Jodie McLean:

We give people empowerment throughout all of our places to talk to strangers. We were all raised, "Don't talk to strangers." But it's those intersections and those connections that wind up being much more powerful in loyalty back to our places. So ultimately, we're measuring everything in trips and dwell time, and that then rolls up to our retailer sales.

Nancy Lashine:

Hello and thanks for tuning to Real Estate Capital. I'm your host, Nancy Lashine of Park Madison Partners. Capital is a lifeblood of the real estate industry, but the decisions on where and how it's allocated are driven by people and personalities. Who are they? What motivates them? What can we learn from their experiences? On this show, we introduce you to some of the real estate industry's most influential thought leaders and decision makers, and we talk about what is important to them, how they make critical decisions, who has influenced them, and a lot more.

Our guest on this episode is Jodie McLean, CEO of EDENS, one of the largest private owners of open-air retail and mixed-use properties in the country. EDENS has a long history of successfully developing and managing retail properties, stretching back to its founding in 1966. Jodie spent her entire career at EDENS and has played an integral role in the development and evolution of its investment strategy. Throughout her nearly 35-year tenure, she has been responsible for the development, redevelopment, acquisition, and disposition of more than $20 billion in retail assets. She's invested through several market cycles and has been at the forefront of innovation and retail development and management. We discuss Jodie's career, the current state of retail, its evolution over the past two decades, where the firm is seeing opportunities today, and much more.

Jodie, I couldn't be more thrilled to have you on the podcast. You are a force of nature. You're spectacular and really excited to talk with you today about what you've built at EDENS, and your career path, and what's going on in retail today. So let's get started. Welcome to the podcast.

Jodie McLean:

Thank you for having me. I'm excited to be here. I'm excited for the conversation with you, Nancy.

Nancy Lashine:

So I've heard a little bit about your background, but just for our audience, tell us how you ended up at EDENS.

Jodie McLean:

Sure. My background is very simple. I think it fits on a postage stamp. I actually met the founder of EDENS when I was still in college and had put together an independent study on entrepreneurs. It dawned on me that I was getting ready to graduate from the Honors College at the University of South Carolina with a business degree, a finance degree, and I had not really learned how commerce, how business, how does it all happen. I learned about the time value of money, I could do a lot of different financial analysis, but I was really interested in the how. And so we put together this independent study, and Joe was one of the first entrepreneurs I met.

And I was dead set on going back to Chicago where I grew up, and he was very generous in offering me some opportunities. It was 1990, it was a really tough job market in Chicago. And I can remember sitting down with my dad and he said, "You're crazy not to do this for a couple of years. Learn what you can." And it was a very open conversation I had with Joe Edens, who is our founder. I said, "I'm going to commit for two years. That's it. I want to be honest. I want to go back. I want to live in a big city." And so that I really fell into this opportunity. And Joe stayed true to his word. He gave me the first two years I was an analyst, but I really got experience in every single department.

Nancy Lashine:

But Jodie, don't do yourself a disservice. I've heard you talk about how you would show up at the water cooler with him or the coffee pot at 5:00 in the morning. You really made an effort.

Jodie McLean:

No question. I said if I'm going to be here, and I called this sponge chapter of my career, if I was going to be there and this is what I was going to do, I was going to be all in. For the time I was there, I was all in. And I realized very early on that Mr. Edens would show up at 5:00 in the morning at the office. I don't really remember how I figured that out. I just thought he was an early riser. It didn't dawn on me that he was there because Hurricane Hugo had blown through the state and turned about 75% of our assets upside down.

Nancy Lashine:

Goodness.

Jodie McLean:

Revco was our second-largest retailer, had just filed bankruptcy. And the RTC became our largest lender. So Joe had a lot more on his mind than a 22-year-old who everything she owned fit in the back of her hatchback. But I would go in and I would just coincidentally happen to be at the coffee pot the same time he was at 5:15 in the morning. And I just put myself at the intersection of knowledge. At the intersection, we'd start conversations. He'd ask me what I was working on. I'd sort of make up the urgency of these projects, whatever. And he would turn it into moments of mentorship for me, and I would take that in. I think it was a little bit of joy that would take him away from the heavy things that were on his mind.

