Welcome to the Beyond Page One podcast, where host Mickey delves deep behind the cover of entrepreneurship with insightful interviews and discussions. Join us as we uncover the secrets to success and explore the journeys of Kurt E. Schlachter, from Stringam LLC. From law and real estate investment to community involvement and leadership, each episode offers valuable insights, strategies, and inspiration for aspiring entrepreneurs and professionals. Discover the secrets to success, the importance of adaptability, and the power of diversification in building a thriving business. Whether you’re a seasoned entrepreneur or an aspiring professional, this episode offers practical advice and inspiration to help you navigate the ever-changing landscape of business. Tune in to go beyond the surface and discover what it takes to thrive in the world of business.

Spotify: https://open.spotify.com/episode/0lNLFCEgQpuYTvvhgR0LfM?si=Xt02x6BjRLKDa98Ye_Bnmg

Apple Podcast: https://podcasts.apple.com/in/podcast/the-journey-to-success-strategies-for-growth/id1734621258?i=1000651569029

• Perseverance is crucial for success in any field, especially in law and private practice.
• Innovation, creativity, and risk appetite are key factors for business success.
• When evaluating potential acquisition targets, consider cultural fit, community alignment, and financial viability.
• Mitigating risk involves managing brand reputation, ensuring a fit in mergers and acquisitions, and making prudent financial decisions.
• Community involvement and support for charitable causes can have a positive impact on reputation and contribute to personal and professional growth.
• Property acquisitions require strategic decision-making, patience, and a focus on value creation. A law degree is powerful and provides knowledge and insight into various aspects of life. It can help individuals understand their rights and stand up for themselves.
• Private practice in law requires hard work and resilience. It can be rewarding and provide opportunities to help people and earn a good living.
• Diversification is key in both business and life. Surrounding oneself with diverse perspectives and exploring different opportunities can lead to better results and personal growth.
• Contributing to the community in a meaningful way is important and rewarding. It doesn’t have to be monetary but can involve volunteering or using one’s skills to make a positive impact.

Mickey (00:02.494)

All right, hello everyone. Welcome to Beyond Page One podcast where we dive deep behind the cover of entrepreneurship and try to uncover the what’s and why’s behind a business’s success and the people in the business. Today I’d like to welcome Kurt to the podcast from Stringam LLC. Kurt has an extensive background in law and private commercial real estate investment. He was the president and board chair of economic development in Lethbridge. Kurt is doing all that and more.

Mickey (00:31.426)

He also supports several charitable causes. Man, Kurt, I’m excited to have you today. Is there something that you don’t do?

Kurt E. Schlachter, KC (00:40.98)

Well, I’m excited to be here to answer your question. Probably sleep. I could use more of it on any given day, but otherwise, there’s not a lot that I don’t do.

Mickey (00:51.746)

It’s awesome. You’re a very experienced lawyer in the country, with various achievements and recognitions to your name. I’m sure the journey was not as easy as it all seems, you know, the glitz and the glam. What was the one thing that always kept you going?

Kurt E. Schlachter, KC (01:10.575)

The sort of mindset that you should never give up, right? I think that people and younger generations as they’re finding their way, I believe struggle with this a lot, that it isn’t easy to be successful and to get where you envision yourself going. And sometimes it feels a lot easier to just throw your hands up and give up. And I think a lot of people do that in any number of contexts, but in my profession, it happens quite frequently. We have a high attrition rate for sure because it isn’t for everyone.

Once they get into it and realize how difficult practicing law, especially in private practice, can be, I think that’s unfortunate because I think if they just stuck it out a little bit longer, they would hit their stride and find the confidence they need and start building to where they can then continue and feel a lot more grounded. So I just always took the position that I knew where I wanted to be generally and I wasn’t prepared to give up without a big fight. And I haven’t given up on anything major yet, so here we are.

Mickey (02:19.943)

That’s awesome. Well, that’s how you ended up here, right? Trying something new. If you were to pick a factor that led to Stringam’s success, what would that be?

Kurt E. Schlachter, KC (02:33.951)

Innovation, creativity, appetite for risk, you know, preparedness to think outside the box, especially in our profession, which is not necessarily known for that.

Mickey (02:47.926)

Yeah, that’s a great answer. Growth strategy seems to involve a blend of organic expansion and strategic mergers and acquisitions, right? How do you evaluate potential acquisition targets and ensure that they kind of align with your strategic objectives?

Kurt E. Schlachter, KC (03:07.483)

A few different ways so we look, you know, everything starts with the people and the fit so our culture is really important to us and that includes our core values which we’ve adopted as a firm and directly hold ourselves accountable to. This is a new development in the sense that when I took on the role of a lawyer, I was able to do that at the role beginning of last year, we defined our culture and started trying to define what our culture is and what our core values are so that we can then start living them because we all kind of knew what it was, but it hadn’t been committed to writing, right, and to words and actions. And so We first look for that and I think if you don’t have people that fit within the broader, you know firm culture You’re gonna have a tough time with M&A because what we do is so people-driven, right? It’s a people-driven services industry We don’t manufacture widgets or sell some other product. It is People working together to deliver a service to other people So you have to have that fit in that mesh and if the people on the inside are clear, you know, some collision and some conflict is healthy in my opinion, but, and as is diversity, if you’re too homogenous, you’re not going to have the diversity of thought and perspective that leads to the best strategy and the best outcomes, both for your business and for your clients, right? So ultimately we start by looking at how the people we’re interested in approach it, and then we look at the communities because we care about our communities, and we choose to be part of them. We don’t believe in just being there and taking from the communities. We view ourselves as partners and we look for relationships and alignments. 

