Why This Developer Shares Everything Online—and How It Landed Him a $40M Project

Aviva (00:00)
This week's listener of the week is Tales of a Landlord. Tales, thank you for leaving us a five star review. And for those of you listening, if you leave us a five star review below, you might be next week's listener of the week, week, week. This week on Commercial Real Estate Secrets, we have Zach Molzer. Mr. Molzer.

is the CEO and founder of Molzer Development, Zach. Thank you for being on the show today.

Zach Molzer (00:32)
I'm very excited. Thanks for having me.

Aviva (00:34)
I know the listeners are excited for this one. Let's jump in. Who are you? Where do you hail from and what do you do?

Zach Molzer (00:42)
Yeah, I'm Zach Molzer CEO and founder of Molzer Development. It's a multifamily development firm here in Kansas City. Born and raised here, right in the heart of the city. Love it here. Went to college in Nebraska. Worked for an owner operator developer for a couple of years and then ⁓ decided to go out and start my own firm. So I left, started my firm last March and here we are.

Aviva (01:05)
So you're working on a really cool project right now.

Zach Molzer (01:08)
Yeah, we're going to a few, definitely the main one is the Aladdin, 100%.

Aviva (01:12)
Talk to me about the Aladdin. How did you find it? And...

Zach Molzer (01:16)
I've been

tracking the Aladdin for probably eight months. Just finally just got to the right place, right time. But the Aladdin is a hundred year old historic hotel built in 1925. I'm completely converting it to apartments. So gutting out everything, all the non-historic items in the building, four, three to 15 basically. When it's done, it'll be 122 apartments, a top floor cocktail bar and about 20,000 square feet of amenity space. So it'll be pretty cool.

Aviva (01:43)
I know you said you were tracking it, what brought you here? How did you find the Aladdin to be the home of this development?

Zach Molzer (01:51)
just right place, right time of pricing, seller expectations, guidance, him finally resonating with me and understanding what my vision was for it and ability to execute. You know, that goes a long way. That's not my secret that I'll share later, but that's one piece of advice I could give is if you have ability to execute and act quick when things come around, then the world is your oyster.

Aviva (02:13)
Time kills deals.

Zach Molzer (02:15)
Yes, indeed.

Aviva (02:17)
So talk to me about dealing with a historic property, what that looks like tactically as a developer.

Zach Molzer (02:24)
it's fun. Basically take a regular development project that obviously has its own stress and brain damage and then involve more governmental agencies and state officials and all of that. It's interesting. It's well worth it at the end, obviously you get tax credits for it, but the basic structure of it, there's a couple different ways to utilize the tax credits, but what we're doing is we're bridging the tax credits. So we got our senior lender bank construction loan, and then we bridging both our state and federal tax credits.

Aviva (02:33)
Yeah.

Zach Molzer (02:50)
as cash injection equity up front. So our capital stack is roughly 50 % bank loan, 30%, 35 % historic tax credit bridge loan, and then the remaining 10, 15 % of equity.

Aviva (02:52)
Hmph.

That's cool.

Zach Molzer (03:04)
Yeah, so you got the state and the federal tax credits and every building is different in terms of what is historic, what's not historic, what your plans are, what you want to do. So there's a three part process, a part one where you submit if the building's on the registry.  Thank God the Aladdin already was, otherwise that process takes about nine months. Then the part two, you submit your plans for the building. Hey, here's what I'm going to do. Cost of renovation, et cetera. And then once that's approved, you can start construction, do whatever you want. Not whatever you want, whatever the plans say you can do.

Oftentimes they come back with you and say, you're good, but fix this or hey, you're good, but we want to see more information on that. Once you're approved fully, then you build, you reconstruct, et cetera. And then at the end you get a part three. They walk through and they check the National Park Service for historic standards and walk through and make sure everything's kosher and good to go. And then you get your part three.

Aviva (03:53)
So you got the tax credits because of the designation as a landmark.

Zach Molzer (03:59)
Correct, yes, the building is ⁓ on the National Registry of Historic Places, therefore it can get historic tax credits.

Aviva (04:07)
Is it haunted?

Zach Molzer (04:09)
I've only heard one ghost story. So Greta Garbo stayed there. Apparently there's a ghost story about her, but I haven't seen anything and I've been there every hour of any day of week. So I have not seen any ghosts, but I think it'd be kind of cool if it was.

