David Goldfarb 0:00
There’s various components on the reason why we’ve been very, very successful. First, it starts off that the only facilities that we’re looking to move forward in our department stores inside malls. And the reason being over that is, is first and foremost over here is, generally speaking, you go to any mall in the country, and they got 6000 parking spaces, so you never have to worry about parking. That’s number one. Number two malls strategically were put in good locations, overall, where there is they’re very easily accessible to the highways. So this is also an important factor number three over here is you get the cross traffic of any mall, they can enter our facility from the parking lot, or they can enter our facility from the mall itself. So we’ll have we’ll have cross traffic on both on both variations. The fourth element being is we have an internal construction company. So we’re able to build these at a fraction of what these would cost if someone were to enter our industry. And I would say the the fifth element, which makes success very successful, is that we have these eight dimensional facilities that consists of every attraction under run under one roof, that also includes a full food and beverage menu to be able to serve, you know, all American food with about 60 to 80 television sets per location. So it’s like a sports bar atmosphere inside of an attraction venue. And we try to keep these people over there three, four hours at a time. And our next, our next pivotal move, because of the success is we will look to add movie theaters, as component to the venue. And these will be boutique movie theaters that you’ll be able to have, you’ll be able to eat and drink inside the theater. And there’ll be luxury style theaters that are that can range anywhere from six to eight boxes, about 50 people or so per per theater, and they will have the opportunity to really enjoy themselves because there’ll be in a luxury style setting. This will not be traditional movie theaters.
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J Darrin Gross 2:52
Welcome to Commercial Real Estate Pro Networks CRE PN Radio. Thanks for joining us. My name is J Darrin Gross. This podcast focused on commercial real estate investment and risk management strategies. Weekly we have conversations with commercial real estate investors and professionals provide their experience and insight to help you grow your real estate portfolio.
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Today my guest is David Goldfarb. David is the managing partner at Xtreme Action Park Elev8 Fun, EA Properties and Primetime Amusements. And in just a minute, we’re going to speak with David about the opportunities in indoor adventure parks.
But first a quick reminder, if you like our show, CRE PN Radio, there are a couple things you can do to help us out. You can like share and subscribe. And as always, we encourage you to leave a comment. We love to hear from our listeners. Also, if you want to see how handsome Our guests are, be sure to check out our YouTube channel. You can find us on YouTube at Commercial Real Estate Pro Network. And while you’re there, please subscribe. With that I want to welcome my guest David Goldfarb. Welcome to CRE PN Radio.
David Goldfarb 4:33
Darrin, thank you for having me. Um, I’m happy to answer all your questions and give you an idea of kind of the space that we’re in.
J Darrin Gross 4:40
I’m looking forward to it. Before we do get started if you could take just a minute and share with the listeners a little bit about your background.
David Goldfarb 4:48
Sure. My name is David T. Goldfarb. I’m based here in Miami, Florida. I started my company back when I was in college. I went to the University of Central Florida And I started with a company called primetime amusements. We are we are an arcade company where we operate arcade games in large hotels, bowling alleys movie theaters, primarily in the Orlando market as well as the South Florida market. I started that at the age of 19. And I’ve been doing that business ever since. So that was my first entrepreneur and gather
J Darrin Gross 5:26
Awesome. So you’ve been doing like you said all the amusement or not miss some of the the machines, I guess. The arcade equipment are carried, okay.
David Goldfarb 5:36
Arcade equipment, pool tables jukeboxes stuff that you see sports bars, stuff that you’ll see inside movie theaters, bowling alleys, hotels, we have the only arcade inside of McDonald’s on International Drive in Orlando, Florida. We have a 60 a 60 piece arcade room inside of a McDonald’s. That’s one of our most unusual accounts. It’s the most It’s the busiest McDonald’s in the United States, actually.
J Darrin Gross 6:06
Wow. That’s awesome. That’s good. Good for you. Well, sounds like you you’ve grown up in this business, then. You started with the arcade machines and in the business? Are you limited? Or do you primarily operate in the Orlando area or you said you’re in Miami,
David Goldfarb 6:27
where we operate not Orlando was South Florida, we also have a rental division. And we have a sales division. We’ve sold to over 40 countries all over the world. As far as as far as, as far as Australia, all the way to, to even China, where we sold equipment from? And that’s a large part of our division, which is based out of Fort Lauderdale as well. Wow. And chains to like bar mitzvahs and trade shows. That’s another part of our division under primetime.
J Darrin Gross 7:02
Awesome. And are you a distributor for the machines? Or do you you make any of the machines or
David Goldfarb 7:09
so we operate and we distribute, we do a combination of both. We mostly sell secondhand to the to third party markets. We just recently even fact even today, we just sent out a container to Ecuador.
J Darrin Gross 7:24
Wow. That’s awesome. That’s I mean, it’s kind of a part of the business that I don’t know that everybody thinks about, you know, you go to a bar and there’s a pool table and put your quarters and or whatever and play play some pool, but not necessarily thinking about all of the, the, you know, the connection, or how, you know, what are the different chains in the in the business there. That’s, that’s awesome.