And from there, that relationship started to be where he would say, "Could you do this for me? Could you do that for me?" And early on, I said yes to everything. And one of the things, this might relate, you might get this Nancy, but I watch a lot of young women who are here now and they sit back and they wait to be tapped on the shoulder or they wait until they feel like they're 110% ready for the next move.

Nancy Lashine:

Gosh, yes. You'll never be 110% ready.

Jodie McLean:

So I took these opportunities and I really just ran with them, whatever they were. And there was nothing that was too big, nothing that was too small for me to take on. And that opportunity led to opportunity.

Nancy Lashine:

Right. I'm curious, just backing up to the part about your dad telling you you should take this opportunity, because I had a similar interaction with my father where he kind of begged me to go do something other than try to be the shore dancer in a dance company that I wanted to join. And I ended up going to business school and that made all the difference. But did you continue? Was your father a mentor for you?

Jodie McLean:

Always.

Nancy Lashine:

And did you continue to be able to rely on him for advice?

Jodie McLean:

My dad and my mother, but my mom's background was in education, she was really the entrepreneur of the family. My mom actually started several schools along the way. But my dad was in business and he was a banker in Chicago. And there was never a time where either one, but in particular my dad, ever put limits on anything for me. And I would call and there was no question I couldn't ask him. There's a point in time where Joe said, "Hey, would you be willing to lead the recap of the company?" I said, "Yeah, sure." I called my dad. I don't even think I knew exactly what that meant.

Nancy Lashine:

I said to him, "What's a recap?"

Jodie McLean:

Yeah. I was a few years out of college, I didn't know exactly. And he was patient, he was kind, but he was also somebody who never saw limits at all in what I could do, and so always played a really important empowering part of who I am today.

Nancy Lashine:

What an incredible role model for you as a parent.

Jodie McLean:

In our family and in my extended family, I have incredible role models. We have incredibly strong women. I have two grandmothers who for different reasons, different points, were single moms at a time that wasn't what was the norm, and used education to persevere, used humor to keep their families moving. I have incredibly strong female. But the men in my life, my family, my extended family were so present, so present, driven. Yeah, I think I have incredible role models in career family. How do you find the balance of all of that?

Nancy Lashine:

Well, very, very fortunate. I also feel fortunate in that regard, but I think as a takeaway for people listening who are parents today, appreciating how much power you have as a parent or as a manager for the people who are around you. Well, is it 30 years now? How many years are you at EDENS?

Jodie McLean:

Plenty. I started in 1990. So shockingly I've been here about 34 years, but I feel like I've had about eight careers during that time.

Nancy Lashine:

Well, yes. And retail has had so many different iterations. So let's talk a little bit about the retail business and how in one of the podcasts you've done previously, I heard you talk about an aha-moment, when was it, broadband became a part of everybody's life. And I think at that moment, you came to appreciate the need for people connecting in places and place-making as a place for people to go and be together as a community. And of course, that's been such an important part of what EDENS is today. Talk a little bit about how you've been able to take these moments in your own personal life and experience and translate them to this incredible business that you've helped to create.

Jodie McLean:

There's no question. 2006, I had a huge radical aha-moment personally, and it was a convergence. If you think about what was happening at that point in time, just now looking back historically between '01 and '08, the new supply in open-air retail every year was about 2.5% of the total stock. So there was more development going on in our sector than any other traditional sector during that time. And it was on fire. And our retailers were primarily public, there was a lot of money going prior to the GFC that was really driving retailer expansion.

In 2006, we were on the verge of looking at doing some really major scale retail, but we were going to come in behind other disciplines. So we were going to come in behind the multifamily, behind the office developers. And we were flying around the world, we were looking at all of these traditional town centers. A lot of them looked the same. No matter where I was, the design, the curation, it all felt very similar.

At that same moment in time, 2006, I found myself as a single mom and my career was just going straight up. And I'd come home at night and we'd sit down and I'd have the cutest little dinner with my son. We'd read books, he'd go to bed, and then I would do this thing. I would dial up, and get online, and you get that, and then I'd get online. And I was thinking ahead and if I needed a new white blouse, I could order it online, it would show up a week or 10 days later at the house. And that was amazing. It was amazing that I could do that.