So we look at that as well. And then of course the next step, if we overcome those two things, is to look at the money side of it, the financial side. Does it make sense for us? Is it a solid business when we’ve seen behind the curtain that there is a solid practice that they’re operating? And is there an upside for us to join forces, often there is, right? And that’s the big part of the value proposition for us is looking for those fits to then move forward together with and turn what we’re currently doing into something greater than it already is.

Mickey (05:36.406)

Yeah, that’s, I like that answer because oftentimes when you think of it, it’s really, it’s like, okay, like how much money are they making? What’s the profit margin? Okay, great. Good business fit. Awesome. But there’s so much more to it than just the money side, right? And you kind of went over a lot of those aspects. Risk management is a crucial aspect of any business strategy. Can you provide some insight into how you assess and mitigate risk while pursuing growth?

Kurt E. Schlachter, KC (06:06.279)

Yeah, so we look at a whole number of things, and our firm is, because we are still evolving, right? We’re shifting now into a corporate structure and growth-driven model, but we’ve come from, you know, being a smaller firm and smaller firms in smaller communities joining forces together. So we’re still developing some of those pieces, but we recognize that we need to develop a formal enterprise risk management structure, which is in process. So you know, at this point, we don’t have a formal, say ERM dashboard that you might see in some of the really big organizations, but we’re moving towards that.

In the meantime, we look at risk from a brand and reputation perspective, because that is huge. So if you don’t have a good reputation as a lawyer or a law firm, there can be no greater damage to you, because that will spread like wildfire, and you’ll lose business as a result of it. So we start there. And then risk from an M&A perspective comes back to your earlier question of, if there’s not a fit and this merger falls apart, because of it, that is why I started there. It’s really because of the risk, the underlying risk, right? That’s the biggest one is if the people don’t fit. You have this great, shiny announcement that you’re moving forward together and it turns out you’re not actually working together and it spins apart. You are better off not doing it in the first place. And often you know that. You know in your gut if you are skilled and experienced in this area or not and sometimes people push too hard because they see you know the value proposition on the financial side but fail to look at actually, there’s a huge risk if this doesn’t work out and the people pull apart and then otherwise, you know, standard things. Are we making prudent financial decisions, right? You know, are we keeping an eye on our revenue and expenses and how they interplay? Are we planning strategically for that? Are we investing in the growth model we say we want to have? And that takes infrastructure to support, right? So all of those types of decisions. And then, you know, from everything, from how we balance our physical space to IT.

You know IT is another huge area of risk nowadays. So we’ve done a lot of enhancements there to ensure you know greater protection as we grow and become a bigger target and then physical space you know, we’ve done we’ve analyzed do we do we want to be owners or do we want to be tenants and currently we have a mix of both although typically we We tend to own our major spaces. So the office I’m sitting in currently that you see behind you is our Lethbridge office which is not the first office that our firm has owned but it’s the first that we built from scratch. We designed, built, and built tailored to our needs and have owned it. We’ve been in this space for 10 years now very successfully and we are, and we’ve done a similar project in our medicine office and currently building in the Grand Prairie region right now looking to move into our new office there later this year.

Kurt E. Schlachter, KC (09:36.411)

It makes a fun little side branch of the business. And it’s a great investment or has turned out to be a great investment for us to this point. But it’s fun to have to get into the elements of the design and other things that some of us are into and people are, our owners can participate to the extent they’re interested in doing. We don’t force them to, but if you wanna have input, here’s the meeting, come show up. Let’s talk about the colors, right? If not, I’m gonna pick them for you and you can’t complain later. 

Mickey (10:08.787)

Yeah. Fair enough. What’s, for our listeners, can you give us an idea of the size of the team that you’re kind of working with?

Kurt E. Schlachter, KC (10:18.128)

So a total of about 165 people in the firm currently. We vary, you know, people come and go obviously, especially now. It’s more so than we’ve ever seen, but lawyers, lawyers, and student count hovers in and around 50. That’s about to change because we have some mergers that are coming online soon. One has been announced in our sort of current region in southeastern Saskatchewan. Another that I can’t tell you about yet, but it’ll be announced soon. So, but the current footprint is about that and within that, so 50-ish lawyers. Currently, we have 18 partners. So, there is a, of which I am one. And then we have an executive complement as well. And then the rest of the team is support staff from various capacities, from legal assistants, and paralegals, to our finance and tech functions. Cool.

Mickey (11:21.166)

Was there a point that you saw exponential growth at where it was like, okay, it’s getting uncomfortable, it’s moving quickly? When did that all happen? Because getting it to 165 people doesn’t happen overnight.

Kurt E. Schlachter, KC (11:33.115)

No, I don’t think there was ever. I think some people felt that heartburn. I was never one of them because I was always wanting to do what we’re doing now a lot faster than how we did it. But we needed to make some changes structurally and internally to facilitate that because what we were running into was too many smart, talented lawyers who had strong opinions trying to weigh into every decision on the management side of the business, which is a really important side of the business.

