Kristina Chang

Exposure Is the Whole Game

Kristina Chang — Mon, 05 Oct 2026 19:48:15 GMT

Fifty kids in my grade. That was the entire class at my elementary school at St. Joseph's from ages 3 to 13.

In fifth grade, one of the parents in our class happened to be Tim Draper. He brought a program he created called BizWorld into our classroom, and for one week, ten year olds ran mini businesses like it was the real thing.

We built a bridge out of toothpicks and glue and loaded it until it snapped. We dropped eggs off the roof and debated packaging design like our product launch depended on it. We split into teams, ran companies, argued about who did the most work, and took all of it far too seriously. None of that was actually the point.

The point was that for one week, starting a business stopped being something adults did and became something we did. Ten years old, and it suddenly was not abstract anymore.

I never really stopped after that. I sold mix tapes and DVDs in middle school, tried to start a marketing company targeting college kids, etc. A dozen other small hustles that made no real money. None of them mattered because of the profit. They mattered because they were reps.

By the time I was old enough step into a leadership role at Westlake Realty Group, I had already been practicing for almost two decades. Not studying entrepreneurship. Doing it, over and over, until it stopped feeling foreign.

I think about this constantly now that I'm the one in the room who decides what the next generation gets exposed to. My daughter is two. My team has kids. Someday there is a next generation at Westlake who needs their own version of a toothpick bridge.

You cannot want to become something you have never been shown up close. Exposure is not a small input. It is the whole game.

What is the thing you were exposed to young that quietly decided the direction of your life?

Four days in Germany with my YPO chapter

Kristina Chang — Fri, 02 Oct 2026 22:32:35 GMT

Oktoberfest, driving 911s through the German and Austrian countryside, a tour of FC Bayern München, and bonus surf at Endless Surf (very impressive if you ever have a long layover in Munich) on the way to the airport.

That's the itinerary, and it's the version that's easy to post about.

It's not what I keep thinking about a week later.

What I keep thinking about are the one-on-one conversations that happened in the gaps between all of that. Off to the side of a biergarten table, in the back of the bus between stops. Some with people I have sat in this same forum with for years. A couple with people I met for the first time on this trip.

That's the part that surprised me. It didn't matter which. Ten years or ten hours, the conversation went the same place: not this quarter, not the fire I was putting out the week before I left, but the long-horizon question, who you are becoming as a leader, not what you are dealing with this week.

Normal life does not give you that conversation regardless of who it's with. It gives you twenty minutes between two calls, with someone checking the time. This format does something else. It gets a stranger and a decade-long friend to the same depth, because everyone in the room has already agreed to the same level of honesty.

That is the actual return on ten years in this chapter. Not the country we fly to.

What's the long-horizon question you're circling right now that you haven't given real, unhurried time to?

Wednesday Real Estate 101: What is a distribution?

Kristina Chang — Fri, 02 Oct 2026 22:28:51 GMT

A distribution is money paid out to investors during the hold period, before the property is sold. It shows up in your account, and it is real money, no matter where it came from.

There are two common types, and both are good news, they just tell you something different about the deal.

An operating distribution comes from cash flow. The property generated more income than it needed to cover expenses and debt service, and the excess went to you. That tells you the property is performing well today.

A distribution from a refinance or a capital event is different, and just as valuable. It usually means the property has grown in value or paid down enough debt that the sponsor could pull cash out and return it to you, often tax-efficiently, without selling the asset and without you losing your ownership stake. That is a sponsor actively managing the capital stack to get liquidity back into your hands faster.

Here is where it gets important for you as an investor. These two distributions are telling you different things, and knowing which one you are getting helps you actually understand how the deal is going. An operating distribution tells you about current income. A refinance distribution tells you about value creation and the sponsor's ability to recapitalize efficiently.

The question to ask your sponsor: is this distribution coming from cash flow, or from a refinance or capital event? Either answer can be a good one. You just want to know which story you are in.

Has a refinance distribution ever come earlier than you expected, and how did that change how you thought about the deal?