And I could get online and I could do a lot of the commodity type things that I needed. And I was wowed. And in those moments, it also dawned on me when I was really honest with myself that I was lonely. I was a single mom. My career, that was where I was spending all my time. And the great institutions that so many of us saw our parents involved with, we weren't as involved with, whether that was at school, whether that was church, whether that was even in the parks down the street.

And so I went to work and I thought wow, we are really at a crossroads. And we can be the big mall in the sky because this technology thing is for real. Women were still making 80% that we still are today of all retail decisions. 72% of moms were working outside of the home at this point in time. And this dial-up was going places. There was no question in my mind. I had no idea really where it was going, but we had that.

Nancy Lashine:

You didn't know you were going to carry it in your pocket.

Jodie McLean:

No, I had no idea. Or we could double-down on humanity because there was, even then, I felt inside of myself this isolation, loneliness. And it dawned on me it was the aisles of our Publix, of our stop-and-shops that people were bumping into their neighbors and making connections. And we stopped as an organization. And I like to say I sat Indian-style on home plate, and we stopped for a minute and we read this book called The Good Great Place by Roy Oldenburg. And I had everybody read it. And we put together some really deep-thinking groups and we said, "What does the third place look like?" And do we want to double-down on technology or do we want to double-down on humanity?

And it was that intersection that we also realized if we were going to double-down on humanity, place mattered. And in order to make the bets on place, we were going to have to do some other things differently. And we did take down our debt leverage, we put ourselves in a position, we looked at our balance sheet to get ready to take some risks. We paid down debt, we cleaned up our balance sheet.

Nancy Lashine:

So I'm sorry, so back up a second. So at this point, you're a privately held company.

Jodie McLean:

Yes.

Nancy Lashine:

You're held by how many institutional investors at this point?

Jodie McLean:

At that point in '08, three. We recapped the company in '97 with the State of Michigan Retirement Systems. And in 2000, we brought in alongside of them JPMorgan Strategic Fund and NYSTRS, New York State Teachers.

Nancy Lashine:

And how many of those three are still your investors today?

Jodie McLean:

Two out of the three. In 2013, we recapped out Michigan after about a 16 and a half year partnership with a club investment that Blackstone leads.

Nancy Lashine:

And as you need new equity capital, do you just go back to the well with those three or what have you been doing?

Jodie McLean:

To date, those three have remained extremely supportive of the organization and have provided most all of the growth capital. We've done a few JVs along the way that have been really strategic, but they have remained our three major investors to date.

Nancy Lashine:

Is that something you're thinking about evolving?

Jodie McLean:

Like any good organization, we are routinely having strategic conversations as a group about what's best for the organization. As of today, I will tell you that there is a lot of opportunity for this organization and growing from internal is what makes the most sense today.

Nancy Lashine:

Yeah. We're taping this on November 5th 2024, and Blackstone just made an announcement. So retail is obviously back in favor. It wasn't really in favor 20 years ago. And clearly you talked about doubling down on place, but you also talked about the incredible growth that there'd been in open-air centers. And so how do you actually raise your rents when there's too much supply of space or at least get a decent return on your investment when something else is getting built around the corner? That's not the case today. We've had more than a decade of absolutely or hardly any new development.

Jodie McLean:

So if you talk about from '01 to '08, there was supply that averaged about 2.5% of total stock. If you look at the numbers from '09 coming out of the GFC to '23, that new supply would be about 0.5% of total stock. So we were--

Nancy Lashine:

Talking about in total or per year?

Jodie McLean:

Per year.

Nancy Lashine:

Per year.

Jodie McLean:

Per year. So we went from being the sector that was outpacing all other traditional sectors to all of a sudden being the lowest growth by far sector. You came out of the GFC, a lot of retailers obviously were very hurt, you had the e-commerce explosion that was happening, then we hit COVID. So one thing after another, and there hasn't been any new growth. And during that time, we have seen some, I always said we were under-demolished versus over-retail, but you have seen some of, especially the mall inventory go away and be repositioned. But we'd probably still, if you look at the retail per capita and you compare that to other like-countries, we would still lead in retail per capita. But we've had such a low growth that at this point we're at an all-time occupancy or all-time vacancy low as a sector.