Kurt E. Schlachter, KC (12:06.549)

what would end up happening is it wasn’t always essential. There wasn’t always a value-added. As much as you want to engage everyone and get input, sometimes it can become a distraction and then we would have people bogged down in minor decisions taking them away from where they need to be, which is practicing law, serving the clients, doing what we do, right? So I’m glad we were able to get to that point and facilitate me to now go forward with the vision that I’ve kind of had in the last couple of years, especially since last January when I formally became CEO of the firm under our new structure. I think we probably will start seeing some of that exponential growth because what’s interesting is people are hearing about our story organically and approaching us without us even trying to reach them and that’s great to see because it means that our reputation is solid. People are hearing about us and want to be part of it.

Mickey (13:10.956)

That’s awesome. Yeah, so I mean, too many cooks in the kitchen, as the saying says, right? The saying goes.

Kurt E. Schlachter, KC (13:16.651)

For sure, yeah. And so just to clarify that, what we’ve done now is, you know, myself, I have brought authority over operational decisions for the firm and for our holding corporation that owns the real estate that I was mentioning earlier. I have an executive team that reports to me that handles all different parts of that from marketing to finance to IT to the people side of things. And then there’s a board that I’m accountable to as CEO for the, you know, they oversee the strategy pieces of the firm policy development and so on to give me and my team the parameters in which to do our work. So it works well in the sense of you know accountability to the owners is built in right so the partners elect the board who then you know oversees the management function from a governance perspective and then appoint someone like me to do what I do and select my team to do what we do. So there are checks and balances built within where people engage and access information, it’s just that not everyone in the same conversation in real-time at once has to vote and agree on every decision.

Mickey (14:31.067)

Yeah, no that makes sense. I have, I kind of found something cool about you, the Lethbridge’s top 40 under 40. Tell me about that, I’m sure, you know, getting that recognition, or how did getting that recognition influence your approach to leadership and community involvement?

Kurt E. Schlachter, KC (14:48.795)

Yeah, that was a minute ago. It was a while ago that I was under 40. I guess not that long ago, but it was a while. It was good. I was honored by the recognition and that was a fairly new program that they had done at the time. I was in the first cohort of people who received it. And so it was a cool recognition. At the time I had been kind of emerging as a community leader.

Kurt E. Schlachter, KC (15:18.749)

Honor had been chairing the Board of Economic Development at that point and had moved up into part of our evolution as a firm. We created my prior role as a regional, what we call a regional managing partner. So I had operational, like management, operational oversight for the region that I was in. And then we were all part of what we call the management committee, which was formed from those in our roles plus our managing partner who had a certain scope of authority around management decisions for the whole firm a different version of what we have now, a lot less robust, a lot less authority than I now have. And so I view it as kind of part of the necessary evolution to get where we are now. But I had emerged up into that role as somebody, you know, at that point I was probably about 35, you know, so still relatively young to be successful in private practice doing what I was doing. I’ll just have those other roles and then be, you know, selected those were elected roles so my partners at the time elected me to take on that role and lead this region which was at that point our almost brand-new building and our biggest office and you know so a lot of responsibility so I think you know those things all kind of played and then people on the selection committee would have had the opportunity to work with me Lethbridge is a smaller center so that we would have had collisions in professional contexts or board work or other things and the economic development was a good one in the sense that we had, you know, made up of a huge cross-section of the community deliberately, so I got to meet all sorts of great people from business to, you know, the academic institutions and everything in between.

Kurt E. Schlachter, KC (17:07.067)

Right now we’re about 120,000. Somewhere in there, it’s the third-biggest city in Alberta. Quite a bit of a difference between Calgary and Edmonton and Lethbridge obviously, but we are, at one point Red Deer was a larger center than us, but we’ve ticked ahead of them in population over the last couple of years and are now the third largest. And then within that, there’s a greater service area, the city serves about 300,000 or so that the city draws in from smaller outlying communities.

Mickey (17:07.565)

How big is Lethbridge? What’s the population size?

Mickey (17:43.095)

I have a question, but I’ll say it’s separate from this. I’ll say it for later. But you do a lot of, you support a lot of charitable causes, particularly in the realm of education and inclusivity. What drives your commitment to support all of this? And kind of give us a little bit of a background on that.

Kurt E. Schlachter, KC (17:59.603)

Sure, I think it comes back to practicing what I preach. I mentioned earlier that our firm believes in being part of the communities we’re in, contributing, and giving back in the ways we can. And that’s any number of things from giving your time, which for lawyers is a commodity, or if you have the means to do it, to give money. I’ve always done a combination of both, and I tried to align myself with certain things that were areas of interest for me. So it started with smaller community organizations the business development, business redevelopment zone, community foundation, and economic development was a bigger one and then that kind of evolved into the role that I had as chair of the board of governors at the University which I did for six years which was a massive job commitment but an incredibly transformational experience that I think you know has culminated several things since and frankly think really helped me in this role that I have now with our firm to have that other perspective from governance and that also actually kind of motivated me to obtain my ICD designation and learn even more about corporate governance and to bring that skill set to the role because it was a big job right we’re talking about a billion dollars the prize that has a $250 million operating budget and 3,000 employees and, you know, or sorry, closer to 2,000, but still a lot, right, and a lot of moving parts and political pieces and it was pretty incredible. So that was transformational. 

