the Business of Houston Hospitality. I am your host, Jonathan Horowitz, and today I will be speaking with my good friend, Thomas Nguyen, the restaurant practice leader from CBRE Commercial Real Estate here in Houston. As always, we will talk about Thomas's history, his history in Houston, his business, what's going on with business. that how things are going right now, and what Thomas thinks about Houston's hospitality industry and its future. So welcome to the show, Thomas Wynn.

Thomas: 1:08

Jonathan, thanks for having me. It's always good to spend some time with you.

Jonathan: 1:12

my pleasure. Thanks for being here. And let's jump in, with a little bit of your history because I know like me, you have come to be where you are currently through a sort of roundabout way and, have had a number of different careers touching on a number of different things, including the hospitality industry in Houston. So, start us off, give us an idea of how it all started where you grew up, where you're from school and your professional life.

Thomas: 1:42

Yeah, sure. So, this is my third and I would like to say last career.

Jonathan: 1:47

Never say never,

Thomas: 1:50

I I sleep better at night thinking that, my entire experience, first as a lawyer, then as a restaurateur has led me to this point. And it really has. Obviously I wouldn't be in this position without having had those two previous careers, I think. But yeah, my first career was as an attorney. Second career was as co founder Peli here in Houston, which later on, we'll be able to, I'll be able to tell you about a potential kind of happy ending there. But yeah, my family has been in Katy since 1979. I'm a Houstonian and proud of it. I've been able to, I was here. And I remember being one of those people that were not proud of Houston. It was not exciting at one point it was, meat and potatoes and nothing to do and, too humid and all those different things. And. You fast forward, 20, 30 years and now I cannot imagine living in it in any other city in the world, really. And I know that sounds silly for some people, but it's a very it's become a very vibrant, comfortable, diverse city, especially being an Asian American. I love what the city's become. I think we've been a big part of the fabric of Houston and how it's emerged. And it's a very comfortable. Exciting city. And

Jonathan: 3:08

but we still. We still have the humidity, right? But a lot of other things have changed over the course of the past 30, 40 years, for sure. I've been here 34 years now pushing 35. And the difference, as you say, is been extraordinary, particularly. In our respective industries and the development and the growth and the diversity and everything that goes into it, it's it's really pretty impressive. And now I would say it's starting to get the recognition, and the national accolades that we always knew it deserved, but,

Thomas: 3:42

of time.

Jonathan: 3:43

it's about time. Yeah. So now you went to school in Austin, correct?

Thomas: 3:47

I did. I'm a diehard longhorn. Went to UT for undergrad and law school.

Jonathan: 3:53

Yeah, so you were double up there and then came right back to Houston, right?

Thomas: 3:57

Yes, I'm the only child. So I always knew I would. I didn't want to be too far from my parents. We have a close relationship. So it was always a known thing that I would come back to Houston after graduation.

Jonathan: 4:11

And so how long did you practice law?

Thomas: 4:14

Three miserable years.

Jonathan: 4:15

Three miserable years? Boy, that's,

Thomas: 4:18

Oh, and I say miserable. It's not fair to people that the firm, the people were great. Shout out to Lennon Wright and Susan Wright and the group over there. It just wasn't for me.

Jonathan: 4:28

And so Obviously you made a significant change. How did you jump from? Practicing law to getting into the restaurant business

Thomas: 4:38

A lot of people think it was just a an easy transition. It wasn't. I quit being a lawyer without a plan and I did that because I was, by the third year, I was just fearful of being discovered as a fraud and an imposter. And I said, listen, I got to make a change to give myself an opportunity to figure out what I really wanted to do. I think I was 27 at the time and I went, I love marketing and PR. I was trying to find myself and I had a lot of pressure because, no one really. Just quits being a lawyer at that point and not have a plan. Long story short, one of my buddies from college ended up, joining his startup to focus on marketing and branding. And he happened to be in the hospitality industry and the point of sale community. And that's how I met chef Paul and chef Paul had, three Paul's pizza shops at the time. But his passion project was. creating a South African restaurant brand that was meant to be for the mainstream.