Nancy Lashine:

So how many of the centers that you owned in say 2006 are still in the same locations today and you've just been redeveloping them versus pruning those locations and adding new ones roughly?

Jodie McLean:

That is a great question. I would probably say, I'm going to say 50%, Nancy. And I don't have that number off the top of my head. But if you acquire in really great locations, which is something we've been really focused on location. And location for us means that within a 17-minute trade time, so 17 minutes for the most part, and there's exceptions to all rules, but I'm just going to tell you this is a rule we follow. We have 17 minutes to move you from your chair in your home inside the front door. And emotionally, when people think about going someplace and emotionally it's more than 20-minute travel time, whether that's by foot, mass transit or car, you kind of have this like I think I'll just stay home and watch Netflix versus let me go hop over here and do something.

Nancy Lashine:

Right. And I'm sure it varies by location too.

Jodie McLean:

It varies. But I always-

Nancy Lashine:

As you see the growth in the Northwest in the COVID era, or a market like Denver in the COVID era, and you decide you want to be in those markets, do you have to develop a center today or can you generally acquire something and re-tenant it in a way that it becomes an EDENS quality place?

Jodie McLean:

Generally, we are acquiring and then doing a redevelopment. And that varies by what it looks like for us. Size matters because we really believe that what distinguishes our places is trips and dwell time. And so much trip and dwell time now is driven by common area space that is different than how it's been in the past. 42% of shoppers want to see open spaces with lawns or greens in their centers. And this is an emotional feeling.

And there's enough intellect, the data now to know customers have indicated willingness to pay something 8% to 12% more for goods and services at places with open green spaces. And why is that? I don't think anybody's connecting like, "Oh, I think I'll go to this Publix that happens to have a park in a shopping center versus that one." It's more of an emotional connection of what happens during, it might've been a completely different trip. You might've been there and you spent time in the green with a friend. You met somebody, you ate lunch out there, your kids are playing out in the park. But it's an emotional connection. And once those emotional connections are made, the repeat trips are amazing. And what we watch are trips and dwell time because for every 1% of additional time people spend at our places, we get about 1.3% of additional wallet share.

Nancy Lashine:

Right, right. So how do you think about heterogeneous ... You talk a lot about community. And I am an urban person, you grew up in Chicago, I grew up in New York City, and I think about going anyplace in New York City, it's really heterogeneous. It's just everybody's there. The suburbs tend to be much more homogeneous. So when you pick location and you think about creating these places, how are you thinking about community and the ability to bring different people together?

Jodie McLean:

We think about that a lot. We think about what inclusive prosperity looks like, and inclusive prosperity looks different in different places. But I can tell you without question, our most successful places, if you want to measure them ultimately by sales volume, so you can start wherever you want in getting there, that means you have great trips and dwell time, are those in which there are multi-generational. So more so than any other determining factor are those where multi-generations feel comfortable spending their time.

If we can think, and we think about every one of our centers has very different demographic dynamics. And when we think about that, we think about places where people, we have a saying here, consequential strangers. How can we cause intersection, not just parallel paths of strangers or people of diverse backgrounds, but how can we cause intersections of these consequential strangers? Because that's also where a lot of emotional connections are made.

People actually very much, if you give them the reasons to interact with people who are diverse and different, really like because they receive content for their lives. So that's what they talk about. They don't talk about, "Oh, I was in Publix and I got my favorite peanut butter jar." That's not what they talk about. They're like, "Oh, I was down the street at Publix, and you know what? I met this guy who's an artist and he's doing blah, blah, blah, blah, blah." And they're sharing these stories of the people they met. And the next time they need to run out someplace, they're coming back to our centers because of these emotional connections.

So how do people make that? Maybe they make it in the aisles of the grocery store, but maybe it's the public art. Maybe it is what we call the jewelry. We put a lot of jewelry, benches, chairs, seating areas out in our common areas, and we make them pleasant. We encourage people to sit. And next thing they know, they're sitting next to a stranger and they're having a conversation. We give people empowerment throughout all of our places to talk to strangers. We were all raised, "Don't talk to strangers." But it's those intersections and those connections that wind up being much more powerful in loyalty back to our places. So ultimately, we're measuring everything in trips and dwell time, and that then rolls up to our retailer sales. But we also have an index.