But all the way along, education has been really important to me and so I learned through the course of that work that the university had a matching campaign finishing a matching campaign where they would match funds donors provided for students scholarships and bursaries and so essentially you double the impact of your gift and it’s something that I’ve been thinking about for my partner I’ve been thinking about for years doing something we just didn’t know quite what that was going to be was it going to be you know a gift VR estate one day was it going to be something different and then we got thinking about this campaign and realized, no, we want to have an impact, first of all, while we’re still living, so we can see that and actually take part in it and feel good about what we’ve done. And secondly, we wanted to help people like us. 

So, we both grew up as LGBTQ-plus people in small towns and Alberta and rural egg backgrounds and when part of who we are, like we’re proud of those backgrounds. They gave us a lot. We both come from really loving, supportive families, which not everyone says is right but we also there’s something about growing up in that background that gives you grit that other people don’t necessarily have and also but we recognize that comes with barriers and that we’re not our experience isn’t the same as everyone and fact, quite the opposite and people like us have really struggled to get beyond those circumstances and we both recognize and I say this very openly my life now as it is not possible without my education and we both feel very strongly about that and the UofL for both of us is, you know, it was the foundation for everything else, right? 

I couldn’t have gone on to law school to become, you know, the business person that I am today without those educational pieces and I’m grateful, very grateful for the legal education too but the UofL was the start. Getting me out of my small town, getting me thinking differently about everything, exposing me to collisions with people with different backgrounds that meet diversity of perspective and thought, right? And then eventually helping me become comfortable in my skin and moving forward with that evolution. So we looked at it and said, we both felt the same way. Without that experience, we could not be where we are today. So we wanna be able to help somebody else who may not have the same background as we do, supportive family or just other economic barriers, etc. So to help get to help lift them out of those circumstances, we decided to create our fund, which is, establishes three different awards within it. The first one is directed at high school students and entrants, so those kids from the small towns or have other economic careers. It’s not a requirement, by the way, that they are from a small town, it’s just a factor that’s identified in the application process, but that’s who we had our eye closed, most closely on, kids who otherwise from for any number of reasons that need to be handed up to get into university. So the first award the largest is directed at them, and the second is directed at academic achievement because we believe in you know that right you have to you can’t just show up you still have to do the work and you have to achieve and those that do we want to reward especially if they’re they come from that background and then are asserting themselves so it’s focused that segment and then the third is about allyship for existing students it can be either undergraduate or graduate students who are demonstrating strong allyship for the community and there’s an award for that they’re eligible for as well so it’s split between the three.

Mickey (23:46.686)

Yeah, that’s awesome. And I can see why you don’t sleep. It keeps you busy. 

Kurt E. Schlachter, KC (23:49.401)

Yeah, especially over the last couple of years.

Mickey (23:46.686)

Yeah, no kidding. I did a little bit of research. So the property side, it’s called Paul Edwards. Is that correct? Paul Edward Properties?

Kurt E. Schlachter, KC (24:06.976)

So that is my and my partner’s personal, well, it’s corporate, but our real estate portfolio, yes.

Mickey (24:14.314)

Yeah. Okay, it seems like it’s seen some pretty impressive growth. Can you share some of the aspects of your growth strategy so some of the listeners can learn that are looking to hop into property acquisitions? Yeah.

Kurt E. Schlachter, KC (24:27.872)

Yeah, absolutely. It has grown. We’ve been pretty strategic, I would say, not risk-averse but also not Cowboys in our approach. We’ve been cautious but we’ve been able to kind of look at where is the right risk and where are the right opportunities. So from when we acquired the initial piece of the portfolio in 2017 to already by 2021 we haven’t had dramatic growth since then. There’s just been too much going on. Interest rates for example have In that window, we’ve more than tripled the size and value of the portfolio just through our efforts of looking at what are the opportunities and making big moves. We were fortunate enough to be in a position to do a major acquisition at the beginning and acquire an existing portfolio with quite a few properties that we recognized had an upside. 

They were not mismanaged in any sense, and we were then able to dig in and somehow find the time and energy because we were both working full-time at the time to do that work to look at how we strengthen what we have and add more value and then how we use that to then turn and turn around and acquire more and then other opportunities just sort of came to us through great partnerships we have with people in the community including commercial realtor we work friend and colleague who has done great work for us. So we all identify a prospect, we’ll look into it and there’s been plenty that we haven’t pursued right. We’ll explore our conversation or make an offer and pull out of it further and as we get into it and realize it’s not quite right for any number of reasons but the ones that we’ve gone ahead with we’ve been quite happy with. So it’s really about just being patient and being deliberate and are you growing for the sake of growing? And the other thing I would give, advice I would give is don’t take on too much too soon because there are a lot of mismanaged properties out there from people who have done that. There are two things, they’re sort of two segments that I’ve come into in this space which is people who’ve fallen into properties because say for example their families, left it to them, that’s been in the family for years or generations had to do anything to manage it. It’s just been there and they’ve taken it for granted and then they haven’t managed it properly and they let it get to a point where the value has declined or the value that it could have isn’t there. That’s where I like to be. I like to identify those properties and then acquire them and then turn them into what they can be. Right? So there’s that segment and then there’s a segment who are you know younger and more ambitious but who’ve taken on too much and they’re not managing them properly not for lack of interest but for more bandwidth or capacity. And so then they’re not, say, attracting the best tenants or strong leases or best rates. They’re just kind of getting by. That doesn’t position you for growth. It takes a lot of effort to manage these properties. It’s humorous to me that the government treats them as passive income because they’re anything but. It takes a lot of work on top of lots of different things, especially in the residential space.