Aviva (04:25)
Hey. No, I love it. I was just threatening going to the Stanley Hotel. We're in Denver. You know, the Stanley Hotel never stayed there. ⁓

Zach Molzer (04:32)
Yep. I was at my sister got

married at the Elms Hotel here in Excelsior Springs in Kansas City and that one's haunted. We went on the ghost tour or whatever with them. cool. Yeah.

Aviva (04:43)
That's fun. So

you're planning this is all residential conversion, then with some, you said a bar elements of retail. Do they do any affordable housing or this is just the benefits of living in Denver?

Zach Molzer (04:59)
In Kansas City, are affordable housing requirements. Historic tax credits are exempt from the city code because obviously the costs rehabilitate, et cetera. Now the Aladdin project's a little different. We will have 10 % of our units set aside to 60 % AMI, so those affordable. And then technically speaking, all of our units will be naturally affordable. So in the eyes of a development and developer, it's market rate housing.

Aviva (05:06)
Hmm.

Zach Molzer (05:22)
But just based on the price point of the comps, in theory, no one will be spending more than 33 % of their income on rent. Therefore, in HUD standards, it's naturally affordable. Yeah. Yeah, that was nice.

Aviva (05:35)
Cool. Good for you.

So, you know, age is just a number, but you're a young guy. How do you get over the fear? know, development is literally a huge chunk to bite off and a lot of pressure. How do you get over the fear and the pressure at such a young age?

Zach Molzer (05:44)
Yeah.

That

part never scared me. I'm just a confident person. I believe in my abilities especially to put together the right team for a specific project. That part didn't necessarily scare me. It's just all the moving pieces and pieces of the puzzle you have to put together. I think it's not just me. I have partners from Milwaukee. I have 38 investment partners. Your architect, your general contractor, your subs, your engineer, all the tax credit consultants. We have eight attorneys, accounting, legal. There's a lot of moving parts and so you have to be able to

As a developer, it's not a hard job. It's just as long as you're good at herding cats and putting all the pieces together, then it can be highly rewarding on a lot of different fronts.

Aviva (06:38)
Speaking of herding cats, construction prices are all over the, all over the, what are you doing to combat that and to be able to confidently underwrite?

Zach Molzer (06:49)
Yeah, mean, upfront was really important to have a very large contingency. Both from just a development standpoint and be especially a historic development standpoint. When you first go in there, you're making a lot of assumptions of, OK, I think there's the columns this size, right? You think the walls right here. you don't get to know all that until you start construction, which you can't start until the part two has been approved. So therefore, you're already you're already you're already all in at that point in theory.

Aviva (07:09)
Wow.

Zach Molzer (07:17)
So just making sure you hold a strong contingency, working very closely with the general contractor and being not just meeting at the OAC meetings every week, actually being involved. I mean, I'm on site every day, making sure everything's going kosher, we're staying on time, on budget, et cetera. But yeah, there's gonna be hiccups, there's gonna be delays, and there's gonna be overruns. So just plan for it upfront, and make sure you've got enough money in the bank account to keep things funded.

Aviva (07:44)
You know, they say development is very cyclical.

Zach Molzer (07:47)
They I've never seen a movie where the developer's the good guy.

Aviva (07:50)
At least you know that now. Yeah, we're talking about like farmers. Farmers don't really like people when they show up with a colored shirt because they think you're just here to ruin their farm. you know, developers get that rap. But development is cyclical. ⁓

Zach Molzer (07:54)
Facts.

Mm-hmm.

Yep.

Aviva (08:13)
You know, what we have seen in our market is that when interest rates flipped in 22 is the beginning of the end of our development market. Obviously, the projects that already had shovels in the ground are still going and there are exceptions to every rule. Are you finding development? ⁓ There's a lot of other development around the Aladdin or what are you seeing in?