Nancy Lashine:

Sorry, do you collect the retailer sales? Are they required to give it to you?

Jodie McLean:

Yes. In most all of our leases, yes.

Nancy Lashine:

And mostly minimum percentage rents or are you fixed rents or how does it work today?

Jodie McLean:

We're mostly fixed rents. We have an open-air traditionally well over 90-plus percent of your rents will come at fixed rents. But we are more and more seeing percentage rents show up. We're not afraid to put our money where our mouth is. We really believe in a site and you are the right piece to our curation, we figure out how to make that work and offset fixed rents with percentage rents.

Nancy Lashine:

And in terms of just growth as an economic proposition for your owner investors, do you have inflation bumps or are they five-year leases typically? How do people keep up with a return that's commensurate with the risk?

Jodie McLean:

Most of our leases, and it varies on types of leases, but most by number of our leases have annual rent bumps in them, rent steps in them. Most of them are tied to what we think an inflation escalator is. And then anchor leases are typically longer, 15, 20 years, where your shop leases are three, five, sevens. And it really depends on the types.

Nancy Lashine:

And that's where you have your inflation bumps or your productivity bumps, if you will.

Jodie McLean:

Yes, yes.

Nancy Lashine:

Talk to us a little bit about safety and how you make sure, because obviously people will go someplace where they feel safe. And post-COVID, that's even more between safety and homelessness been more of an issue.

Jodie McLean:

I would say safety is one of the number one things on everybody in retail's mind. Because as I said earlier, and it's for everyone, but 80% of retail decisions are made by women. So whether we're showing up ourselves at the cash register or we're sending our husbands, our sons, our boyfriends, we are making those decisions. And guess what? We don't recommend anybody going to places that feel spooky, creepy, don't feel safe. So the number one thing we can do is make you feel good.

And what does that mean when you're at our places? So you have to feel safe. They have to be well lit. They have to feel like the pathways are clean, they're safe. So yes, crime has been on all of our minds coming out of, well, always, but especially coming out of COVID. And working with our local municipalities, a lot of our ICSC and a lot of our other trade organizations have been very active in retail crime, which has been great, but it really does come down to being a local issue. And we do a lot of what we call safety walks with our local municipalities, our local partners, we include our retailers. And we walk our properties together to make sure that there's no place in our properties that don't feel good to ultimately who our ultimate customer is, and that's our community members. And also how we make sure, I hate to say this, but there's prosecution. There are consequences to people's actions.

Nancy Lashine:

There's consequences to behavior, yes.

Jodie McLean:

Yeah, there's consequences to behavior. It's been really important to make sure that our municipal partners understand this.

Nancy Lashine:

Are there locations that you're thinking of selling because you just can't grow them the way you'd like to grow them?

Jodie McLean:

At the end of the day, we fancy ourselves as being very good business people. And if we feel like we have maximized our value, and sure, there are places. We do have this perspective of long-term ownership. And so if we are picking right locations, we should have the ability to reposition every, I don't know if it's seven to 11 years, it really depends on where we are, but you're a reflection of society and you have to keep up with those trends. But there are markets and there are places where we absolutely have maximized the value and it's time for somebody else to appreciate those assets.

Nancy Lashine:

Yeah, yeah. Having been watching this business for over 30 years, it is shocking to go look at markets and think how different some are than others. And some have just exploded. And are there any markets that you've recently added a property in that are outperforming what your expectations were that you want to share with us?

Jodie McLean:

Well, I don't want to send everybody to these great markets, but yeah, I would say the trends we've seen are not too dissimilar than the trends everybody's talking about. We are very much head down, following talent. Where does talent want to live? Where's job growth? That typically to where's quality of life. Quality of life is matched with cost of living in a lot of areas. But we have a whole retail index that we update every six months that really look deep into these things and into those markets.

And we're missing some markets, Nancy, because for us in retail, you have to have also efficiency of operations. It's really hard for us to go to Minneapolis just by way of example, which shows up on paper as being a great market to be in, or maybe a Columbus, Ohio that's starting to show up where you only have one center. Because we are a hands-on business in retail. I would love to think I could run our whole portfolio sitting in my office in Washington DC. Can't be done. Can't be done.