Jonathan: 5:36

I didn't realize he had, I didn't realize he had started out in pizza. I did not know

Thomas: 5:41

oh yeah Paul's always had the best pies. He was flavoring the crust back in the day, way before all the big brands did it. He has the best wings. That wing recipe is actually ended up at Peli. And so a lot of the things that he did in pizza translated very well to Peli. So yeah Great experience. I convinced him that could be his partner that I knew how to market Peli Honestly, I didn't at the time. I was just fake it till you make it But I did have an idea of this is what I would do to make it appealing and approachable for people that were not familiar with South African cuisine, including myself at the time.

Jonathan: 6:19

Yeah, that seems like a significant departure from and I would imagine there was not much South African cuisine in Houston at the time anyway. Was anybody else doing it?

Thomas: 6:29

No one was doing it. I think a couple of people had tried at the time. I think there was one restaurant in Sugar Land that opened and closed. Today you got Peri Factory, you got Nando's has come into the market. I'd like to think that we set the stage for those brands to feel comfortable coming in. I would definitely say we were easily the most dominant kind of South African inspired brand in Houston and pioneered that kind of transition and allowed people in Houston be familiar with the myriad of flavors that kind of makes up South African cuisine. And, and how to, that was 11, 12 years of the best time of my life, right? We had, it was an amazing run and we did things I never thought we would do. Obviously learned a lot and made a lot of mistakes. But I think, fortunately, all those things have translated to what I do today,

Jonathan: 7:20

Yeah I know having talked to a lot of people and having been through some of these things myself, we often learn a lot more from the mistakes than we do from the successes.

Thomas: 7:29

unfortunately.

Jonathan: 7:30

Yeah. Yeah. So, take us through a little bit what you experienced as a restauranteur in Houston, particularly as you were building a brand, as you were building something that. People really weren't familiar with, hadn't come across before and what that experience was like for you. And, I recall specifically while you were doing that was the timeframe where, The hospitality industry, the restaurant industry in Houston was really taking off all of a sudden we were getting, James beard recognition and folks coming from other parts of the country to open restaurants here. And, it was really, I feel like it was that eight to 12 years ago when everything started and it really started growing and snowballing and that recognition and the growth and just the elevation of the whole industry. You all were coming up right around that same time.

Thomas: 8:26

I agree. I always tell people if people that have been to Houston or traveled here, there's a big difference between coming here before 2009 and after 2009. Because I'd like to think that after that, the massive recession that our country went through in 2009, that was when Houston started. It's this growth, the growth that has not stopped. And you're right. You're starting to see 2009 and 2010 and that's when we still were able as a city. We're still able to because of oil and gas or energy or what have you we're still able to hang in there and I think you know everything started growing from that standpoint. We that's when also online reviews and like Yelp and all these different brands You know that yelp thing today you look around and google reviews and yelp reviews and amazon reviews But if you remember, you know at the 2010 those are still in its infancy. We took advantage of that that's how we built our brand. We didn't have a lot of money in the beginning to market nor could you market? A south african restaurant through traditional means just because people don't understand What that is. And so we wanted to focus on awards. We focused on reviews going back to your question. What did I experience and learn about the restaurant industry? Geez, everything I learned how to be a better leader. I handled a lot of the pre ships and, at the restaurant. And so learning how to. Encourage and motivate, anyone who is like between 18 years old to 45 years old and, connecting with people, customers, strangers are coming into your doors and making sure that they're taken care of and very quickly establishing relationships with them. Right. It helped me immensely on the interpersonal communication level. The person that I was before Peli and after Peli is almost 180, completely different people. And, I attribute a lot of my personal growth to what I went through as a restaurateur with Peli.

Jonathan: 10:23

Yeah. And as I recall, you had two or three locations and you had started to branch out into different variations on the theme because the original Peli, as I recall, was a higher end experience, right? Sit down, full service, all of that. But then you also worked on creating a brand that was fast casual.