 There are more ongoing things with tenants that are happening constantly in real-time. The commercial space, is typically less so, but what ends up happening is you have, it seems like everything happens all at once, right? So you’ll have a big part of your portfolio where the leases are coming up for renewal or renegotiation or something, and suddenly you’re dealing with multiple tenants all at once in real time. And then you’ll have a month of quiet. And then you’ll have a month where, oh, you’ve got a big deal that’s fallen into your lap and you’re, you know, putting all your spare time into the diligence around that and a few other things like that happen. But what worked out well for us was that my partner, as I mentioned, acquired the portfolio, and we were both working. He’s a former executive. I’ve always been with the firm that I’m with full-time, super full-time. But we were just in 2022 when we moved him out of his prior role and fully into our portfolio. So his full-time gig is managing that and he takes care of all of the finance back end and more and more of the tenant relations. Previously that was more me and now it’s nice because I can get involved at a higher level, help him out, strategize, give my input and guidance, and then he has the bandwidth to do the, you know, execute those pieces, right, and then keep on top of the finances, which is where he always was strong. So it’s a good fit, a good compliment for us. And so far we’ve successfully been able to manage it entirely ourselves. We have a third party assist us with the residential properties because that’s too much to do on our own. So we contract some of the management out of those, but everything else we handle ourselves third party. The only party, the only person we pay other than ourselves to do work for us is our realtor for finding us deals and our bookkeeper and accountant for helping us with some of those basics.

Mickey (30:19.559)

Do you mind if I ask how many doors you guys manage?

Kurt E. Schlachter, KC (30:20.295)

No, not at all. So, my screen just did something weird, sorry. No, we have 75 doors.

Mickey (30:31.438)

And that’s split between commercial and residential?

Kurt E. Schlachter, KC (30:31.335)

Yeah, about two-thirds to one-third, so 24 residential doors, the rest is commercial.

Mickey (30:42.306)

Okay, any challenges, especially in the commercial real estate market? I feel like there are a lot of challenges present in today’s economic climate, right? With COVID, everyone coming back, now slowly coming back to it. What was that like for you?

Kurt E. Schlachter, KC (30:58.635)

COVID was interesting because of course none of us knew what the heck was going to happen at the beginning of it, right? So we had a deal lined up that we signed off on actually right before the pandemic was declared and things were starting to get weird. We were gone. We were out of the country on vacation right at the height of that. So that was interesting. We got home the day before they closed all the borders and had to quarantine. So we were in Palm Springs wandering around going, what the hell has happened and why is there nothing on all the store shelves? And so we had signed off on this deal before that, and we’re getting into diligence, and we came back. And even though we liked the property, we just kind of went, like, I don’t know what the hell is going to happen with any of this. So we ended up pulling out of that deal and ended up selling later on in that year. I think what we saw was sort of some short-term blips with people’s certainty of what was happening with businesses. Certain businesses were hit harder and struggled more. I think what COVID-19 did was shake out the weaker businesses and let the stronger ones emerge. So those that were already on shaky ground, just, you know, they couldn’t make it go. Or they did for a while, but on artificial means, you know, the loans and other funding that was pushed out there, it just delayed the inevitable for them.

But of course, what happened was everyone else had some of that uncertainty as well. So we had a period where we had some vacancies and, you know, it was harder to lease out space, some of the on the commercial side, because I think everyone was sort of cautious. And remember, the interest rate climate was interesting then too, right? It was quite a bit lower. So what we were seeing was those reasonably strong businesses were like, why wouldn’t I just own my property? Right.

And there are a lot of people who think that’s the way to go. It isn’t always for every business. But there was a ton of people looking to buy, right? And so the properties that we would typically invest in were very competitive because somebody was also looking to buy an owner-occupied space. And then also that meant for us less opportunity to lease out. So we were looking at it going, well, I’m not interested if I’m gonna buy it and sit on a vacancy for six months to a year well, we try to find somebody because everyone else is trying to buy their own space. All the great tenants are trying to buy their own space. So that put a bit of a chilling effect in.