David Goldfarb 7:45
That’s how I got started, actually. I started with three pool tables in a small sub shop in the university by the University of Central Florida. And that’s when I started doing that when I was 19 in college, my sophomore year.
J Darrin Gross 8:00
Oh, that’s, that’s so cool. That’s awesome. So clearly, you’ve grown beyond that. Tell us a little bit about what your business is now.
David Goldfarb 8:09
Sure. So that that really put us on a platform. And when I say a platform, it it it enabled us to eventually have our first family entertainment center or indoor Adventure Park here in Fort Lauderdale. It’s 160,000 square feet. And it encompasses go karts and bowling and arcade and trampoline parks and roller skating. And in 2019, we won the number one family entertainment center in the United States. And it was also my first commercial real estate purchase. So we actually bought the building and we operate inside the building. We do a combination of both. It’s also home to our offices have primetime amusements. So we have a 20,000 square foot office warehouse as well. And that’s where we do all our distributing from
J Darrin Gross 9:04
awesome. So the facility and 160,000 square feet that’s not a small retail facility is it all one story like a like a, like a warehouse industrial type,
David Goldfarb 9:18
tilt. So we were we were we were we were very lucky when we purchased the building. It was a it was a former warehouse, but it actually sat on a main road of i 95 which is on the eastern you know the Eastern the Easter Wade go all the way up from Miami all the way up to New York. So we were lucky we bought this piece of property because it had ample parking. And we converted a family entertainment we converted a warehouse to look like a family entertainment center or indoor Adventure Park. And it started off and as as growth. We didn’t we don’t we have a much bigger platform than we started off with. We started off with about 85,000 square feet. And then it eventually grew into 160,000 square feet.
J Darrin Gross 10:07
So did you add on a build, build an add on yourself? Or was there space available? So
David Goldfarb 10:14
so so the building the building, the original building was 350,000 square feet. And what we did was we Kondo the building. So we sold a third of the building to a trucking company called beacons, which is a very large trucking company. They have offices all over the United States. So they bought a third of the building. And then we have a, and then we bought as an individual company for primetime, we bought a section of the building that consisted of 20,000 square feet, which was dedicated. And we also have a gym inside the building as well, where a lot of professional athletes train called Hard Knocks. 365 and you’ll see a lot of pro athletes train over here, including Mike Tyson was training over here as well.
J Darrin Gross 11:02
Wow. That’s awesome. So you you acquire the facility in did you then start adding the the different components as far as the amusement opportunities? I mean, it sounds like it 20,000 square feet, that’s your current your office? Was it originally office space when you acquired it, or?
David Goldfarb 11:23
Yeah, so So what we did was we converted warehouse space into this entertainment space. And when we first started off, we started off with about 85,000 square feet that consisted of an arcade, a ropes course, laser tag, bowling, and go karts. And after year one, we were so happy with the revenue, that we knocked down the wall that was adjacent to our space, and we expanded the arcade, and then we added, added a trampoline park. And then we added a roller skating rink, and we added escape rooms. And then we added a mini golf, indoor mini golf. So we basically have almost every single attraction under one roof. And recently, we just added speakeasy bar, which is a big common thing going around right now, which is like almost like an underground bar inside of the facility. And you would never think that we would have that, you know where we’re located. So, yeah, so we’re, we were very, very happy with the results. And that’s why we continued to expand, going from 85,000 square feet up to 160,000 square feet. And it continues to do extremely well, I would, I would almost call us the Disney or the universal of the South. In the south Florida area. We attract about a million customers a year. So it’s really, it’s really been a real staple to the south Florida community.
J Darrin Gross 12:57
I’m kind of curious. So what is the what’s the secret recipe for the volume of traffic? I mean, that seems like a huge number of people to be, I mean, sounds like your business is extremely successful. But what what do you
David Goldfarb 13:13
The big thing over here is, is we’re really an eight dimensional facility when I say eight dimensional, you know, many, many facilities that are in our space, they’ll have either a go kart track, or they’ll have just a bowling center or they’ll just have a trampoline park. But what we encompasses everything. So this is basically one stop shopping. In other words, you can bring someone that’s five or six years old, all the way up to 80 years old, and they’ll find an activity to do so they the what we tried doing was was making sure that we could fit every single demographic that fit into a family style environment. And and in addition to that, we do a lot of large corporate events. We’ve had a lot of famous people over here at our facility including Shaquille O’Neal has been over here and and Mayweather has been over here. So we’ve had we’ve had Mike Tyson over here. We’ve had Evander Holyfield over here. We got a lot of we had we just recently just had Messi, the soccer player over here. So it’s, it’s really unique. The establishment that we have at extreme and extreme action Park. It was very difficult to duplicate this type of environment somewhere else. And what happened was in 2019, we purchased our first Sears department store in a place called Sanford, Florida, which is north Orlando. And we had said can we take and mimic extreme action Park and put it into a department store, where so many of these have become available, due to, you know, the exodus of the shopping era, going to either Amazon. And then COVID has really, you know, you know, has really escalated that you know that these availabilities of these department stores. So we purchased our first department store in September of 2019 directly from Sears holding, which is a company by Eddie Lampert based here in Miami. And we purchased our second department store, December of 2019, also from Eddie Lampert in Tampa, Florida. And thereafter, after we did these purchases, we started to facilitate the construction process for both locations. And then COVID hit. So our timing was not the greatest. However, we were able to overcome it. And we opened up our first location called elevate fun spelled e le V eight fun in Sanford, Florida, in a shopping mall. And we opened it December 31 of 2021. And we’ve been we’ve been very happy with the results. We just recently opened up our Tampa location, March may 28, of 2023. During this time, we purchased a third box in Jensen Beach, from Simon properties. And that also happens to be a Sears box. And these all consists of about 125,000 square feet, same similar footprint, eight dimensional facilities go karts, bowling, arcade ropes courses, indoor mini golf axe throwing. And we’re now in the process of purchasing our fourth box, which will be in Miami, Florida. And then we will purchase our fifth box later this year in Jacksonville, which will bring us up to five locations.
