♪ - Hello, I'm Nido Qubein.

Welcome to Side by Side.

My guest today is a real estate developer whose impact can be seen throughout North Carolina.

As Chairman and CEO of Lee-Moore Capital, Kirk Bradley is leading major real estate and development projects across our state.

Funding for Side by Side with Nido Qubein is made possible by Coca-Cola Consolidated makes and serves over 300 of the world's best brands and flavors to over 65 million consumers across 14 states and the District of Columbia.

With 17,000 purpose-driven teammates, we are Coca-Cola Consolidated.

The Budd Group has been serving the Southeast for over 60 years.

Specializing in janitorial, landscape, and facility solutions, our trusted staff delivers exceptional customer satisfaction, comprehensive facility support with The Budd Group.

Truist, we're here to help people, communities, and businesses thrive in North Carolina and beyond.

The commitment of our teammates makes the difference every day.

♪ - Kirk, I'm so happy to see you on this program.

You, I have followed you for a long time and you have done some amazing things in our state.

Not the least of which, of course, is that you're a highly regarded real estate developer, industrial real estate, commercial real estate, anything but apartments and housing.

And yet, what I admire so much about you is you give so much of your time to the service of our Tar Heel State.

As an example, you are on the North Carolina, University of North Carolina Board of Governors, for example, and you're also the, on the board of vice chair, I believe, of the board of NC Innovation, which is the creative arm now that is investing money in these startups with faculty and others who have great ideas in technology and other fields.

So, we can talk for an hour about all the things that you've done in the state, you continue to do in the state, but let me begin by asking you this question.

You enjoy serving on the Board of Governors of UNC System?

- Very much.

It's been a true honor to serve, and I love the people that are on it.

I love the people at the system office and all of the campuses, getting to know each of the 17 campuses.

We have 16 universities and one high school, and, well, one is a high school and a college, the School of the Arts, which you're familiar with, but it's just great to see each of their missions and what they do in each of their communities to make their communities a better place.

- You know, one thing I've always been interested in in the system is that these universities in the main are limited to X number of students they can have from out of state.

What is the logic for that and why?

- Well, we've altered that over the last few years in some of the, like, Elizabeth City State and Western Carolina that are in closer to other states.

So, we've given them more latitude, NC A&T as well, but the flagship universities, the enrollment, we're allowing them to grow a little bit so they can grow their out of state, but the percentage has been the same because, you know, the legislature has been very generous.

Probably one of the best values in public higher education is the University of North Carolina system, any of the schools.

And so, we, you know, particularly at the flagship schools, we like to keep, make sure that there are spots for our citizens.

- And we are respected nationally and internationally for having a great system.

There's no question about that.

And education in the UNC system is a valued education.

It has a lot of impact in people's lives.

You were born in Georgia though, right?

- That's correct.

- But your grandparents are from North Carolina.

What is your connection originally to North Carolina?

- So, my mom and dad were both born in Sanford, North Carolina, Lee County, and they grew up there, went different paths, met, and they eventually, they moved to Atlanta right before I was born.

And then I moved back here to go to graduate school and then went to work in my mother's family's business, which was Lee-Moore Oil Company, then Lee-Moore Capital Company now.

- And you received an MBA from Duke University, I believe.

- That's correct, yes, sir.

- So, Lee-Moore Capital Company does what?

You are the Chairman, President, CEO of the Lee-Moore Capital Company.

- So, we're a real estate development company.

We were in the gasoline and convenience store business until 2006, industry changed a little bit.

- And you owned the pantry at one time?

Was that part of it?

- We were part of the pantry.

My uncle helped start the pantry with a gentleman by the name of Sam Warnham, who went to East Carolina University, so another university system connection.

But we got out of that industry in 2006.

We kept the real estate, which were single-tenant lease buildings, very popular form of that asset class.

And then we decided to be in the, be geographically specific, but sector differential.

So, we do hotel, we have partners.

We aren't necessarily the direct involvement, but we're investors and partnered in hotels, industrial, self-storage.

We do do multifamily as part of our mixed-use projects.

We're doing a big one in Pittsburgh, North Carolina, called Mosaic, which is part of the larger Chatham Park development.

- So, Mosaic, when you say a big one, what does that mean?

What's, describe it for us.

- So, it's 44 acres, about 750,000 square feet.

We'll have 500 units.

Has the first hotel in Chatham County.

There's been no business hotels, so there's now 121 Keyhampton in there.

We have restaurants, we have office, and retail as well.

- And you build it and then lease it, or somebody else is responsible for that?

You're simply, you're subcontracted to construct it.

- So, we build and own most of the buildings, but we will sell individual lots for others.

There's about 19 lots on this 44 acres for different size buildings, from single-story retail all the way up to six-story retail with multifamily over it.