 But we’ve always had really solid tenants for the most part, so it was, I would say, relatively minor. Then what ended up happening is that some of those other smaller businesses started to fail and so on. And then interest rates went bananas, you know like doubled in a year, right? So that was, that had a really interesting chilling effect on those people who were that now are no longer in that position. So then suddenly it’s done a 180 and there’s hot demand for you know a lot of our property. We have almost no vacancy in our entire portfolio which is great but it was it was a weird sort of this than that. And now we’ll see what happens the rates are supposed to trend down a bit but I don’t think it’s gonna be a while before they trend down to the space where there’ll be lots and lots of buyers out there I think we’ll still be in a competitive space, like a good competitive for us for a while, where we have the property that people are interested in leasing and as those rates tick down, it’s great for us because you know our margin improves if the interest rates go down, depending where you’re at right because that’s another question that people like in our business need to ask themselves, do you take the risk of the floating rate? Typically I would have always said the weird stuff I just went through over the last three years, I would say, I don’t know, I might be more inclined to a block product if the rate is reasonable and attractive than at least I have a certain T rate, I know what my margin is. The one thing that is often overlooked in commercial real estate especially is you can’t be nimble in the sense. So if you’re doing any third-party financing, banks want solid leases, right? They want to see your properties occupied with solid leases with strong rent revenue.

If you do that and you lock in at a rental rate for three to five years, you can’t just change the rent if your expenses go up. Right. So you have to try to balance those to what’s happening on either. What are the pressures on either side? Expense revenue. You can do things like build-in escalations and plan for some of that. But certainly it was, you know, at the beginning of COVID not possible for us to anticipate what was going to happen. And it’s ended up being a good thing that our rates have gone up because of that competition, I was talking about. So that’s great, but I don’t know what the, is there another shoe that’s gonna drop at some point? And by then, well, we have not been able to position ourselves quickly enough. Is it gonna continue to get more competitive and I’m leaving money on the table? Or is it that by the time we get through current leases, our rates gonna go down again? I don’t think so. I don’t think they’re gonna go down anytime soon with inflation and all the other things probably be more of a sustained slower increase. So I hope for everyone’s sake not just my own that that’s the case because the rollercoaster we’ve been on is just too tough for everyone. You know from just your everyday citizen who works nine to five and has employment income, costs skyrocketing for the necessaries of life, it’s tough for business people especially small businesses to navigate all of that.

Mickey (37:02.414)

I don’t think they’re going down.

Kurt E. Schlachter, KC (37:05.669)

When they fail, we all suffer. Small businesses contribute a lot to the communities they’re in, in multitudes of ways. We don’t all just want giant massive corporations as our only option. I think that we will regret it if we end up in that space.

Mickey (37:27.862)

Yeah, I couldn’t agree more. Do you guys have an exit strategy or also a five-year, 10-year goal in terms of what you wanna accomplish, how many doors you wanna manage, and how big you wanna get? Because looks, like you’re gonna have to sleep eventually, right? And like truly, like eventually life is gonna catch up and you’re gonna have to slow down. We all know that happens.

Kurt E. Schlachter, KC (37:49.731)

Yeah, eventually I’m going to be I’m going to be old and tired. Yeah, we do have we do have a bit of a plan. One thing we are good at is being flexible in our planning. So we are prepared to kind of move as things change and evolve. We never are too rigid in our planning. But at this point, we don’t have to do anything different than we’re already doing. It’s a great business that we’ve grown into a great size, you know, generating first generation of revenue as far as an asset base for us for the future, for, you know, whoever we choose to leave our estate to someday, they’ll be in good shape if we make no changes, but we’re also very interested in, especially me, I’m a growth-driven, love-to-make-deals kind of guy, so I’m going to continue to look for that, and if there’s an opportunity we’ll take it. And I would say probably, if I got out my crystal ball, I would say we’ll grow a bit more before we contract, and then the decision will be then, are we ready to start divesting of the assets? And then we’ll do that strategically or if not and we don’t want to actively manage it anymore do we hand it off to a manager and then just you know go son ourselves somewhere and collect our cut of the revenue that would also be okay but I’m also not so naive to believe that there won’t still be work involved as I said it’s not passive even with the manager you have to manage the manager so that’s okay but I think that’s probably a good balance of I know myself reasonably well gifts of age are that self-awareness. I’m not very good at sitting around, being idle, doing nothing, and I’m not very good at not using my brain, so I’m gonna wanna be, even if I slow it down, which I think I’ll have to at some point, I’m gonna wanna be doing something that interests me and that stimulates me.

Mickey (39:54.098)

Yeah. you don’t seem like the type to just go retire in Palm Springs and play golf for the rest of your life. 

Kurt E. Schlachter, KC (39:57.379)

No that’s not going to cut it for me but I do want to be able to do that so the real thing that I want to do is have the ability to have more time and more free time to do those things and spend time together and with family and all of that which is a great opportunity.

You know, the non-glamorous side of success that people don’t talk about is those impacts, right? There are only so many hours in the day and those who end up making the greatest sacrifice typically are those closest to you because something has to give you may be with them physically, but if you’re dialed into your work or something else or distracted, they’re the ones who feel that, so I believe in balance and trying to find it where you can. Not always good at practicing what I preach there, but it is really important. Our goal as a family is to get to the point where we can actually breathe and spend that quality time together and not have any other distractions or interruptions. If there’s something we choose to and want to focus on, then we do that. And we do it well, but it isn’t 24-7 around us, constantly pulling you in those directions. It’s a deliberate choice of enjoyment. I think if I get there I’ll be pretty happy.

Mickey (41:15.774)

Yeah, it’s all it’s a pursuit of it.

Kurt E. Schlachter, KC (41:16.903)

Yeah, exactly. Means to an end.