Zach Molzer (08:40)
There's I mean,

there's $7 billion for the projects planned and we'll be starting construction over the next year and a half, two years in Kansas City. There's tons of different projects going on, whether that be databases, hotels, apartments, mixed use retail office, etc. We have a housing shortage in the United States. It's a fact. Kansas City has a housing shortage. We need a lot more housing. There are big projects breaking ground this year and have been breaking ground, but there hasn't been over the past couple of years. So, for example, in 2026, the Aladdin will

be

one of the only apartments that turn online within the downtown urban core of Kansas City, which is great for me, great for the 122 new residents, great for the city, but at the same time, that's not enough, right? know, when demand's outweighing supply, that's a problem, and that's when you get rent increases and higher payments, et cetera, which leads to unaffordability, you know? And that's a problem macrally with everyone, not understanding supply and demand and...

If you build more apartments and build more housing options, then rents go down and all that because costs aren't going anywhere. Interest rates, no one knows. So there's definitely projects happening, but we need a lot more. And that's not just Kansas City, it's everywhere. I feel very confident about Kansas City's pipeline. We have the highest rent growth in the country right now, year to date this year, sitting at about 5%. And for a tier three, tier four city, that's

Aviva (09:54)
well.

Zach Molzer (10:00)
A traditionally stable market that's not very volatile having the highest rent growth is both good and a con. Con meaning we need more housing. Good if you're under construction right now or you're in the planning process. I always tell people if you can make a project math right now in development, which is hard, if you can make it math right now, whether that be a discounted rate on land or building or you have a good relationship with the GC and they can come in on the deal and do things that cost or.

delay fees, et cetera. But if you can make it work right now, I think in the next three, four years, you're going to be sitting in a very, very good spot, both financially and in the eyes of the city.

Aviva (10:37)
You should become a city planner.

Zach Molzer (10:38)
I've done so many stupid things

over the past 23 years.

Aviva (10:43)
I'm joking. The whole joke comes from like, I wish city planners just knew more, you know, could.

Zach Molzer (10:51)
I think everyone should have to take a test of

like council members and city staff and reviewers. Everyone should have to take a test of like, here's how the basic fundamentals of development works. Like at the end of the day, I was in a meeting with council members and staff and I was like, guys, like you're not going to want to hear this, but I'm just going to shoot you straight. Cause that's kind of my mojo is be transparent. It's like developers don't do development unless they're making money. I was like, it's an investment. have 38 investors that said, Hey, this is an alternative asset that I can invest in.

that I think is going to generate me X return. Now that X return, that's what has been shifted over the past, you know, 10, 15, 20 years and technically all of eternity. But whatever they want from a return standpoint, if they can't get that in Kansas City doing a development, they're just going to deploy their money elsewhere. So how do you get them to deploy it here? is don't cut the red tape. Don't make it a pain in the ass. Go get a permit. It shouldn't take three months to get a permit. Don't understand incentives. Understand that a TIF

Aviva (11:38)
Yeah.

Zach Molzer (11:51)
is not a tool that lines my pockets. It is a tool that helps the project even get started or even remotely feasible. Tax abatement, same thing. There's a lot of different avenues and I wish that that was more understood as opposed to, they just got a 25-year abatement. They're just taking money from the schools. It's like, okay, no, the schools are going to be getting paid over the next 25 years and then beyond. The school's not making anything right now on this deserted vacant building. So it's just a bad argument.

Aviva (12:18)
Wow. How long has it been vacant for?

Zach Molzer (12:22)
The Aladdin closed down March 17th of 2020. COVID.

Aviva (12:26)
Wow, that's cool. I'm kind of a history nerd, that's badass. Now, let's talk. About a year ago, you posted a picture on the internet and you became the face of real estate Twitter. Can you tell me about that? What in the world happened?

Zach Molzer (12:28)
Yeah.

I did.

Yeah, so I was flying up for the real estate gala, which funny enough is in a week from today. I don't know when this will air, but it's April 22nd right now. And so I was flying up to New York City for the gala. I had a really good idea to have a Kansas City Airport breakfast bowl. It's like a barbecue breakfast bowl thing. my thoughts were, just so everyone's aware, is I knew I had a really busy day planned, right? And I guess for some reason it just didn't register in my head that in New York City, you are