You have to not only know the markets, which we can understand through data, et cetera, but once you get into market, you have to understand the submarkets. And once you get to the right submarket, you truly have to understand the right corner to be on. So you have to have that depth of understanding. And then you have to understand the community. There's a lot of similarities in humanity, but each community is unique. So unless we can have efficiency of operations and have people on the ground and that makes sense, it's really hard for us. So depth of market is also important as we think about that.

Nancy Lashine:

What are you finding in terms of attracting the right tenants? One of the things that we've heard is rents are pretty good, but TIs are sort of killing landlords because tenants, you really demand a full build out. And once you factored in the tenant improvement cost, it's a long payback period.

Jodie McLean:

We look at everything. I think our saying here now is net, net, net effective rents. So we're looking at TI, we're looking at downtime. Because this is another thing is especially coming out of the pandemic, the extended time to permitting is almost unreasonable and a lot of the municipalities in which we're working in. So you really have to look at your downtime. You have to look at your cost of capital. Capital is not like it used to be. It's not at 1% and 2%. It's much more expensive these days. So what does that look like?

And unless you can drive rent, right now survey has come out that said really looking at construction costs across the industry for new development, so this is not what you asked, but looking at new development, you'd have to increase rents close to 35% to make it where the risk and the yields in new development with construction costs, et cetera, makes sense. So I don't see a lot of new growth in the horizon from ground up. And it really makes it, you really have to think about do I keep the retailer we have in place or do I replace this retailer because of those costs?

Nancy Lashine:

Right. One of the other things that we're hearing is retailers saying they like to take the adjacent land and build multifamily or bring in a partner to build the multifamily, because obviously it drives a lot more people to your center and creates more of a place. Are you seeing that in your business as well?

Jodie McLean:

Sure. We have done a lot of mixed-use, really starting, I guess the first large mixed-use project we opened was in '08. And since then, I think we have at our places developed somewhere around 8,000 residential units and have close to that same number in a pipeline at our places. And mixed-use, number one, we find that's where a lot of retailers want to be. But the retailers want to be there because that's where consumers want to be and they want to spend their time.

And there is no mixed-use project that EDENS has been involved with where the on-site residential can drive successful retail. It does drive a great sense of place. It does drive a place that feels good, people want to spend their time. But it has to be done in a way where probably 75% to 80% of your visitors are coming from outside of that place. So it's still got to drive destination. It still has to be developed, designed, laid out in a way where it's really attractive to the much broader community to spend time there. But typically in a mixed-use place, you have the ability to do that because you have more space, you have more land, you can develop things.

So yes, mixed-use is very much a part of what we're doing. If we can do a horizontal versus a vertical mixed-use, it's all the better. The buildings are not quite as complicated, but we are doing both.

Nancy Lashine:

Right, right. When you think about EDENS and the future of EDENS, what are the things or is there anything that keeps you up at night in terms of trends or things that you could see changing that are very hard to plan for?

Jodie McLean:

The only thing that makes me nervous is status quo because that's the only thing in retail that is proven over and over again to cause failure. So retail is nothing more than a reflection of society and societal changes. So our job, and EDENS has made the decision back in '06, we made the decision that we were going to double-down on humanity. So that means we're not going to turn our back on technology. We certainly believe that e-commerce, and I've always said this, is our partner not our foe. And our retail partners are going to be most successful, those that have what we call omni-channel, that are active in both brick and mortar, online, catalog sales. But the one thing you have to stay, and we try to be students of, is societal trends and changes and how people want to spend their time.

So going into COVID, we knew that we needed to act like the living room of our communities, that our people were desperate for us to fill the voids that had previously been filled by, I said this earlier, churches, the parent-teacher organizations. We needed to fill that void. Coming out of COVID, we needed to understand this mix of still being the living room, hyper convenience for people who wanted to maybe not have as much social interaction, but also understand the societal changes of work from home.

So it used to be that we were prepared for the weekend, starting Friday through Sunday were just peak, and then the rest of the week. Now what we're seeing is people are in the gym at 2:00 on a Tuesday. And we're seeing this flattening out, so what does that mean at our places? What does that mean? How should our places look different? How should we act different?