The Environmental Risks Hiding Under IOS

Kristina Chang — Fri, 02 Oct 2026 18:44:46 GMT

Every IOS deal we underwrite gets one document that can kill it before we talk price. The Phase I environmental report.

IOS looks like the simplest asset class in real estate. Dirt, a fence, a tenant parking trucks on it. The environmental diligence tells a different story.

What actually gets flagged:
1. Historical fuel and hazmat use. Old underground storage tanks, former gas stations, auto or truck repair, not just the site's current use.

2. Contamination migrating from next door. Your lot can be clean and still get flagged because of what happened across the street.

3. Stormwater compliance. An outdoor yard with trucks and equipment falls under industrial stormwater permitting, an ongoing operating requirement, not a one-time check.

4. Wetlands, floodplain, or protected habitat. More common than you'd think on vacant or underutilized industrial land.

5. PFAS. The one that changed the game. If the site or a neighbor ever used firefighting foam, this is now a real flag in a way it was not five years ago. What changed: ASTM tightened the Phase I standard itself in 2021, so reviewers read sites more conservatively. Then in 2024, EPA designated two PFAS compounds as CERCLA hazardous substances.

Overnight, decades of old foam use that nobody flagged before became a real diligence item on industrial and trucking sites nationwide.

Here is why it matters beyond the checklist. Every flag is friction. Friction filters out sellers who cannot clear the bar and buyers who are not paying attention. The sites that already survived this scrutiny and are already operating get harder to replace every year the bar rises.

If you are underwriting IOS right now, ask your environmental consultant one question: does your Phase I scope specifically address PFAS given this site's history? A lot of standard scopes still do not.

What is the environmental flag that surprised you most on a deal?

Join Me at IMN’s IOS Forum

Kristina Chang — Wed, 30 Sep 2026 23:31:36 GMT

I'm honored to be speaking at IMN's Industrial Outdoor Storage Forum this October in California! Join me and industry experts to explore the IOS market outlook, institutional consolidation, regulatory challenges, and much more.

Click here https://lnkd.in/gJyZndhY and save 20% on your registration with the promo code below!

Wednesday Real Estate 101: Functional obsolescence

Kristina Chang — Wed, 30 Sep 2026 23:26:37 GMT

Some office buildings are in perfect physical condition and still nearly worthless. That is not a contradiction. That is functional obsolescence.

Here is the definition. Functional obsolescence is when a building no longer functions the way the market needs it to, even when there is nothing physically wrong with it.

It is different from physical deterioration. Physical deterioration is a worn-out roof, a failing HVAC system, cracked paving. You fix it with a check. Functional obsolescence is harder, because the building can be pristine and still be obsolete. The world moved. The building did not.

Office is the clearest example happening in real time.

A lot of the office stock built between 1980 and 2005 was designed for a way of working that no longer exists. Deep interior floor plates built for rows of cubicles, with workers far from any window. Low ceilings. HVAC sized for a different density. Parking ratios set for five-day-a-week occupancy. Single-tenant lobbies and elevator banks that do not fit how hybrid teams actually use space now.

None of that is broken. All of it is obsolete.

And here is the part investors miss: some functional obsolescence is curable and some is not. You can modernize a lobby. You usually cannot move a structural column, raise a ceiling, or fix a floor plate that is fundamentally too deep. When the obsolescence is incurable, the value is not in the building anymore. It is in the land underneath it.

This is exactly why we treated a class C office building my family owned in Santa Clara as a covered land play. The office was functionally obsolete. The land was not. We cash flowed it while we entitled it, and now we are building 328 units of multifamily on the site.

When you evaluate any building, ask two questions. Is it physically sound?And does it still do the job the market is paying for? Those are not the same question.

What functionally obsolete building in your market are you watching, and do you think it gets renovated or torn down?

From Observer to Owner

Kristina Chang — Wed, 30 Sep 2026 23:24:52 GMT

I still remember the taste of the ice tea at our retirement centers. Starting at 7, I spent summers at Westlake Realty Group shadowing my grandfather. Property tours were always my favorite day of the week.