Thomas: 10:44

That's right. We wanted to be that brand that reached out to everybody, and we realized that not everyone could afford a hiring experience like Peli. So the thought was, let's create a QSR like Peli Kitchen that would help us maybe reach even more people, maybe scale it out even more. I think in hindsight, it probably would have been smart just to focus on Peli, these are things that you have to maybe you don't learn until you go through the whole process. We, I definitely think, being new to the industry somewhat, we assume that we would always be doing 1200 a foot and we, the success would always be there. And so we made a lot of mistakes and not understanding. Maybe RPNLs as well or economics or just understanding the industry as well and just assuming those sales would always be there and really diverting our attention away in a bunch of different ways. And so I think we did a lot of good things in the community, but definitely we were we definitely had a blueprint for what not to do when you have created a successful enterprise. And, definitely, are there things that would have changed if I could go back 100 percent but, again, it's easier to do that through the lens of having gone through that experience and, sitting here, 15 years later.

Jonathan: 12:01

Yeah, and as you alluded to at the very beginning, I would imagine that those experiences and those difficulties and the various trials and tribulations have informed you and allowed you to be a better advisor in your current role. When you're working with, yeah, when you're working with restaurant clients who are looking for a space and have all the hopes and dreams that you did in the very beginning about creating new brands and expanding and, taking over the world. And, I would imagine that you have a lot of, Conferences and discussions and heart to hearts with folks saying, you may want to think about this or you may want to think about that because it doesn't always go to plan.

Thomas: 12:50

No, you're right. I was really scared of having to start over and transition to a third career that was not familiar with, but there's not, there is really no other broker out there that has my background experience that doesn't make me better or less than another broker. It just means that I just have a different perspective and it's been easy for me to add value to all the different restaurateurs and hospitality groups that I work with, even non restaurant groups. Because I've been there, right? I've been in their shoes. I've made the mistakes. There are certain aspects that I excel in terms of PR and marketing and branding. There's certain things that I know from an operational standpoint that we tried. The good thing about my background is we tried everything. We've been, I'm telling, good or bad, we, We had a private label wine. We've been in whole foods. We've been on TV, a handful of times we've gone through the, like the process, we've gone through private equity. We literally have gone through all these different things. And that experience has definitely allowed me to add value to. Each and every client that I work with.

Jonathan: 13:56

So I'm curious to know from your perspective, because I've been through many of the same things and have had a somewhat strangely similar Career path in certain ways. And,

Thomas: 14:10

have, I've always, you're a mentor, Jonathan, let's be real, right? I've always remember I called you during that time. You were one of the first people that I called when I was thinking about making this job transition. And so, yeah, I essentially try to follow your blueprint.

Jonathan: 14:24

well, I certainly appreciate that. And I, sometimes I forget that we're both only children. So we have that. Similarity as well. I'm curious to know from your perspective, because I have some of my own thoughts from having gone through it. But particularly now, when we all know it's even more difficult. In the hospitality and the restaurant industry in particular, what would you say, from your perspective, is one of the biggest missteps or misconceptions or something that, that you see or often see or repeatedly see folks who are trying to make it in the restaurant business now? What do you see them doing that you say, have the opportunity or hopefully can convince them not to do? Or what are some of the biggest mistakes you see currently in people trying to open and develop and grow and create restaurant businesses?

Thomas: 15:21

Unfortunately, Jonathan, like having been there in 2009, having been, I'm around restaurant tours, today in 2024, a lot of the things have not changed. I would say maybe if I had to name the three top big kind of pivot points that caused pain or the mistakes. Number one is always money, capital. And even today it's. It's hard to get capital, as we sit today, right. Cost of capital is higher than it was back in 2009, right. The ability to get through an SBA has not changed. Getting investors on board for restaurants is even harder than it is. Yeah. I would say it's harder now than it was in 2009. So I think, and we always say, well, make sure you have enough money, but that's always, as it's easier said than done because. Things are just more expensive now, the back in the day when you hired an architect, the assumption was the architect would design your space as well. Now it's, you hire an architect, you hire a great interior designer. Firm like Jen design group or what have you, Norton creative, right? And that's a normal thing because it's so much harder to stand out now than it was back then. And so, that's, finances. Number one, I would say number two, marketing, having a a very detailed marketing plan in today's market, right? Because marketing a restaurant today is dramatically different than it was 2009, 2010. We didn't, there were no influencers back then. Facebook was a thing back then. Like, you would, that was the big deal back then. You, I

Jonathan: 16:55

Social media was just starting just happening. Yeah,

Thomas: 16:58

was no tick tock,

Jonathan: 16:59

Tik TOK, no

Thomas: 17:00

I don't think there was Instagram. I think that just started around the right. Facebook was a thing back in then. And back then, if you can use Facebook, marketing, it actually worked. I don't think it works anymore. Right. Because it's so fragmented now and you have influencers, so many more ways to get out to people.

