Sitting Down With The President
Updated: Sep 1, 2022
Wow. What a whirlwind start to 2020! As we approach the end of the second quarter, I sat down with Brian Sullivan, the President of Precision Global Corporation, to get an update in his words on how projects at the company have been progressing in the wake of uncertainty during a global pandemic. One thing is clear: P.G.C. and its partners have made the best of an uneasy time, taking full advantage of a fluctuating economy with the help of esteemed, experienced associates and developmental industry partnered groups including AAA, Tapestry, and Blacklock Partners. Brian has always strived to be two steps ahead, aiming to be at the best place at the best time with the best possible people at his side. Fortuitously, he had the wherewithal to begin exploring the excitement and limitless potential of the self-storage industry long before the impeding economic downswing, something that fortunately affects the business in a beneficial and profitable way, unlike other commercial real estate properties. Since we know that when the economy shifts downward, the demand for self-storage increases, P.G.C. expects profits to increase substantially during this time. Working with industry partner groups with years of experience ensures that possibility.
Nicole: "So, what sets Precision Global apart from other Venture Capital Companies? I know that the intent of a venture capital company is to help emerging companies with raising capital for developmental goals, products, and real estate, but what makes P.G.C. different?"
Brian: “[The difference is] we are not a transactional company; we don’t just start and complete one project and move on to the next as soon as it’s completed. We’re a relationship company. Our main objective at Precision Global is to build a rapport with partners continuously, establishing a foundation on trust and experience that develops and grows not just with every deal but every day into a mutually beneficial relationship.”
If your focus is building new relationships and rapport, why not work with start-ups?
“I learned long ago that even though you can make a lot of money working with start-ups, and the potential can be greater with a start-up, you also have a greater potential of it failing. Since it’s not just my money on the line, I have to make sure that I protect my partners money. Because of that risk, I don’t deal with start-ups. Our focus is to work with experienced industry partners.”
So, working with experienced industry groups eliminates start-up risk?
“Correct. As an example, our senior housing group, Tapestry out of Minneapolis, is a fifty-year-old company. We have a good partnership with them because we take the financial backing portion of any development off their plate, which allows them to focus on the construction and the operations of their facilities. We have the wherewithal and the structure to handle partners and their investments on a regular basis, because that’s what we do. The same goes for our Storage partnership with AAA out of Austin. They have been in the business for thirty years now. They’ve done over 100 properties and have returned almost 100 million in profit to their partners in that time from the sale of those properties alone; that doesn’t include what those partners made off the net operating income as well. We want to work with groups like that, because it’s not always about increasing your portfolio, it’s about protecting your portfolio, protecting your asset.”
Can you comment on who we’ve been working with directly this year from those groups: their accreditation and affiliation?
“A great partner is John Muhich, the President and owner of AAA. He actually has a very interesting background.”
After retiring from IBM as an engineer with over 50 patents accredited to his career, Muhich created the company one facility at a time, building on his reputation for the last 30 years.
“He is an extremely knowledgeable, analytical guy, great with crunching numbers. He truly understands how to put a project together to make it profitable. The reason I feel so comfortable with him, and the reason that we have people reach out to us knowing we can help them build a facility, is because of his experience. Anybody with the ability to finance a storage facility can build one. They can hire people to create and operate it, but how efficiently are they going to do so? It’s John’s lengthy experience in the industry that makes him so successful."
You’ve also been working with JD Blacklock, correct? He has also been in the storage game for some time.
“JD Blacklock from Blacklock Partners is the current Vice President of the Self-Storage Association of Texas and has 16 years in his field. Again, that’s why we partnered with him for development: experience. He is soon to be elected President and has been handling our Fort Worth opportunity zone as well as our latest Granbury deal.”
You mentioned Fort Worth being an opportunity zone. What is an opportunity zone exactly?
“We’ve been fortunate enough to get permission to build in some state and county mandated opportunity zones that essentially enrich the development of growing areas. Not only do these new developments benefit the area itself through this growth, but in return for developing, anyone of ownership, which includes our partners, is given tax credits similar to a 1031 exchange, which saves a ton of money off of capital gains. This means if P.G.C. owns something, our partners own it. Likewise, if we’re entitled to tax credits, they are as well.”
Speaking of the Granbury deal, can we talk about other up and coming and completed projects? 1826 was funded this week despite the obstacles that the Covid-19 pandemic has brought the country, right?
“Yes. Our 1826 project is a storage facility in Austin that was funded this week. I think mainly that’s because of the industry that we’re in. Storage is one of those industries that when the economy is good, storage is good. But, more so, when the economy starts to falter and we see people downsize, storage has a tendency to lease up even faster.”
What about the Highway 52 project in Florida?
“That’s located near a stretch of main highway in the greater Tampa area between Tampa and San Antonio. It has a saturation rate of zero in three miles and saturation rate of 2.9 in a five-mile radius even after our facility is built, which is a perfect scenario for us as they are currently building a neighborhood there.”
What other future endeavors are you looking forward to this fall?
“We’re hoping to start our first VA transitional housing. It’s essentially a hotel for homeless vets that assists them with counseling, online school, and housing for a defined period of time. We want to provide any help necessary to help these veterans transition from homeless to eventual homeownership. There’s an opportunity zone in Atlanta that Tapestry is entertaining operating for us similar to their assisted living facilities that we have partnered with them in the past. They have also built VA facilities in the past. We might not even have an opportunity to bring this to our partners, because the demand to partner in this type of project is so high due to the motivational goodwill and sentiment attached to it.”
To sum it up, at Precision Global, partnering with industry groups with experience means protecting assets and lowering risk. Especially in times of economic shift, as demonstrated by the Covid-19 pandemic, P.G.C. wants to work with and partner with people who have seen it all, the good and the bad. That way when, not if, something happens, they have the knowledge to handle the situation with understanding and intention rather than panic or question of ability. They want to know that the people running our projects have withstood fluctuations of the economy, the influences of political changes, regulation dynamics over time, and they can work through these waves.
“We have enough of a following right now that our partners trust us and have faith in our abilities. I take that to heart because it took a lot of work to build that trust. It’s something that we work at every day. I need to make sure I’m putting them in the best possible product that I can, with the best possible operator that I can.” - Brian Sullivan