Mickey (41:22.122)

Yeah, exactly. Any books podcasts or resources that you find have significantly impacted your day-to-day life and your leadership and journey?

Kurt E. Schlachter, KC (41:32.119)

There are a few, I wish I had more time actually because I enjoy them. The problem that I find is I can’t just sit down and listen to a podcast because I’ll fall asleep. It’s too mellow for me. So I have to do either when I’m driving or moving around in some way. So probably one of the most influential people that I listened to years ago who resonated with me and I still follow and listen to his content is Simon Sinek. He’s a really interesting guy and he has some great, you know, his whole like why, start with why, and some of his other books and talks. He gives some great TED talks. Really, interesting. He resonated with me early on. And then I followed just some cool entrepreneurs, right? Arlene Dickinson on the Canadian side is someone who I found interesting for a long time not just because she was on TV, but just because I think she’s like her background is really impressive. I’m always impressed by people who have pulled themselves up from nothing and made something of themselves and also, you know, made a point of supporting other people who want to, you know, make it themselves and are prepared to put in the work.

They’re not handing anything to anyone, but they’re going to help people succeed and pass on some of their knowledge. And then I would say most recently I’ve been enjoying Brene Brown’s work. She talks a lot about, her work is all largely about vulnerability. And there are some cool key teachings when you listen to her work. One of my favorites is her book called Daring Greatly.

Kurt E. Schlachter, KC (43:22.701)

She talks about how you, and if you get a chance in heaven, she has a TED talk that she did that’s on Netflix that’s fabulous. It gives you a flavor. She’s a great deliverer, and a great speaker, and her audiobooks are great. But she talks of the concepts of, lots of different concepts, but it’s all around, largely around vulnerability and how, how you can’t necessarily be successful or overly creative without making yourself vulnerable. And that’s a hard thing for some people. So vulnerability comes in lots of different forms, but if you’re so afraid to fail that you never take the chance, you’re not likely to succeed to the level that some people envision, right? And there is no, I don’t think there’s any one measure of success and I don’t think that people who achieve less than others are failures in any sense, right? I think success needs to be a relative term. You need to define it for yourselves. I think it needs to be rooted in happiness. To me, somebody who lives a very frugal existence and is happy, they’re winning, man. Like, good for them, right any of them, whereas you know you get in this space where I exist with all the type A’s and they’re like, you know, go and you’ve got to make more and have more and show off more than others. That isn’t necessarily a route to happiness at all. 

Mickey (44:58.294)

But it’s told to us as the road to happiness, right? The American dream, so to speak.

Kurt E. Schlachter, KC (44:59.671)

Yeah, you have to watch it. But I think it’s all about like whatever you define as your goal and what you think is your path to happiness. You’ve got to try and you’ve got to take some risks and you’re probably going to fall and you’re going to need to get up and dust yourself off. But you can’t get there otherwise. And one line that she said that was like, wow, something like.

Vulnerability is the birthplace of innovation, right? You can’t end creativity. You have to get into those creative spaces. You have to open up. You have to be willing to share ideas that someone else might think is stupid and be told that and talk through that and get over your ego and all the rest of those things, right? But I just, I’ve enjoyed her work and all of those respects.

Mickey (45:55.87)

I’m going to check that Netflix series out. But yeah, Simon Sinek is someone that I’ve listened to for a while and enjoy as well. So thanks for sharing that. Last question. Reflecting on the insights that we shared today, what are some key takeaways that you would like our listeners to leave with today and some advice that you would give them, whether it’s law, real estate, focus, whichever?

Kurt E. Schlachter, KC (46:19.571)

I think I would say, just to try to translate my experience into some deliverables that you might want to think about if you want to be in the legal profession, and you should want to be, it’s a great profession. Certainly, it’s a great degree to obtain. You will never regret having a law degree, I believe strongly. Whether you end up in private practice like me or any of the other possibilities, a law degree is powerful. It’s knowledge insight into so many things that you would otherwise not know. If you want, I don’t know if I’m allowed to swear I won’t, but if you don’t, it’s a don’t fuck with my degree, right? So it gives you that context of really understanding your rights as a citizen and what you can do and what someone cannot do to you..

Kurt E. Schlachter, KC (47:14.031)

I think it helped me ground myself and be able to move forward gain comfort and strength in who I am and grow. Because I grew up as a pretty shy kid, right? I was struggling with my own identity, what that all meant, and I’m a natural introvert, but to be able to be like, no, I have this knowledge and I’m not going to be treated this way and I’m going to stand up for myself, it ties into all of that to be able to then turn that into, I’m gonna look out for someone else, if you’re that type of person who thrives on justice and I wanna help somebody who needs my help and I can translate my skill and knowledge into that. It can be extremely rewarding and so I think it’s great for that and it’s translatable into so many things, right? My business experience and where I am now wouldn’t be possible without the law degree either and the experience I’ve had as a lawyer and a business owner because I was able to translate pieces of that into what I’ve been doing. I can draft an agreement. I can put together a deal. I can negotiate things that I’ve learned on the job, right? That others would have to hire somebody else to do for them. And so that’s been great. And so I would say, you can’t go wrong even if you don’t end up as an actual practicing lawyer with that type of degree. And then from there, if you wanna get into private practice, do it, try it. Don’t give up right away, ’cause it’s not gonna be easy. You’re gonna have to work hard. You’re gonna have to dig in. People are gonna be mean to you along the way, right?