I wasn't working in any meaningful capacity. I was filing papers. Making copies. Tagging along on property tours and pretending to understand what the adults were talking about.

But here is what I know now: I was learning.

Not the curriculum I would get at Stanford GSB. Not frameworks or financial models. Something else. Something that has no name in any syllabus I have ever seen.

I was learning what it feels like when a business is real. Not a simulation. Not a case study. A real thing that real people depend on, that can fail, that requires someone to show up for it every single day or it starts to come apart.

I learned what my father's face looked like when a deal was hard. I learned that some conversations only happen between adults in another room. I learned that the people who worked for my family had names and kids and bills and were counting on us.

None of this was taught to me. I absorbed it the way children absorb language. Before I had words for it. Before I could explain what I was learning or why it mattered.

When people ask whether I felt pressure coming back to lead a third generation business, the honest answer is that the pressure was never the hard part. I already knew what the business was. The transition from observer to owner was less a leap than a slow, long walk I had been on my whole life without knowing it.

What the business does changes. We used to run retirement centers. Now we own two, and they are not core to what we do anymore. But the ownership mentality and the leadership instincts I learned from my father and grandfather never left. Those endured.

What did you absorb about work and money before you were old enough to understand it?

There Is No Secret. Just Don’t Quit

Kristina Chang — Wed, 30 Sep 2026 23:21:47 GMT

Everyone wants the strategy. Nobody wants the actual answer.

There is no secret. There is just not quitting, for long enough, next to the right people.

Six years ago I started raising outside capital and creating an investment firm within my family's business. Nobody in the family had done that before. I did not have a playbook. I had a lot of no's and a lot of nights wondering if I was the problem.

If you are early in building something new, a few things I would tell you:

1. Expect the first version of the plan to be wrong. Our first pitch deck does not resemble what we send investors today. Being wrong early is not a signal to stop. It is just the first draft doing its job.

2. Borrow conviction on the days you run out of your own. There were stretches where I did not believe in the timeline. My business partner Lino Campanile and my sister Kelly Chang Levine lent me conviction when I didn't have any of my own.

My husband (today is his birthday, happy birthday John!!!!) carried more than his share at home during the years this took everything I had. You do not need to feel certain every day. You need people around you who are certain on the days you are not.

3. The work does not get easier. It gets more familiar. I still feel the ask every time. What has changed is that I no longer mistake the fear for a sign I am on the wrong path.

Six years in, on track to close over half a dozen properties this year, most of it funded by people who were strangers when I started. None of it was one good idea. It was refusing to stop, next to people who refused to let me.

If you are building something new right now and it feels slower than it should, that is not a signal either. Keep going.

What is the thing that kept you from quitting in the middle of your hardest stretch?

Wednesday Real Estate 101: The waterfall

Kristina Chang — Wed, 30 Sep 2026 23:18:10 GMT

Preferred return tells you the floor. The waterfall tells you what happens after.

A waterfall is the order in which cash gets distributed between the sponsor (GP) and investors (LP) as a deal performs. It sounds complicated. It is really just a sequence.

Here is how ours runs on a recent industrial outdoor storage deal:
1. Return of capital. Investors get their principal back first.
2. Preferred return. Investors receive an 8% annual return before the sponsor sees a dollar of profit.
3. Promote tiers. Above the preferred return, profit splits shift in the sponsor's favor, but only as performance climbs.

What this structure tells you: the sponsor only gets paid meaningfully once investors are already doing well. If the deal is mediocre, investors keep almost all the upside. If the deal is a home run, the sponsor earns their share, because they have actually earned it.

What to watch for when you are reading someone else's waterfall: does the GP catch up to a bigger promote the moment the preferred return is hit, regardless of how the deal actually performs after that? That is a sign the structure rewards closing the deal, not compounding your capital.

The waterfall is where alignment either shows up or does not. Read it before you read anything else in the deck. What is the most aligned (or least aligned) fee structure you have seen in a deal?

Judge the Underwriting, Not the Software

Kristina Chang — Wed, 30 Sep 2026 23:15:47 GMT

An LP told me last month he almost passed on a sponsor because the deck "looked too AI."