- But who's in charge of attracting the leases?

- My team does that.

- Oh, your team does that?

- Yeah, so we're trying to curate that.

And then, for instance, we found someone that wanted to be a owner-occupied dental building.

We sold that to them.

They're leasing some other space to them.

So, we will work with third parties, but they use our design and build the building that we want there.

- Well, you are heavily involved in real estate.

You certainly are an expert in that field.

What are the fundamentals you look for when you say, "We are gonna build this," or, "We're gonna invest here"?

What are the fundamental elements you look for, economically, socially, ecologically, whatever?

- So, really look for growth and obviously take advantage of existing infrastructure.

For instance, Mosaic is at the intersection of 15501 and US-64, so two major roads.

It's an area that is not developed in Chatham County because they didn't have water and sewer.

Worked with the Chatham Park team to get water and sewer there, so have that sort of infrastructure to allow us to grow.

And so, those are the things we look for.

But like to be in areas, typically we're creating a market versus going into Manhattan at 5th and 50th and building a building where you already know there's a lot of people there.

We're typically on the edge in urbanizing communities like Lee and Chatham County, working very actively with economic development and the education folks.

So, that's where my civic work kinda started is that education and economic development go together.

If you do that, you get the growth.

Then you need things like industrial parks and self-storage and multifamily and mixed use.

- How does, how do economic development and education come together?

- So, in short, the old cliche, education is economic development.

If you don't have a workforce, you are not going to have a great, it's gonna be hard to recruit people here.

So, having a good K-12 system, the community college system, as well as a university system to get the talent at all levels.

- And I saw somewhere that you're chair of the Central Carolina Works.

- Yes.

- What is the Central Carolina Works?

- So, this, the community college in our area, so Chatham, Hornet, and Lee County is Central Carolina Community College, so a three-county system.

And we work with them to take advantage of the Career and College Promise Program, which is if you're a K-12 student, you can attend community college for free until you graduate.

And so, we took that from 5% participation to about 50% participation.

- Is that a state program?

- It's a state program open to any student in the state of North Carolina.

And it allows, what we wanted to do is get them on their career track, be that career and technical, where they would get an associate's degree, become a welder, HVAC tech, or do their two years before they went to a university system or High Point College and finish up.

And so, that was what CC Works was all about.

And we were able to get the participation up very dramatically.

And about two-thirds of that was career and tech, which was terrific because a lot of the jobs that we've been able to create in Chatham and Lee are for people with community college certification.

They don't necessarily have to have a university degree.

- As you all know, the Tar Heel State is growing measurably, both in population and in attracting companies that have a great need for workforce.

I know you're involved in all of that.

I know that you are not a casual observer, but a very intense observer of what's happening.

What is your take?

Are we hitting a saturation point of bringing in companies that we cannot support in the workforce, or with housing, for example, or with infrastructure like highways or rail or whatever?

Or do you think we have a great appetite for significant growth moving forward?

- Well, I'm an optimist and an entrepreneur, so I'm a believer that we have unlimited growth potential.

We'll be the seventh largest state in 2030, but we've got to make investments.

We've got to make investments in all the things you said, that road infrastructure, power infrastructure now with data centers, as well as water and sewer.

Been fortunate that our General Assembly has been generous in doing that and putting those kind of investments in the right places.

But when it comes to the human talent, we are uniquely blessed here.

With all of our public and private universities, with our great community college system, we really have a workforce development machine.

Our job is, we've got to, we think in terms of market share in business, and I know at one point in time that 80% of the students from A&T were going to work out of state 'cause that's where the jobs were.

Now we have those jobs here, so what I want to do is flip that and maybe 20% go work out of state, but we retain 80%.

And I think that we have the ability to do that, our military, Fort Bragg and Lejeune and other places, we can absolutely fill the needs of any company that wants to come here.

We're probably unique in that, in the country, where we can generate the workforce if we have the jobs.

- And when I look at North Carolina, I've lived here for practically all my life, there are these centers of commerce, Charlotte would be one, Charlotte-McLiburn County, Raleigh would be one, perhaps the Triad is one.

But then we have a lot of rural areas as well that have great needs and perhaps are semi-met or not met.

I'm thinking about medical and dental and technology and other available resources in rural North Carolina.

What is your take on all that?

- Well, it's certainly a challenge.

Clearly between '77 and '95, things are going pretty good.

Outside of that, it was a challenge.

Certainly it was a challenge in the West before the Haleen, even more so now with the infrastructure we've got to rebuild there.

But we need other infrastructure East of '95.

And now it's one of the reasons for NCI.

It's an opportunity to take the-- - NCI North Carolina Innovation.

- NC Innovation, to take that.