Jonathan: 17:16

Certainly with. social media and influencers and all the different platforms. It isn't the same as it used to be where if you could put an ad in the local glossy men people would come to check you out. What else, what else are the, some of the challenges that you see your clients facing as you try to get them into new spaces and get them up and running?

Thomas: 17:38

I would say, as part of marketing, right? Creating an experience that people appreciate. I think it's going to be harder and harder for franchises to, become successful and profitable. Right? Just because, especially in Houston, there's thousands upon thousands of restaurants opening in here all the time. It's hard to stand out. And so I think with the marketing component and also the brand experience component you can't, you can, you used to be able to get away with a lot back then. Nowadays it's even if you have a great restaurant, how do you keep the customers to come back? And it's not like they don't like you. It's just because there's new things and opportunities for them to try all the time. And, people that used to have regular that be regulars and they would come to your restaurant three or four times a month. Maybe they go once or twice a month, not because they don't like you, but because There are just so many other things to try and do. I think the third thing is also just appreciating, and again, these are all things that people know, but executing is the thing, is having the right team with you to execute. It's, one, labor pools are harder to find these days. Two, it's more expensive. How do you find someone that can, you can rely on to be your captain if you will, and continue to motivate your team and, o oversee the p and ls as they should be? That's hard to do and you have a lot of restaurateurs that'll come in, even the experienced ones. Well, hiring the right person, that's always a crapshoot. It's difficult to bring someone on early on because this, then it becomes a capital issue. And so, I think once you combine the three big mistakes, right, finance, marketing, and labor, it's again, it hasn't changed, but those three things are harder to do now than they were in 2010.

Jonathan: 19:25

Yeah, for sure. And it's not slowing down. And so I wanted to talk a little bit now about your transition into real estate and how long you've been doing that what that looks like for you. What kind of clients you're dealing with right now? What do you see, coming into the market? Are you only dealing with local folks who want to grow or expand? Are you working with national companies that are trying to come in to Houston and get into the Houston market? Because we know it's, it's successful and it's continuing to grow and folks from all over want to be here and do business here. What has this been like for you in terms of transitioning into the real estate side of things, as opposed to being in it as an owner operator?

Thomas: 20:13

I was terrified. No one starts life over at 45 at the time, I think. And, I wouldn't be here without really, there's a handful of people that are very, that play crucial roles in me being at this point, first and foremost, John Wynn, J Hunter Properties. He was a friend. He used to dine at Peli Vintage Park. And I remember he always used to tell me Thomas, you would kill it in a commercial real estate. And I remember that statement and I finally called him on it at this point when I was trying to figure out what I was going to do. And I asked him, what do you mean by that? And why do you think that? Can you walk me through, based on your experience, I think your experience as a restaurateur would translate very well. And he ultimately introduced me to, two of the most important people in my life at this point, Brian Ashby, Sidney Dixon, they were two of the top 10 of rep, people at CBR Houston. And I met with them and we just connected and they were trying to grow their team. And they've really provided me with a mentorship that I needed to really, I started late, right? I came into this, they're restaurant brokers doing this for two decades, three decades. Right. And I'm coming into this brand new at my age, how do I compete? And they really helped me skip the line if you will. And they got me ready in a very short period of time. May partner with them, help, get promoted to restaurant practice leader at CBRE. And so now it's just been a dream scenario. I get to work with. Everyone, James Beard winners local operators, single units that are trying to expand, big brands. We work with everyone from, Brian and Sydney, did the Kirby Icehouse deals to, we work with the, eat side with, Doris Metropolitan, Hamza flagship restaurant group out of Arizona, which is, they have blue sushi, sake grill, and a bunch of other concepts. Jim Wayne, Virginia, Ramen, Jen, Korean barbecue Paris baguette. Tom Kunan and James Beard winner Don Breaux, James Beard winner. The it's been awesome, and I, there's a lot of brokers that focus on national work. I like local and regional just because I'm a Texas and Houston boy. I like to touch and feel and know the people in the community and it's been amazing. We also work on, our team works on national stuff that are non retail, non restaurants such as, Nordstrom Rack Foot Locker, Restaurant Depot, Seafood City. Our biggest client, if you will, is Burlington, and we handle their national downsize initiatives. So Burlington is, it will be downsizing, their store is moving forward to right size. And, they're in growth mode and they've been very successful and we're helping them, increase their bottom line. And it's a very exciting proposition, right? So, I get to sit here and I get to work on, obviously restaurant stuff, but also the non restaurant stuff that we have, or, my, I'm a Maxinese, my wife is as well. We shop at Burlington, we shop at TJ Maxx and Marshall's and all those stores. And, So it's great to be able to represent brands that we're familiar with and can advocate and represent successfully.