I think that instinct is exactly backwards.

A sponsor who uses AI well is not cutting corners. They are telling you something about how they spend their hours.

1. Time is the scarcest resource in this business, not polish.
Every hour a sponsor is not manually formatting a deck is an hour they spent underwriting one more deal, running one more sensitivity, or picking up the phone with a broker. I would rather a sponsor spend Sunday night finding yield than kerning a title slide.

2. Leverage is the whole point of a platform.
A two person shop that uses AI well can out-underwrite a twenty person shop that doesn't. That is not a shortcut. That is exactly the kind of resourcefulness you should want behind your capital. It is also why we can run leaner and pass lower fees on to our investors.

3. The deck was never the diligence.
If the only thing standing between you and a bad deal is whether the font looked "handmade," you were never doing diligence in the first place. Check the numbers. Check the track record. Check how much of the sponsor's own money is in it.

Judge the underwriting, not the software.

Would you rather your sponsor spend their time on the deck, or the deal?

Thank you to Katie Fifer and Recalc Academy who first got our team up and running with decks in Claude Design! If you don't know where to start on AI, contact the Recalc team.

The Culture Held Without Me

Kristina Chang — Wed, 30 Sep 2026 23:11:16 GMT

The entire Westlake team is in Cabo right now. I am home with a fever my two-year-old brought back from school.

Every year we shut the company down and fly everyone to Mexico for four days. Not a department. Not the leadership team. Everyone and their spouses. As a family business, family time is already sacred to us, so people ask why we give up four vacation days for a company trip. The retreat is where we hand the team our family values in person and off the clock.

This year I did not make the flight. Eleanor started school three weeks ago. If you have ever put a toddler into a classroom for the first time, you know exactly what came home with her by week three. Eleanor shook it off in a day but it took me down hard. I spent the last week coughing up a lung and catching up on Netflix while the entire Westlake Realty Group team drinks margaritas on the beach.

Here is what I keep coming back to.

1. The trip did not need me in it.
For years I have said you find out who a team really is when you take away the desk and the deadline. This year the thing that got taken away was me. They surfed, ate tacos, zip lined, fished (check out that marlin!), golfed and by every account I am getting, had more fun without the boss around. The culture held without the person who usually narrates it.

2. It is the same lesson Eleanor's first day taught me.
A few weeks ago I wrote that being a CEO and being a mom are the same job: build something that thrives with less and less of you every year. I did not expect to be tested on it this quickly. Eleanor did not need me in her classroom. The team did not need me in Cabo. Neither one is a loss. That is the plan working.

3. I still got four days of family time.
Just not the version on the itinerary. Ninety-nine-year-old grandmother (waving from across the room), two-year-old daughter, my aunt, and all of us home. A different kind of team bonding.

The retreat is still the four most important days on our calendar and I will be on the plane next year. But sitting this one out taught me something the trip never could. The trust does not live in that room because I am in it.

For the working parents: what did your kid bring home from week three that took out the whole house?

Wednesday Real Estate 101: Zoning

Kristina Chang — Wed, 30 Sep 2026 23:05:12 GMT

Zoning is the single biggest lever on what a piece of land can become, and most investors never actually read the code.

In plain English: zoning dictates the use, density, and physical form allowed on a parcel. It is set by the local jurisdiction, and it can be more valuable than the dirt itself.

Here is what to look for:
--> Use permitted by right. Can you operate your intended use today, no hearing required? Or does it require a conditional use permit, which means
a public process, a hearing, and real timeline risk?
--> Zoning trend. Is the surrounding area rezoning toward your use, or away from it? In California, industrial parcels are increasingly being rezoned for housing under state density laws. That is a headwind for industrial buyers and a tailwind for anyone who already owns permitted industrial land.
--> Entitlement risk. The gap between what a broker's pitch deck assumes you can build and what the zoning code actually allows by right is where deals blow up in due diligence.

Here is what it does not tell you: whether the market wants what you are allowed to build. Zoning sets the ceiling. Demand determines whether you hit it.