And we've created these hubs across the state.

And hopefully we can create companies that will stay there and employ people.

And once we get our NC Innovation makes grants to get them through the Valley of Death.

But we've also set up these hubs and I call those pollinators.

We do a lot of bee work.

We've got 500, almost half a million bees at Chatham Park.

And that's what these hub directors are.

Because as you know, researchers, you see it on your campus, they're head down doing their work, taking care of their families or their lab and their students.

And they don't really have time.

And there might be someone in the next lab over doing something that's synergistic and they don't know who they are.

So these hub directors can be pollinators, helping connect them either on campus or across the campus to do things that will create jobs.

Hopefully, in places like Greenville and Pembroke and other places across our state.

- For those who may not know what NC Innovation does, give us a brief overview.

- So we were fortunate to get 500,000 endowment, 500 million, excuse me, endowment from the state of North Carolina.

And we get to spend the interest on that.

- And some private money on top of that.

- And we raise private money that helps take care of the overhead.

And we do two things primarily.

We make grants.

The biggest grants are focused on what they call the Valley of Death, which is a technology level where you get from sort of discovery and ideation and discovery and actually turn it into a commercially available-- - Who came up with this term, Valley of Death?

- So I think it's a term of art that the venture capitalists did because they said basically, "We're gonna invest on the other side.

"So if you can show that this is scalable, "we'll put real money behind you," which is a technology level six.

That's a technical definition that the science and technology folks created.

And so three to six is where all the problems start.

People can find the money to get one and two, but when they get to three to six, there's not a lot of money.

And so that's where we're investing our money 'cause that's the place where they can go to commercial venture capitalists.

The other thing are these hubs.

We've got seven hubs across the state.

We're in Charlotte, we're in Wilmington, we've got one at Fayetteville State that's focused on defense.

And so it's doing, these hubs actually bring resources and introduce some of the researchers to try and help them be more successful.

- And these grants are funded by only part of the revenue that comes from interest and so on from that endowment of 500 million.

You're not spending any of the corpus.

- That's correct.

- So roughly 20 million, 25 million a year.

- That's correct.

- And then the private money pays for all the administrative costs.

The taxpayer money is not involved in that.

- That's correct, yes.

- So your hope is what, Kirk?

Your hope is that someday they'll become a much larger corpus or that you succeed so much that the legislature would double the money and create more opportunities for these companies that can come to be?

- Well, we certainly see a need for spending about 100 million a year on these.

We're spending about 20 to 25, as you said.

Takes about five to seven million.

- So that's two and a half billion dollars in corpus to create that.

- Or grants, direct grants, if they gave us that.

There's other ways of doing that.

Endowment model would be two and a half billion.

But one of the things, we talked about our mutual friend, Kelly King, who's the chair, and we talked about is the fact this rural-urban divide.

And we've got 100 counties in North Carolina and the 2020 census, about half those counties lost population.

So we hope, Kelly and I-- - Half the counties lost population.

- Lost population.

People migrated to places where there are jobs and there are better lifestyles and so on.

- That's correct.

And so we're hoping that maybe one day that we can help, that NCI can be helped, that when we do a census and all 100 counties gain population, that would be a real measure of success of this program, because we're creating jobs in those communities.

Be that at UNC Pembroke or East Carolina at Greenville or other campuses across the state.

Western Carolina and Cullowhee.

So we're very hopeful.

So that would be a success.

So more money and population growth and attracting them.

It takes infrastructure and time and medical's a part of that.

Our university, we run the health system, both ECU Health and UNC Health, and getting them to work and deliver healthcare to the rural communities is important.

I'll digress a minute, too.

We just gave a grant to a researcher at UNC who's developed a mammogram.

There's a lot of OBGYN deserts in some of our 100 counties.

And this device can be, someone can be trained to do a mammogram, send that, review it using AI, and send it to one of our main campuses to help them with mothers who need that type of prenatal care.

So NCI, university system, UNC Health, ECU Health, are all doing things to help those parts of our state that are not as blessed as some of the more urban areas are.

- There's so many areas I can talk to you about because you're engaged in so many areas, both in business and in civic work.

Let me ask you a couple of questions.

One, UNC system that you certainly serve on the board of, you have a great CEO there, President there, a terrific North Carolinian, a very talented man that you have chosen in that position.

Hans is a-- - Peter Hans, yes.

- Peter Hans is a remarkable guy.

We've seen turbulence on college campuses in recent times.

What bothers you about what happens on college campuses?

What worries you when you look at the UNC system?

What worries you about reputation, future view, evolving elements, whether they're academic or social or any other economic perhaps, et cetera?

- Well, I think the reason you go and get a university degree is to come out and be a better productive citizen.

And I'm not sure that that mission has been lost on some of our campuses.