Jonathan: 23:16

Yeah that's pretty cool. So in terms of the restaurants in particular, whether they be local or coming into the market from somewhere else, are you seeing any trends, within the industry that people are really gravitating towards, is it. The return of fine dining, or is it more about fast, casual and speed and convenience and value? Or, is it chef driven? You know what? What kind of trends are you seeing within the Houston market in terms of restaurant and hospitality?

Thomas: 23:49

I don't know, for me, I've, like, all the categories that you just mentioned are still hot categories. People still want a place to go out, get dressed up, and have an elevated experience, especially from a known chef. I think that will always have a place. I think especially out in the suburbs that, the QSRs and having something comfortable that are family friendly, Those are going away. If I had to pick anything, it would be the experiential brands like the decoy that has three volleyball, sand volleyball courts and, a bar experience, large format patio, the curvy ice house, obviously what they've done and, drop shots, first indoor large format pickleball experience with a bar attached to it the conservatory, things like that. So I think, especially in Houston, we don't we need things to do. We like places to be able to go to and spend some time with friends and family and kind of congregate that way. And so I think concepts like that, PKL social, for example, a great, Near Washington, on Washington, or if you will, pickleball experience next to a FM kitchen. So it's a great place to go grab some great food, play some pickleball, meet some friends and socialize. And I think if anything I see those trends continuing to ramp up here in Houston.

Jonathan: 25:05

So On the flip side of that, have you seen anything, any types of concepts or restaurant genres that you think are on the way out declining? What is past its prime?

Thomas: 25:19

I, the first thing that comes to mind are ghost kitchens.

Jonathan: 25:21

Oh yeah, for

Thomas: 25:22

Like, I think after COVID, that was supposed to be the thing. And, all these kind of like, name brands or, unknown in the market, right. They're selling purely out of a ghost kitchen. I think those don't have long legs. Just because I think people still want that experience and they have so many choices. So why would you go to a place that you can't touch and feel and has proof? Proof is in the pudding, right? The reviews and everything. It's hard to get good reviews and it's hard to have excellent food when it's just delivery or it's just to go right? No matter what you do. So I would say, ghost kitchens, not a fan of those food hauls are very difficult to do as we've seen. And I don't know if

Jonathan: 26:02

particularly in Houston. Yeah.

Thomas: 26:04

particularly in Houston because you need a lot of traffic. You need a lot of traffic. If you're in New York and there's density, true density downtown, it can work. Maybe in the medical center, but you need something like hyper dense where there's always traffic. I know, I think our best one in Houston is probably the post. And, it is great, right? Some might, chop and block there. One of our clients, so successful at the post that they're going to do. First brick and mortar Montrose excited for them, right? And you got Leah James. Paul's probably done a great job out there, curating. I think the problem with the post is going to be has been, they're, they're traffic. How do you generate that consistent traffic outside of concerts during the weekend? And the parking, if it was free parking, maybe, but I think you get an hour. hour and a half, maybe free. And then after that you get charged and that's a tough pill to swallow because it's hard to stay there for less than an hour sometimes.