People talk about the demise of the department store. This is part of what we've always seen retailers come and go. That's not new. If you looked at the list of retailers when you started in this industry to where you were 10 years, 20 years later. But what does that new department store look like? And it looks radically different, but it's coming back. Target is a new department store. Walmart is a new department store. Well, what does that mean? What does that look like? How does the consumer want their goods delivered to them? This is complicated for us that buy online, pick up in store at the same place that's got to be hyper convenient for that, and you and your husband go for date night and feel good and stroll. And the same place you're going to come back with your 13-year-old tweener girls on a Saturday afternoon to meet their friends. How do we make this place feel good for everybody?

Nancy Lashine:

That's such a fun challenge. I can see why it's just so exciting, because it really is about following people and what people want today. So tell us a little bit of the Jodie secrets. Because you are, you're just a phenomenon. You have so many different constituencies that as CEO of EDENS you have to serve. You have your, well, I guess you call them retail partners, not tenants. You have the government-

Jodie McLean:

That's right. Thank you. They are our partners.

Nancy Lashine:

You have the employees and the partners of your firm. You have your investors, your financial investors, both equity and debt. You have the governmental entities that you need to work with so that you can redevelop the projects that you have. And just these many, many constituencies all needing something from the organization, how do you think about juggling all of that and creating a culture which you've obviously done over decades that is successful in managing this well?

Jodie McLean:

There's two things I would say. And the first I would say is what you've heard me say two or three times, we've doubled-down on humanity. So we really believe in humanity and the power of connection. That's number one. Number two, we really believe in our word is as good as any written document. And over time, reputationally that has served us extremely well. It's created incredible relationships with municipalities, with lenders, with capital providers, with retail partners.

But I would also say that we know it is our privilege, and we have been given a huge opportunity to remain private with incredible investor partners. And we know every day we have to come to work to outperform. And I think that what we've done is we've built a culture that's purpose-driven. We have a singular purpose based on two very simple words, enrich community. And we believe we community by driving human connections at our places. That's why the trips, the dwell time, the consequential strangers.

And if we stay true to our purpose and we put that first and foremost in everything we do, then we will outperform trips and dwell time. It is only trips and dwell time that help us outperform retailer sales. It is because our retailers can outperform that we can continue to drive the financial metrics that allow us to outperform for our investors. And all of this starts and finishes with this culture based on a rich community. We use Gallup to do our employee surveys. Our employees are engaged 93% to 95% in our purpose and mission as an organization. And that engagement shows up at our places, it shows up throughout everything we do. Engaged employees, they would tell you they work harder than anybody else. They do it with a lot of joy in their heart. But ultimately then, a rich community shows up in all these other places.

And we also have an internal index where we measure health, education, opportunity, and crime around all of our places. And can we really measure not only are sales higher than anywhere else, but is the behavior, do we take some little bit of ownership. The behavior in and around our places is driven because people in our communities feel part of something much larger than themselves, and therefore it shows up in how they take care of themselves. It shows up in how they take care of their community and their actions. And all of this for us adds up into this recipe of engaged employees, drive our places, our places drive trips and dwell time, trips and dwell time drive total shareholder return, and it comes back then to community engagement.

Nancy Lashine:

Well, that's really aspirational, Jodie. That's amazing.

Jodie McLean:

It's aspirational and over, I think we've proven it out with these long-term institutional relationships.

Nancy Lashine:

That's huge. It's crazy. I mean, it's so unusual. It's hard to come up with a corollary for what you've been able to create and maintain over a long period of time. I want to switch gears for a minute, the few minutes that we have left, and just ask about some of the board work that you do and some of your other activities. Do I understand correctly you're chairman of the Richmond Fed?

Jodie McLean:

I am for about 45 more days.

Nancy Lashine:

Okay.

Jodie McLean:

I am chair of the Richmond Fed. I will do one last year on the Fed, but I have been chair for the last two and a half years. And love, I really feel like it's one of the biggest honors I've had is to be a part of the Federal Reserve.

Nancy Lashine:

So what is your role as chair of the Richmond Fed?