This is a big part of why we like industrial outdoor storage in supply constrained California markets. The same zoning friction that makes new entitlements painful (CEQA review, community opposition, air quality rules) is exactly what protects the value of the yards already permitted and operating. The code that makes acquisition hard is the code that makes the asset scarce.

Read the zoning code before you read the pro forma. It tells you what is actually possible.

What is a deal you have seen (or been in) where zoning was the real story?

The Best Investor Pitch Is Not a Pitch

Kristina Chang — Wed, 30 Sep 2026 23:01:54 GMT

Monterrey, Mexico. A room full of family offices.

That is not a brag. It is the actual takeaway of the trip.

We partnered with DXD Capital and UBS to host an investor day for local family offices, part workshop, part introduction to Westlake Realty Group and DXD Capital. A few things stood out.

1. Deliver more value than the deal itself.
Instead of just pitching, we brought in an AI workshop and taught a live session on Claude to a room of family offices, many of whom were not daily users of Claude. The deal conversation happened. But the room remembered the workshop first. If you want to stand out with sophisticated capital, teach them something they can use whether or not they ever invest with you.

2. Skin in the game is the actual pitch.
Family offices like investing with other family offices, and the reason is simple: they can tell when a sponsor has real exposure to the outcome. We put 10 to 20% of the equity into every deal we do. That number does more convincing in a room like this than any slide in the deck.

3. Nearshoring is not a thesis in Monterrey. It is the local economy.
We talk about nearshoring driving industrial demand across the border. In Monterrey, we were not explaining a trend, we were talking to the people living inside it. Every family office in that room could point to a factory or a logistics yard near them that did not exist five years ago. That made the rest of the conversation easy.

Grateful to Drew Dolan and Jose Miguel Benavides for partnering with us to make Monterrey happen, and grateful to every family office who spent the day with us.

What is the most memorable thing a sponsor has ever done to earn your trust before you invested?

Wednesday Real Estate 101: Debt Service Coverage Ratio (DSCR)

Kristina Chang — Tue, 29 Sep 2026 23:20:52 GMT

One sentence: DSCR measures whether a property's cash flow covers its debt payments.

If a property generates $125,000 in net operating income and the annual debt payment is $100,000, DSCR is 1.25x. For every dollar of debt service, there is $1.25 of income backing it up.

Here is what it tells you:
--> How much cushion exists before a property cannot pay its mortgage
--> How a lender is pricing risk on the deal
--> How much room there is to absorb a rent dip, a vacancy, or a rate reset

Here is what it does not tell you:
--> Whether the underlying NOI assumptions are realistic
--> Anything about your equity returns
--> Lenders typically want to see 1.20x to 1.25x minimum before they will underwrite a loan. Below 1.0x, the property is not covering its own debt
payments. That is technical default territory, regardless of how good the equity story sounds.

At Westlake, we underwrite conservatively above lender minimums, not to the minimum. We want a DSCR that survives a rate reset or a soft leasing quarter, not one that only works if every assumption holds. That is the whole idea behind neutral to slightly positive leverage: cash flow that works even when rates do not move in our favor.

DSCR will not tell you if a deal is a good investment. It will tell you how much room for error is built into the debt.

What is the first ratio you check before you evaluate a deal?

AI Automated 90% of Budgeting. The Last 10% Is the Real Job

Kristina Chang — Tue, 29 Sep 2026 22:48:26 GMT

A year ago, what we are doing right now in budgeting season would have been unthinkable.

Not slightly faster. Unthinkable.

Budgeting used to be the most dreaded stretch of the year for every asset and property manager on our team. Weeks of pulling historicals, building assumptions line by line, reconciling against actuals, defending every number before it went to ownership.

This year, AI is doing roughly 90% of that work. Our team's job has shifted almost entirely to judgment calls.

1. The 90% was never the actual job.
Pulling historicals, formatting templates, running the same formula across 40 line items, that was never where the value was created. It was the tax you paid to get to the part that mattered. AI just stopped charging us the tax.