Jonathan: 26:58

Well, and certainly nowadays we've seen, and all the reports, downtown Occupancy in the office buildings where the post is located has not come back yet from, the pandemic and people have changed their habits and there's more remote working and it's hybrid working and, people aren't in the offices as much as they used to be. And like you said, you need that density and traffic particularly downtown. And it's tough. You think of all of the really great, successful, true food halls, they're all in cities like you described. It's, New York or places in California or, where there's other reasons to come there. In Houston, we've got to get in a car and drive to the place. And that just, it doesn't necessarily compute, unfortunately.

Thomas: 27:48

I will say, though, that one of the food halls I'm most excited about, because they have a great art component, is the Conservatory Galleria. Used to be the old Roxy. A couple buddies of mine, are doing that. And if it's just, if it was just a food hall, I don't think it would work. I even told him, don't do it. But I think, he was smart enough to incorporate. A couple bars in there and so people go there. It's becoming, from my understanding, a great happy hour spot, great weekend spot, and it's more of a bar that has food as opposed to a food hall that has a bar.

Jonathan: 28:22

Yeah, again, to what you were talking about earlier, and I think we've seen the consumer shift a bit to really wanting that experiential component to the dining, whether that's some sporting activity or sports bar type thing, or the pickleball, which is everywhere now, which is crazy. Or, one of the things that I'm not, A huge fan of myself is the whole vibe dining thing, where you get the dinner and a show, but it's not really a show. It's just dinner and, entertainment for lack of a better word. We've seen so much more of that. And I think, again, consumer. Consumer tastes have changed a lot. I, and I think COVID really brought that out, but folks want good value. They want the experience. They want more than just the food nowadays. And I think that's going to continue and it's going to change the landscape and how restaurants think of themselves, how they get built out. What's important. All of that has changed. And certainly technology has had a big impact on that as well. Third party delivery services, online ordering, all of those things. And that's changed dramatically just in the past five years.

Thomas: 29:31

I agree. And I, it will, here's one thing too that I think it'll make it harder for restaurateur. is I think the consumer now, especially in Houston, is much more sophisticated and educated. And I'm not talking about economic levels. They're like even out in Katy, where we have Katy Asia Town. You have a much more educated population now that can appreciate what true kind of or true where Asian food tastes like, right? I remember 10 years ago, fish sauce still, it wasn't a thing. Now I think if you go to a restaurant, I've seen on all the KD 4 grand foodies, a photo place opens and there's no, they don't have, fish sauce. That would not have happened 10 years ago. And that's how things have changed for the better. And I think it will be harder for restaurant tours from the standpoint of what people understand, real flavor. The expectation is authenticity and it's going to be harder to get away with kind of subpar food. And I think we're starting to see that in some of the restaurant closures in the last six, eight months.

Jonathan: 30:33

Yeah, as we know, obviously the entire industry is still trying to dig out from the COVID years, and to get back on track and there are a lot of financial pressures, obviously with inflation and the cost of doing business overall. And I'm curious to know in that regard, how you've experienced what you've experienced and how you see just rental rates from a real estate standpoint, where do things stand? What are people looking at when they're trying to get into new space has, have the recoveries and getting through the COVID years and, how expensive is it if people want to get into real estate in Houston?

