Rocket Science: Larry Botel
On how offices aren’t dead, why pitch clocks are good for baseball, and where to go for the best cheesesteaks in Philly.
Larry is the founding partner of JOSS Realty Partners, and over the course of his 35-year career in real estate his work has included all facets of property acquisitions and sales, complex financing structures, and multiple property debt securitizations.
He is also President of Alliance Sports. Alliance owns three affiliated Minor League Baseball teams, the Richmond Flying Squirrels (SF Giants AA), Montgomery Biscuits (Tampa Rays AA), and the Omaha Storm Chasers (KC Royals AAA), a USL League One Soccer Team, Union Omaha, and Baseball America Magazine.
Who’s your favorite Philadelphia Phillie of all time?
Oh that’s easy, Steve Carlton. I was at that right age when Carlton and Mike Schmidt and Bob Boone and all those guys won the World Series. But Carlton was definitely the one because he’s left-handed and I’m left-handed. That was the clincher.
Supposedly he has softened a little over the years, from what I’ve heard through different channels, which is pretty amusing. But he’s still around. I think he’s a little better than when he was a player about interacting with fans and showing up at events and things like that.
What’s the most overworked media narrative about real estate right now?
That the office is dead. There will be severe repricing and reorganization of the office business, but 75% of office buildings are gonna be fine and full once we go through this economic cycle, which has lasted for a very long time and will continue to.
There’s a general perception out there that nobody goes to the office anymore, and that’s just not the case. There will be a return to normalcy that won’t look like it used to, but also won’t be an empty Midtown. It’s not realistic.
As somebody who’s a senior management person, I’ve now cycled through two sets of employees here recently. The office is a much better place to do business, teach, interact, and come up with good ideas. There are definitely people who don’t require that to be productive. But most businesses need that type of interaction to really thrive and do better.
What do you think about Major League Baseball’s new rules, many of which were piloted in the Minors?
Love them. The pitch clock alone is gonna save a half-hour off of the game, which is huge. And I don’t think even they expected that when they put it in place. They had the pitch clock in place in Triple-A last year, and the average game was 26 minutes shorter, which is enormous.
I’ve always believed it’s not the pitchers that cause the delays; it’s the batters. If you really look at the flow of a game, it’s the batters who are acting differently, not the pitchers. I don’t know why they never really went after the batters in that regard, but maybe it was because home runs were the focus.
One surprising result of the experimentation was how little of a difference “Robo Umps” make. It doesn’t change the game all that much and there are certain aspects of it that don’t work as well.
But one thing we’ll see more experimentation with is the appeal … giving teams a certain number of appeals on balls and strikes. Like when you watch the US Open and they do the replay and the crowd gets all excited.
What advice would you give to a brand-new investor in a Minor League team?
You know, we’ve been most successful in good markets. That involves a number of different things, not just demographics, size, or socio-economic conditions. It also involves competition.
We own a team in Omaha and we can’t do anything to get on the front page of the sports section, but they have like a summer football game at the University of Nebraska and it’s splattered all over the paper.
So you’ve got to really understand your market in different ways, and get back to basics as far as evaluating the competition. In Richmond, we’re the only game in town and we do extremely well. We play in an awful ballpark and we sell out multiple times in a season, and people don’t care about the ballpark because they love the Squirrels.
If you could change one thing about USL League One, what would it be? You have a magic wand.
First, I’d like a better television contract overall. Then, one thing the USL’s experimenting with is promotion and relegation. Other football countries have that, of course, and they really want to do it here.
Obviously, the three leagues need to fill out. But eventually, between Championship League One and League Two, there will be promotion and relegation. It will be interesting to see how the fans in the US approach that and adapt to it. I think it will excite people and increase attendance and viewership.
What’s a sneaky trend in real estate that more people should be paying attention to?
The one thing that’s going on right now that’s pretty interesting is retail. It’s kind of bottomed out. Unlike everything else, which is still pretty much on a downward trajectory … even apartments at this point, because of oversupply.
So, now that retail has sort of rightsized its supply of space issues, how does it go into the next generation of the retail business? Balancing online shopping habits versus the strong interest in brick-and-mortar retail positions. You now have the right amount of space for the retail business from a demand perspective, how will that evolve?
Something else, since I am an office guy, if people are really going to the office three or four days a week, which I do think is a real thing, will office buildings stay open five days a week? Or do they stay open three, four days a week? Why spend the money and the carbon on HVAC, electricity, security, cleaning, etc.?
So, you could see a world where there are buildings that have five-day-a-week schedules and others with three-day-a-week schedules. When you’re looking for space you’re choosing your building based on how many days they’re open.
Those dynamics, a lot of which came out of COVID, but were sort of evolving anyway, will be interesting to watch. I feel like apartments and industrial have sort of figured out where they are relative to real changes in the business and office, but office hasn’t really done that yet.
Retail is now in a position to really determine what its future is going to look like on the uptick as opposed to being on the down, which has already been occurring for a couple of decades now.
What’s a non-digital thing you own that’s designed really well?
This is so funny. I always evolve how I stay organized, but I’m now on 3×5 cards and just writing out what I need to do. Old-school. I have one for each deal and I keep them in a pile. I tried organizing on my phone and computer, but a pen and a piece of paper, honestly, seem to work every time.
We were talking about ChatGPT in the office and how schools are going to deal with it. Basically, they’ll have to go back to the old blue notebooks and written exams for everything, which won’t be the worst thing in the world, but it’s gonna sort of throw everything back to where you have to actually learn how to write on paper.
What’s your favorite outdoor space?
Going to a ballpark on a Sunday afternoon with your kids is pretty cool. I used to be a beach person, and I’ve sort of evolved to not really care all that much about it.
I think basically anywhere where the sun’s out and it’s a little bit warm is enough for me. Even if it’s simply walking to the office and being on the sunny side of the street. You know, being outside and not being freezing and having the sun sort of on you is about all I need at this point in my life.
Give us a book or music recommendation.
The Alienist by Caleb Carr. I think it is a great genre book about New York City. Mystery, history, psychology, forensics, changing social norms … it captures the turn of the century as well as anything I’ve read.
And how New York has always been filled with psychopaths.
Right. Exactly. There are just more of them now.
What’s your favorite takeout in New York City?
Okay, when I really wanna spend some money on sushi, it’s Sushi of Gari because it’s around the corner.
I grew up in Philadelphia, and when I go back I get a cheesesteak because that’s the best fast food that was ever created. So, I wanna qualify my answer by saying that, really, it’s cheesesteaks. They’re harder to get in NYC.
Do you still have a place to go in Philly for a cheesesteak?
Ok, so, my father used to own Pat’s. Not the one that’s currently open. But there were like 12 of them back when I was a kid, and he owned them. So, my allegiance is always to Pat’s. If I’m bringing in an out-of-towner who’s never had a cheesesteak, I go straight there.
When Pat died, he left the famous 9th street location to his brother, which eventually got passed down to his brother’s son. Pat left his son the naming rights and his son opened up a location in Northeast Philly near my dad’s office. My dad befriended him, eventually bought the rights, and opened locations around Philadelphia and Atlantic City. There was one at 18th and Park here, believe it or not.
This was back in the ’80s. He eventually got bought out right around the time I went to college, but I spent most of my teenage working years flipping cheesesteaks at different Pat’s locations around Philadelphia.