Jodie McLean:

Well, we actually do have a governance role for the Richmond Fed. The Richmond Fed is the fifth district. We go from most all of West Virginia, Maryland, DC, Virginia, North Carolina, and South Carolina. So there is a governance role. But we also give incredible input to our president, Tom Barkin. About every six weeks, we have roundtable discussions so that the Federal Reserve really gets real-time data and information from a very broad sector of the economy to really understand, I think without question the Fed is data-driven, but I think they also understand intuitively there's a lag in the data.

So what is this real-time information? What are the indicators they may be missing? When you get a peek at all of that, I have so much respect for this institution and how they make decisions. I really believe in the Fed and the work that they're doing. But it's also an ability to be an ambassador for the Fed, to make sure our president does incredible amount of work to be out in the community, and how do we make sure that he has the opportunity to meet with as many different business people as possible, as routinely. So to me, this is one of the work that I've gotten to do that I've really enjoyed most.

Nancy Lashine:

Yeah, it sounds phenomenal. Very exciting.

Jodie McLean:

It's been.

Nancy Lashine:

And what have you learned from being on the board of a public brokerage firm?

Jodie McLean:

This is my second public company. I think number one, it's just been growing up in a private company and really understanding the difference between how a private and a public works for me has been very instructional, very helpful. I think it has brought me to think about how we're making decisions.

So I think public companies are driven by slightly different metrics. We are driven by very long-term metrics, so really helpful in how we think about metrics. But being on a public company brokerage global has really also helped me think about global trends, what's happening globally, how you balance that. Insights, incredible insights to all sectors of our business, and thinking about balance sheet work. But also, I think that we bring them a lot of thoughts about culture, how you drive a business, how you drive best results. So that has been, I have loved the work I've gotten to do on public companies.

Nancy Lashine:

Yeah, I just don't know when you sleep.

Jodie McLean:

Well, I also in this life have been blessed with the opportunity to have a family. And so as our kids, there was a point in time where we had four kids at home and that was working full time. And as they have all moved on in their own lives, and I hate to admit that any of them have flown the coop, but as they have moved out of the house.

Nancy Lashine:

You want them to fly the coop. It's a good thing.

Jodie McLean:

Yeah, I do. I do want them, and I'm very proud of them, and they're independent and great. But it has opened up, it has opened up my time to be able to do more and more. And that is one of the things I suggest to a lot of younger people, and especially a lot of women, is that you can't do everything you want to do, you just can't do it at the same time. And there will be chapter chapters to your life. And I carry around with me a article of my grandmother who hit a hole in one at the age of 72. And when she did, and I was a young girl, she said to me, she said, "Let this be a life lesson to you, that you can do everything you want. There will just be chapters to your life." And I think about that all the time.

Nancy Lashine:

I do too. Gail Sheehy wrote a book called Passages, and that has stuck with me for a long time. Is there anything you want to share with our listeners about someone who's been a great influence in your life?

Jodie McLean:

I have been blessed to be in networks of some incredible women who have been huge influences in my life, in our industry. There have been women entrepreneurs who have challenged me to think bigger, who have challenged me to take on more. And I've been blessed to have great male role models in my life as well, who have challenged me to also think differently than I have. So I don't know if I want to single out anybody, but what I would say is mentorship is a two-way street. And I have been mentored, I have had the opportunity to be mentee, mentor. I've learned from all. And I think also those evolve and it's okay to let those relationships evolve. And as you get older, you find that your mentors also seem to change over time.

Nancy Lashine:

For sure, for sure. Jodie, it's such a pleasure to talk with you. You have so many pearls of wisdom. We could keep going, but I know you have a busy schedule. So I thank you very much for your time.

Jodie McLean:

Thank you.

Nancy Lashine:

I hope you enjoyed this episode of Real Estate Capital. Before you go, I have a quick favor to ask. We put a lot of thought and effort into this show and making sure we bring you insights from real estate leaders that you don't normally find in the mainstream media. So if you're enjoying this show, please remember to follow it on your favorite podcasting app so you never miss an episode. We'd also love for you to share it with others or give us a review on Apple Podcasts so others can find us. Thanks again for tuning in. For more information about our firm, please visit our website at parkmadisonpartners.com.