2. The 10% left is harder, not easier.
Now the question in every budget review is not "did you build the model correctly?" It is "do you actually understand this property?" Why did this expense line spike? What does the market actually support for this renewal? Is this vendor quote real? That is a much harder conversation when there is nowhere to hide behind the spreadsheet.

3. This should scare some people, and I do not think we should pretend otherwise.
If 90% of a job can be automated, the honest question is what happens to the people whose job that used to be. I do not think the answer is fewer people. I think the answer is that the same people now spend their time on the 10% that was always the real job, and the ones who were only ever doing the 90% have a real problem.

4. Speed is not the interesting part. What we do with the extra time is.
We are not doing budgeting season faster so we can move on. We are doing it faster so our managers spend more time on the properties, not the templates.

What is the 10% in your job that AI cannot touch, and is that 10% actually the real job?

The Goal Is to Be Needed Less

Kristina Chang — Tue, 29 Sep 2026 22:47:21 GMT

This month Eleanor started school for the first time.

For two and a half years, I could hear her downstairs. A door closing, a toy dropping, "Mama" from the bottom of the stairs. This week, for the first time, I couldn't.

It has been a bigger adjustment than I expected. Not because anything is wrong. Because the whole point of the last two and a half years was working myself toward this exact moment, and it still catches you off guard when it actually arrives.

It made me realize something. The job of a CEO and the job of a mom are the same job.

Your job is not to be needed. Your job is to build something, a company or a kid, that thrives with less and less of you every year. You start out doing everything. You end doing almost nothing on purpose, because you did the first part right.

Most leaders measure themselves by how essential they are. I think that is backwards. The real measure is how well things run when you are not the one running them.

Eleanor did not need me in her classroom this week. That is not a loss. That is the whole plan working.

What is something you built well enough that it stopped needing you, and did it feel like a win or a loss when it happened?

Wednesday Real Estate 101: The rent roll

Kristina Chang — Tue, 29 Sep 2026 22:45:00 GMT

A rent roll is a snapshot of every tenant in a property: who they are, what they pay, when their lease started, when it ends, and what is contractually owed. On paper it looks like a boring spreadsheet. In reality it is the truest picture of the income you are actually buying.

Here is what I am actually looking for when I read one:

1. Lease expiration schedule. When do the leases roll? If half the building expires in the same 12-month window, you are buying concentrated rollover risk, no matter how full it looks today. I want to see the rollover spread out.

2. In-place rent vs market rent. Are tenants paying below, at, or above what the market would charge today? Below-market rent is embedded upside. Above-market rent is a warning: that income may not survive renewal.

3. Tenant credit and concentration. One tenant paying 80% of the rent is a very different risk than ten tenants paying 8% each. In single-tenant IOS, this is the whole game, which is why we underwrite the tenant's credit and their need for the location as hard as we underwrite the dirt.

4. Escalations. Does the rent step up over time, and by how much? Flat rent in an inflationary world is a slow loss.

5. Actual vs contractual. What is owed is not always what is paid. I want to know who is delinquent and who keeps quietly renewing.

The rent roll tells you what you are buying. The offering memorandum tells you what someone wants you to feel about it. Read them in that order.

What is the first column you go to when a rent roll lands in your inbox?

Vibe Coding Didn’t Remove the Skill Gap. It Moved It

Kristina Chang — Tue, 29 Sep 2026 22:43:21 GMT

Vibe coding is being sold as the great equalizer. It is not. It just moved the bar instead of removing it.

Now everyone can hack together a short term solution. Almost nobody is building the kind of lasting infrastructure that actually compounds for an organization.

I taught myself to code in 8th grade. I do not work as an engineer today, I run a real estate investment firm. But that early foundation is exactly why I can tell the difference between someone getting lucky with a prompt and someone actually directing a model well. Here is what nobody tells you. Getting a good result out of it is a completely different skill.

That skill is not technical. It is a discipline I picked up as a kid and have spent the last year re-teaching my team from the top down, and it has nothing to do with knowing how to write a line of code yourself.