Aviva (13:03)
You

Zach Molzer (13:15)
a block from anything you could ever want to eat or not even just eat anything, right? But I was thinking, oh, I'm going to be busy day. I'm to be running around. I'm not going to have a lot of time to eat. Let me have a big breakfast so that it gets me through the day. So I did that and yeah, hit on the airplane and I got food poisoning was bad. I will spare the details, but let's just say the Uber ride was not fun. The walk was not fun. I was laying in a hotel lobby bathroom with no clothes on. A lot of my real estate Twitter friends

their first impression of me was picking me up naked off of the bathroom floor because it was bad. It was not good. So yeah, that happened. What was so cool about that and what I've talked to the people about is that yes, that moment like helped me go viral, right? And put a face with everything that goes on. But what was even cooler was the fortunate timing of everything of that happened. And then right when I got back, I then got to tell people, hey, I just bought this building. so then it was, they had then had a

Aviva (14:10)
Yeah.

Zach Molzer (14:12)
Yes, they were following me because the funny guy who almost died at the airport then translated to, my God, this 23 year old is doing a $40 million redevelopment of his old building. That's cool. Let's follow along that. So I feel like I've done a good job of transitioning that into it. I still obviously understand that I'm all going to be the guy that was all sweaty and almost died in the bathroom. But at same time, people know me now for Kansas City, for historic redevelopment, all of that, the whole nine yards.

Aviva (14:39)
As someone who is obsessed with the intersection of marketing, media, and commercial real estate, it was genius. I know it wasn't intentional, but it... ⁓

Zach Molzer (14:41)
who is obsessed with the intersection of

No, I wouldn't do it again, to be honest with you.

Like if it was someone was like, hey, you can get food poisoning again and do the same thing all over again. was like, I'd be at the hell. No, it was horrible. I thought I was dying. Remember I call my mom. was like, I love you, mom.

Aviva (14:59)
No.

This is it. Why'd you post the photo? So for the listeners who haven't seen it, you take a photo of yourself and you're like probably on a toilet sweating really bad.

Zach Molzer (15:05)
Yeah, this is it.

I

was, I was, I just got him puking. Yeah. I was doing the, like the swivel, you know, I won't again, spare details, but the, yeah. Up and down, up and down. And, I showed everyone like at the gala and everything, cause I didn't get to go up, but I showed everyone the next day when I felt a little bit better. And Don Tepman was like, you have to post this. It was like, dude, like, look at me. I look like I look horrible. He's like, I'm telling you, he's like, that's, that's your whole brand, right? Is being honest, transparent, open. goes, this is going to

Aviva (15:17)
Okay, sure.

Wow.

Zach Molzer (15:41)
This is going to play off well for you and it did.

Aviva (15:45)
I didn't, that's a really interesting piece. The Don himself. Wow. That's amazing. Good for you. I'm excited for the gala. I'll see you there. See you on the dance floor.

Zach Molzer (15:48)
Yeah, Don told me to post it. He's like, have to.

Yeah.

Yep, fun, Yeah,

we'll be good time.

Aviva (16:00)
⁓ I wanna talk about something, you know, with media and social media. You know, it's

Super taboo to talk about commercial real estate online. Specifically with development, you almost see no developers pursuing commercial real estate content, which is probably the exact opposite of what they should be doing. But you do. Why? When did you decide that was going to be your shtick? And have you gotten pushback from other developers?

Zach Molzer (16:31)
necessarily push back from other developers. decided that the same reason he says no one does it right. And why not be different where most developers are 50 to 65 year old white dudes that have done things the same way for 30 40 years. We're entering a new era where we can leverage. have we have a tool that they didn't have back then where I can hit a button and reach a million people like that. Whether that be investors whether that be potential projects whether it be getting on this this awesome podcast like that wasn't a thing and so

Leveraging all the different people and networks etc to be able to get to the reach those people is important Building in public I think is really cool because you get to tell a story along the whole way of a project of hey This is not just oh Let's just spend some money throw it up and it's apartments. It's done fleece out Zach makes money and everyone's happy like that's not how it works There's a lot of things that go on behind the scenes during there's problems There's solutions the whole nine yards, and I think it's really cool to be able to show people that

Because then when someone is partnered with me on a project in the future, whether that be a general partner or an LP, whatever that may be, architect, engineer, GC, they know exactly what they're getting, they're, who they're working with from a transparency standpoint to how my brain operates, how I function. and it, it just makes sense. it also is really cool to be able to leverage in a sense with the city of like, Hey guys, I have a following. have people that are, that know are now about Kansas City because of me. Let's.