It’s an adversarial-based system that we’re dealing in, right? Even if we’re doing transactional work, it’s still adversarial. But if you’re doing litigation, you’re ending up in court, you know, somebody’s going to come at you and it’s going to feel really like, whoa, you know, you can’t take it personally. Like, you’ll have to work through all of those things. But if you can get through that, it can be really, really fun, exciting work and very rewarding in the sense of, you know, you can help people and you can earn a good living while you do it for them.

The most important thing about that is, to think about the business side. That was one of the things that I didn’t, you do not get out of law school, right? You get the theoretical knowledge and it’s very theoretical. Most of your instructors, and professors are academics. They bring in some people, the sessional lecturers who are, you know, lawyers out in real life, but it’s very, it’s very much conceptual, you know, driven, not a lot of practical skill translated. I think some of the schools are trying to do better there like advocacy, teaching you how to be in court. There’s some of that now, which is good to see, but there’s very little about business and law. 

The practice of law is fundamentally a business that you need some help with, or you need to get your head around it. What does that look like? Like, how do I grow a practice? You know, one way is to just show up and do good work and work hard and get other people to get your name passed your name around. That’ll happen organically, but you can accelerate that with some strategy. How do I market myself? And what do I want to do? Right? What kind of area do I want to be in? As much as it’s important to focus on that, also don’t pigeonhole yourself because just like picking a major in school, you’re probably going to change that. I did high-conflict family law for many years. That was not my choice at a law school. Right, it just evolved into that and I ended up being good at it for the most part, enjoying it. And so it worked, but there are all sorts of things that’ll come, so keep an open mind, be prepared to shift and roll with it a bit, but think about the business and then grow with that and see if it works for you. If not, you have other opportunities that you can pursue. 

The other piece I would say is to get into your community. Find a way to contribute in a meaningful way because you will find it rewarding. I don’t care what it is. Do you like dogs? Go volunteer at an animal shelter if you’re into healthcare, there are plenty of opportunities there. Education, like me, find something, do something, give back, and contribute, even in a small way. And I’m not talking money, because when you’re starting, you’re not going to have any. Right? Like you’re paying loans, you’re doing all the rest of it. Contribute in some other way that you can that adds value to the other party and that you feel is rewarding. And then, you know, keep an eye open for opportunities. But remember, you don’t have to say yes to every opportunity you can’t and you shouldn’t and it’s okay to say no. You know, I just don’t have the bandwidth for that right now. I’m tired and burned out. I don’t want to sit on a third board. I have a busy professional life. It’s okay to say no. So find the things that you’re most interested in and excited about and the success will build from there. The third piece of advice I would give is diversify, diversify. And I mean diversity in every context, right? Surround yourself with people different than you. Get their perspectives.

It gives you, I mean the data is out there, right? You get better products, you get way better results and satisfaction from working with a more diverse group of people. DEI isn’t just a bunch of hooey, it is legit. So there’s that. Diversify in your environment the people you’re working with if you can.

Kurt E. Schlachter, KC (52:35.251)

The other thing is in your business and your life, don’t put all your eggs in one basket. There’s a reason that I diversified into real estate, but it’s not where I have all of my wealth, right? I have other areas as well. You know, I similarly would never put all of it into the stock market, but I have some in both. And there’s other things, you know, we’re always looking for things and interesting opportunities. And as you do well there, more opportunities will reveal themselves to you and work within your risk tolerance. It’s okay to be risk averse. It’s okay to be a cowboy, but just make sure you’re aligning and you’re prepared for what the consequences of that may be. If you’re risk averse, you’re not gonna see some of the dramatic upside and that’s okay if that works for you. If you’re more risk-tolerant and you roll the dice, well, it might not go your way and you better be prepared to lose what you’ve thrown out, right? So you work through those pieces because in law there’s going to be lots that reveal themselves to you because you collide with so many different types of professionals and business people and you’ll have these opportunities and it’s a great way to just add some interest but also to not have all your eggs in one basket because hey you may decide you hate it one day and I see an awful lot of lawyers who are stuck in the profession that they no longer enjoy because they didn’t build they’re miserable. After all, they don’t have any, they feel like they don’t have any other option. And it can create a bit of a golden handcuff scenario, right? For the most part, if you’re reasonably competent, you can make a decent living as a lawyer. It’s pretty hard to walk away from that and go do something else where you’re making way less money because then you’re going to feel like a failure and all the other emotional roller coaster that will happen. So I think it’s a really good idea to look at building out something else around you that you in another direction when you’re ready when that time comes.

Mickey (54:43.414)

That’s awesome. Well, that’s some great advice. Thanks, Kurt. That’s all I have for you today. So yeah, I just wanted to thank you for your time. I’m gonna ask you to stick around before I end the recording. Just wanted to share a few things with you after. To our listeners, thank you so much for listening and joining in and we’ll be sharing this across all of our platforms on YouTube, Spotify, Apple, and all the other ones as well. Thanks again.

Kurt E. Schlachter, KC (54:43.559)

Yeah, my pleasure. Thank you.