1. Architecture.
Before you ask an AI to do anything, you have to know how the information should be structured. What depends on what. What is the source of truth. What should live in one place instead of being repeated in five. Most bad AI output is not a bad model. It is someone asking a well-phrased question of an unstructured pile of information.

2. Information quality.
An AI is only as good as what it is standing on. Feed it a clean, complete repository of what you actually know, your deals, your theses, your mistakes, and it reasons like your best analyst. Feed it scraps and guesses and it reasons like an intern on their first day. Garbage in, garbage out was true before AI.

3. Execution. Give very specific direction.
Vague prompts get vague answers. "Build me a comp map" gets you something generic. "Build me a comp map from our sales and lease comps tabs, color code every pin relative to our offer price, red for subject, blue above basis, green below" gets you exactly what you needed in thirty minutes. The specificity is the skill. It is the same instinct a good project manager has always needed, just now applied to something that will actually do exactly what you tell it, no more and no less.

You need all three. Having all three at once means blending two skill sets that almost never live in the same person. Understanding programming architecture. And understanding the minutiae of real estate operations. Most technical people do not know real estate. Most real estate people do not think in systems. I have spent my life building both sides, coding since 8th grade and inside this business since I was seven, and that overlap is the actual reason I can see a gap most people cannot.

That is the actual skill gap in AI right now. Drop the exact prompt you'd use to fix a vague one, let's share to level up!

Turning 40 on My Own Terms

Kristina Chang — Tue, 29 Sep 2026 22:40:16 GMT

I turn 40 this week. No big trip, no party. Just a very specific wish list: time with my husband, my daughter, and my 99-year-old grandmother, and as much time in the water as I could get this summer.

I picked up surfing 15 years ago and have spent most of that time being mediocre at it. This year, for the first time, I set out to actually get better. Best surfing shape of my life and best turns I have ever done. And of course, in between swells getting as much dog surfing in as possible.

I got there.

Nobody needs to peak at a sport in their 40th year. That was never the point. The point was choosing, on purpose, what I wanted this birthday to actually be made of, instead of what a milestone birthday is supposed to look like.

So this is the whole update: a great day with the three generations under my roof and the best surf sessions of my life this summer. That is the entire achievement. I will take it.

Turning 40 feels good when you spend it on the things you actually love instead of the things you think you are supposed to want.

What did you choose to spend your last big birthday on, once you stopped trying to impress anyone with it?

Wednesday Real Estate 101: The NNN lease

Kristina Chang — Tue, 29 Sep 2026 22:31:01 GMT

There is a reason the most boring lease in commercial real estate produces some of the most predictable income. It is called the triple net lease, written NNN, and once you understand it you start seeing it everywhere.

Here is the structure. In a triple net lease, the tenant pays base rent plus the three nets: property taxes, insurance, and maintenance. The landlord's rent comes in net of those costs, which is where the name comes from. The tenant carries the operating expenses, not the owner.

Contrast that with the two leases you have probably signed in your own life. A gross lease, common in office, is the opposite: the tenant pays one number and the landlord covers taxes, insurance, and upkeep out of that rent. A modified gross lease splits the difference, with some costs passed through and some absorbed by the owner.

Here is why investors love NNN. Your income is insulated from expense inflation. When property taxes jump or insurance premiums spike, and lately they have, the tenant absorbs it, not you. Your net rent is close to your actual return, with far less operational drag in between. For passive investors, that predictability is the entire appeal.

Here is why tenants accept it. They get control of the space they operate from, usually on a long single-tenant lease, and they would rather manage their own costs than pay a landlord to do it.

One thing to watch, because the word net gets oversold. Even in a triple net lease, the owner is often still responsible for the roof and structure, and you always carry the risk of vacancy and re-leasing when the term ends. The truly hands-off version is called an absolute NNN lease, where the tenant takes on essentially everything. Read which one you are actually buying.

Most of our IOS leases are net leases for exactly this reason. Low capex, the tenant maintains the yard, and the income that hits our investors is close to the income on paper.

What is your preference as an owner: the simplicity of NNN, or the upside of controlling the expenses yourself on a gross lease?