Aviva (17:30)
Yeah.

Zach Molzer (17:56)
help this process and refine it and make it better so we have more investment dollars getting funded here, right? It's obviously a slow burn of like change and reform and how that's all going to play out, but it definitely won't hurt.

Aviva (18:09)
And it's not insignificant. It's very, very real. And you have like data to back it up, which is pretty bad ass. It's like you said, right? Marketing before we could look at the insights of our social media. You didn't know how many impressions you were getting. Now you can say, at just the visibility I brought to the Aladdin alone.

Zach Molzer (18:11)
No, no, not at all. 100%.

That is true.

Exactly. And it just happens to be a really cool project, a cool story and all that. But at the end the day, what I've learned is people follow people where they're following the Aladdin project because it's a cool project, but they're also following the personality behind it. And although I have a massive and unbelievable team behind me, they're following me with the story with the team that's being able to showcase it all.

Aviva (18:49)
And it builds trust.

Zach Molzer (18:51)
Yeah, 100%.

Aviva (18:53)
People see you every day. They see you on site, being real, and they trust you. And yeah, it's cool. ⁓ There's a lot of opportunity there, and I'm excited to watch it unfold with you.

Zach Molzer (18:58)
100%.

A ton.

A ton. This is the first of many.

Aviva (19:08)
So tell me you have identified another project you may be working on.

Zach Molzer (19:10)
Bye.

Yes, I'm under contract to buy another building here in Kansas City. Another old building, not using historic tax credits, but it'll be lofts, very mixed use, lofts, bar, rooftop, cool little speakeasy thing and some office slash retail. So very mixed use, but it'll be pretty cool.

Aviva (19:30)
Amazing. When do you anticipate to deliver the Aladdin?

Zach Molzer (19:31)
Yeah, it'll be fun.

⁓ May of 2026, so about 13 months from now. Yep, end of May, maybe sneaks into early June, ⁓ but our timeline is pretty tight. We feel pretty good.

Aviva (19:38)
Okay.

Amazing.

Maybe you can get Dawn to have the gala at the Aladdin next year. Okay.

Zach Molzer (19:50)
No, I'm going to do a different event there. Just trust me. I've already

got it all planned out. I've just got to keep things chugging along before I send out a date because it's kind hard to send out a date on a development project when you're still a year out. trust me, I've got something planned for all my Twitter folks and it'll be fun of that.

Aviva (20:07)
Amazing. So one of my favorite questions, and I'm excited to ask you this because you're just such a young new perspective. What is your commercial real estate secret?

Zach Molzer (20:22)
You know, Bob Knakal always says, it's not about what you know or who you know, it's who knows you. I would say, I would kind of echo that and totally agree with it. I would say people don't truly at like people completely underestimate the power of being able to act quick and have the right partners and people in mind. You know, this project I'm getting ready to do, it was right again, right place, right time. I had a day to be able to figure it out and it was, I made two phone calls and got it figured out.

And so like that's extremely important from a capital standpoint to be able to say, Hey, I got this project. We'll talk about how the splits are going to work later, but I need 2 million bucks. You in? Yeah, I'm done. Let's do it. And having those relationships and, trust with those people is crazy. And that, that, that just speaks volume to, know, you are who your network is. And you can do anything you want. You know, you can just do things. You just have to build trust and give up, give up a lot to get started.

I always tell people like, I'm not gonna make any money on my first three or four projects, but that sets the foundation for the next, right? The whole goal of what I'm doing right now is to make everybody that supports me right now, both financially, emotionally, physically, etc, to make them worth the buck and make them happy, because then they'll be supporters forever.

Aviva (21:40)
You heard it first from the man himself. Zach, thank you for being on the show today. Yeah.

Zach Molzer (21:45)
Yes, thank you so much for having me. This is awesome. If you guys

wanna follow along, Molzer of Development Instagram account. I'm starting to do more reels and stuff on there. Obviously my LinkedIn and then KC Molzer are on Twitter. So definitely where you find me.

Aviva (21:59)
Zach, appreciate your time today. See you next week, 100 stories up. And for everybody listening, we'll see you next week.

Zach Molzer (22:01)
Yes.

Thank you.