Thomas: 31:08

It is a landlord market right now. There's, as you can imagine with inflation and higher interest rates, there hasn't been a, there's been a decrease in, 10 years, 31 exchanges, a lot of new developments have were paused, right? A lot of the great projects coming in line and Houston has some Really awesome projects coming in line, but they're 12 to 18 months away from delivery and you have this gap and so You know as that all translates to higher rents. Some of the second gen quality second gen Properties we've seen in the last six months people are paying just like at a house. They're paying, market if not higher Sometimes they're paying the back rent for the previous tenant You I mean, it's crazy, and it's become so competitive because the supply is diminished. As a result, rents are higher than they were. I would say even when I first started two, three years ago easy. Brands coming out of town that are ultra successful, for example, that are used to landlords throwing 300 400 TIs post COVID when they had so much space. You're not seeing that anymore. I always, the hardest conversation I have with an outside brand is you cannot get those TIs here in Houston. Not because they don't want to pay it, they don't have to pay it. And, it's also not a guarantee that a successful brand outside Texas coming into a market like Houston that is sophisticated, that has so many restaurants here, so many options, there's no guarantee they're going to be successful. And so why would a landlord pay that, right? They'd rather find a local regional brand that they know is successful and they don't have to pay those TIs to get those quality tenants right now. I hope that changes from the standpoint of like, I'd like to see a decreased rent. I think they're higher than they need to be at this point. Because Hey, remember at the end of the day, Landlords have to acknowledge that there's only so much a tenant can pay. There is a thing like occupancy costs, right? As a restaurateur, your rent cannot be You know, ideally, higher than 6 to 8 percent of your overall revenue. When you can use 10 now, it's projected annual revenue. Ideally, it should be closer to 6 to 8%. And if you're doing great numbers or you're really tight on your P& Ls, it'd be lower than that. But when you're paying 60 rents and another 20 in triple nets. You're paying$80, right? And you're paying on 3000 square feet. You're paying a quarter of a million dollars. You gotta do, two and a half to$3 million out of a 3000 square foot place. That's hard to do right now. And that's the thing. To do a thousand a foot, which is still the gold standard. It was way easier to do in 2010. In 2024. Man, if you're doing a thousand a foot or more, kudos to you,'cause it is harder to do.

Jonathan: 33:53

Yeah. It's amazing how things have changed and everything about it. I talk to people all the time about the restaurant industry in particular, and everything about it has gotten incredibly. more difficult than, even five, 10 years ago. So before we wrap this up, Thomas, I want to ask you one more question about the industry in terms of your outlook for the future. What is the next five years look like, particularly, obviously with regard to the real estate and hospitality industry overall, What are the next 5 10 years look like in your mind?

Thomas: 34:29

In my mind, I still think Houston is a premium market for growth and expansion for not just F and B, but for retail in general. Listen, we live in an amazing city where the cost of living is still at a reasonable level. Incomes are at a reasonable level. And here's the thing. We're still one of the cities that, get continued growth and people moving here from other states. At a clip that few other cities can measure or compete with, right? People are still moving here from california and new york because their dollar goes a longer way I think we have a really balanced political climate. I think it's a very diverse population and we're not landlocked So, I mean we have a lot of areas that will continue to grow and flourish because the population will continue to increase and yeah, outside of the humidity, I think we have all the different factors that you'd want to see it as a business. We are a pro business state. And I think, that helps drive, expansion and make us the right place to continue to grow. So I'm excited about the next five or 10 years being here in Houston, being here in Texas. A lot of companies are coming here and planting a flag in Houston, expanding out to the suburbs, then tackling Austin and San Antonio and Dallas, who in their own right are experiencing growth, at a very high level. So, people from Canada, we're seeing, we're working with a group from Canada and California, even outside in Asia, whereas Houston used to be maybe fourth or fifth on their list. It's at the top of their list now and that's exciting as a commercial real estate broker.

Jonathan: 36:00

Yeah, no, and that's great to hear because we know when all those people are coming into town, we're going to have restaurants to, feed them. And that's where we come in. And to your point earlier, I think one of the biggest, benefits of being in Houston is its diversity. And that's certainly reflected in the hospitality industry, which is, Fantastic. So we are talking with Thomas Nguyen from CBRE, commercial real estate here in Houston. Thomas, I'm going to wrap this up with our three questions that everybody gets

Thomas: 36:31

Speed rounds go.

Jonathan: 36:33

round. That's right. So, a bit of a non sequitur, but it's relevant for you. What is your favorite travel destination? If you're going to get on a plane tomorrow for no reason other than to go somewhere, where are you going?

Thomas: 36:50

I'm going to answer that with my dream trip. I'm a massive Emily in Paris fan. My wife's going to kill me for saying that on this podcast, but one of my, one of my bucket list items is going to Paris with my wife, Christine.