We do a pretty good job, I think, across the board at the university system, but I think there's areas that could improve.

Obviously, some of our bigger campuses, there's a broader breadth and depth of ideas, and I think that's good, but I commented that some of the people that I know personally that have come here and how I could see that they were changed by the value proposition that you've created here at High Point, and I think that's important for us to do as a university system.

I do think that there are people on our campuses that have a worldview that is destructive, and that should not be on a college campus.

College campuses should be about optimism and how we make the world a better place, and you don't make the world a better place by eliminating people, which is very sad.

- It's about outcomes, right?

It's parents want their children to go to college, sometimes sacrificially so, financially speaking, and they want them to have jobs, start a business, or do something productive with their life.

Well, real estate.

You certainly know your stuff in real estate, and you're up to your ears or eyes in real estate, too.

We saw in this country in '08 or '09 a great recession.

I served on a bank board for many, many years, and I remember those painful days of what we called Oreos, other real estate owned that we didn't want anymore.

What is your outlook about real estate, perhaps in North Carolina, but widely, and what are the factors that you employ to manage risks?

- So, real estate is tricky because it takes place over a long horizon, and it's hard to predict markets.

We certainly did not predict that there was gonna be a policy prescription by the previous administration that was gonna create unprecedented inflation, and therefore the Fed had to raise interest rates.

Interest rates, everybody likes to talk about 1980 and how high they were back then, and that was true, but when you've had 20 years of 2% average interest rates and you more than double it to try and solve an inflation problem, it really creates issues in the real estate industry, so I'm hopeful that-- - Because of availability of capital and the cost of money and so on.

- Just the cost of money.

Debt is such a huge component of any real estate project that the cost of money, and while maybe-- - Typically what, Kirk?

25%, 20% debt?

- 80% debt, 60% debt.

- Sorry, I mean 80% debt, 25% equity?

- Yeah, something like that.

I mean, it can be, and now projects only pencil out if you're doing 55 and 60% debt, and that is such a change in the fundamentals of the capitalization of these projects it makes it very difficult, but we're lucky here in North Carolina, as we've discussed here already, the growth we're having makes up for, growth makes up for all problems, and so that's really the important thing.

- Volume matters.

- Volume matters, but interest rates and infrastructure, those are kind of two of the big things.

There seems to be a lot of demand.

I think this tariff situation, as it levels out and people get, which we're getting, I think, to the end of that, and people begin to see it will help a lot, I think the uncertainty will get people off the sidelines.

We've had lots and lots of interest in our industrial stuff, but nobody has pulled the trigger and made a decision, and I think that's coming here as we enter the fourth quarter of this year.

- And North Carolina's done, I think, a remarkable job in balancing out logistical and fiscal matters with attracting big business to our state.

I think in the Speedmont section of North Carolina region, Toyota batteries, Supersonic, Jet Zero, Honda, on and on it goes.

The potential growth in jobs, for example, is truly impressive, but as I said earlier, jobs without housing for people, without enough workforce, it's a challenge for North Carolina, but you're optimistic looking forward.

- Yes.

- About our growth and about potential.

- I think we've got the right sites, both in terms of large sites and small sites that can allow companies to locate here.

I think we can produce the workforce, and housing is a challenge.

We put a lot of obstacles out there.

I've got a lot of friends, maybe who not as, who have a different sort of outlook to me, and they wanna see affordable housing, yet they implement policies at the town, city, county level that make it very hard to do affordable housing because of all the things that they wanna see happen.

And it's a balance.

- Interest rates.

- Yeah.

- Environmental and rules and regulations.

I mean, it's very difficult.

We're making a lot of progress in that.

We're trying to add housing, and I think we have the opportunity to do that in North Carolina that, again, as you touched on, housing, workforce, and the sort of industrial properties and policies are unique.

- Yeah.

Well, Mr.

Kirk Bradley, thank you very much for your service to our state, and thank you very much for your leadership in business, and thank you very much for being with me on "Side by Side."

- Thank you.

I appreciate it, Dr.

Qubein.

You're always a pleasure to be with.

(upbeat music) ♪ - Funding for "Side by Side with Nido Qubein" is made possible by... Coca-Cola Consolidated makes and serves over 300 of the world's best brands and flavors to over 65 million consumers across 14 states and the District of Columbia.

With 17,000 purpose-driven teammates, we are Coca-Cola Consolidated.

- The Budd Group has been serving the Southeast for over 60 years.

Specializing in janitorial, landscape, and facility solutions, our trusted staff delivers exceptional customer satisfaction, comprehensive facility support with The Budd Group.

- Truist-- we're here to help people, communities, and businesses thrive in North Carolina and beyond.

The commitment of our teammates makes the difference every day.