Jonathan: 37:02

Awesome. All right. Well, I think why not make it happen? Just do it, right? Just do it. We touched on this just a minute ago, but the second question is always, if you are talking to somebody who has never been to Houston, they are from somewhere else. And you are trying to convince them why they should come visit. What are you going to tell them? What is the number one reason that they should come to Houston and visit, spend some time here?

Thomas: 37:28

I think the first thing is like, and a lot of people might hate on me for this. I think we are the best. Food in the world, right? You may laugh at that, but the reason I'm saying that is because I think compared to other cities in the U. S. Okay, maybe not in the world, but in the U. S. Right. I think we have some of the best food in the city because we have the best of almost everything, and that's hard for another city to compete with. You're talking about Asian cuisines and barbecue and Mexican cuisine. Text me. We have so many variations of so many different things. And we excel at them. I think, my wife's family went to Seattle the other week and said, man, we are spoiled. The food there is not even anywhere close. And, I think you can say that about most other cities in the US. I think that's one is the food. Two is I think the people, I think, Houston, I've always felt like. There's a big component of Southern hospitality down here. I think it's, we've all grown up in a very diverse population. So not to say there are no races in Houston, but I think we've reached a level of civility that maybe some other cities. I have not,

Jonathan: 38:32

I wholeheartedly agree. The diversity here is really fantastic. It makes a huge difference. And at last count, the last I heard we were 55 or 60 different cuisines, represented in Houston. Yeah. Yeah. That's fantastic. Okay. Question number three, final question for you. You, as we have discussed, have been through three distinct careers so far in your lifetime. I'm saying so far because there you never know.

Thomas: 39:00

No, I'm done.

Jonathan: 39:01

well, through all of that if you were advising the next generation, somebody is coming to you and asking, for your best advice, what is what you would consider the most important thing that you've learned in your business career that you would want to pass on to somebody who wanted to follow in your footsteps.

Thomas: 39:23

Two things. Number one is, and I know this sounds cliche, but you have to do something that you're so passionate about and you enjoyed so much that you don't consider it work. And the reason that's important is because you need that in order to be competitive and to stand out in your industry, whatever that is, because like, for me, I don't think of this as work. I work seven days a week. My clients call me, text me seven days a week. That's crazy for some people. I'm okay with that. And my wife's okay with that. Right. I'll get a text or call during dinner. She'll say, pick it up because that's how it was when I was in a restaurant, like you couldn't be off and that, that has allowed me as a broker. Now it's like, it's just normal. It doesn't bother me. I'll have clients call me nine o'clock at night just because that's when their shift, that's when their restaurant ends. Right. I can handle it. It's not a big deal. It's not an imposition. So I think you need to have a career where you can have that because if you have that. You can be so competitive that you're going to be able to stand out. And I think the second thing is having the mindset of like, this is the best thing I tell people. You're either one of two things. You're either a Rainmaker or you're the best at that transacting, right? Like, so as a lawyer you either need to bring in a ton of business. And Rainmaker. You're so good at networking and generating business. You'll never you'll always excel right or if you're not that type you need to be able to transact meaning You know, and you're the smartest at transacting in that particular field You have to be one of the two if you're not one of the two you're going to be in no man's land And you'll be mediocre at best and so I think you know Those two things someone in a career finding something that you don't treat as a job so that you can think about it Think about how to improve your job 24 7 that's going to help you get to the next level and two You know, looking at it from the standpoint of like, am I good at generating business or am I good at transacting business? One of the two.

Jonathan: 41:12

Excellent advice. I think that's fantastic. So we certainly appreciate that. So I have been talking to Thomas Wind, who is the restaurant practice leader at CBRE commercial real estate here in Houston. Thank you, Thomas, for being here. Of course, many thanks to the Houston Hospitality Alliance for always connecting, educating, promoting, and advocating for the entire Houston Hospitality community. You can get more information on the HHA at www. houstonhospitalityalliance. com. Please join us next time as we continue to explore the people and the businesses behind Houston's amazing and diverse hospitality industry. We'll see you next time. Thanks, Thomas.