J Darrin Gross 17:20
That’s, that’s impressive. I mean, they the growth I mean, the recipe you’ve got it sounds like it’s definitely a success. Do you feel like this success is primarily based on having all of the different elements to where you can, you know, hit the age range from, you know, the young to the old and and make it a true family? You know, opportunity is that? That?
David Goldfarb 17:47
Yeah. So there’s there’s there’s there’s various components on the reason why we’ve been very, very successful. First, it starts off that the only facilities that we’re looking to move forward in our department stores inside malls. And the reason being over that is is first and foremost over here is generally speaking, you go to any mall in the country, and they got 6000 parking spaces, so you never have to worry about parking. That’s number one. Number two malls strategically were put in good locations, overall, where there is they’re very easily accessible to the highways. So this is also an important factor number three over here is you get the cross traffic of any mall, they can enter our facility from the parking lot, or they can enter our facility from the mall itself. So we’ll have we’ll have cross traffic on both on both variations. The fourth element being is we have an internal construction company. So we’re able to build these at a fraction of what these would cost if someone were to enter our industry. And I would say the the fifth element, which makes success very successful is that we have these eight dimensional facilities that consist of every attraction under run under one roof. That also includes a full food and beverage menu to be able to serve, you know all American food with about 60 to 80 television sets per location. So it’s like a sports bar atmosphere inside of an attraction venue that we try to keep these people over there three, four hours at a time. And yeah, our next, our next pivotal move, because of the success is we will look to add movie theaters, as a component to the venue. And these will be bowtique movie theaters that you’ll be able to have. You’ll be able to eat and drink inside the theater and there’ll be luxury style theaters that are, that can range anywhere from six to eight boxes, about 50 people or so per per theater. And they will have the opportunity to really enjoy themselves because there’ll be in a luxury style setting. This will not be traditional movie theaters.
J Darrin Gross 20:23
Yeah, I’m impressed. I mean, just the two things you’ve combined that are kind of, I’ve always been kind of like a head scratcher for me is the you know, the malls. I mean, I know the mall I grew up going to buy every pair of shoes and pair of jeans ever, you know, wore growing up, they knocked it down and built a Lowe’s. I was like, how did that happen? You know, and it’s just based on people that the Amazon effect and people stop going to the mall and, and just kind of the change of things. But I would think that the malls would be, you know, or the surrounding businesses would be delighted with the foot traffic you’re bringing is are you finding that to be the case?
David Goldfarb 21:04
Yeah, absolutely. I mean, we’d become basically the 2.0 version of what department stores were. So what what many people don’t realize is, you have the mall itself. And then you have department stores. So for instance, you’ll have a Sears, you’ll have a Macy’s, you’ll have a JC Penney, you’ll have a Dillards you’ll have a Kohl’s. And then you have the nucleus of the mall 70% of the time, the department stores are owned by the department stores, so they own their own real estate. And they own their own acres inside the parking lot. So we’ve we’ve really, we’ve really, you know, from the from the short amount of time that we’ve been involved in this business, we started learning development. And on our first property that we bought in Sanford, Florida, we have just recently worked out a deal to put a hotel inside of our parking lot, as well. And it’s going to be a mayor Marriott branded hotel. And we own the land. Because the department stores that we have purchased, they all come with approximately about eight acres. So we’ve we’re taking advantage of of the of the land that we have. And we’re we’re we’re building it adjacent to our elevate projects. And our first one being will be a Marriott townhomes hotel that will consist of about 150 rooms. And we’re going through a process with the city and a reciprocal easement agreement process, which is not easy, which we’re looking to navigate. And we feel that that the new setting for these mall type of environments, is is now eat workplace, you know, instead of traditional shopping, so you’re gonna see that that malls right now, in the future, especially in major markets, they’ll have hotels, they’ll now have a supermarket, they’ll now have apartments, they’ll have an eight workplace type of environment. And this is starting to become the new norm. And where are things where we think our concept really is going to really pull voters into the next, the next Ashkelon is the fact that we’re already taking 1/10 of the mall, by building 125,000 square foot facilities of entertainment. After entertainment. We happen to be building a hotel on property, what comes next apartments after that comes a supermarket. So we feel like we’re becoming a catalyst in rebuilding these moles, that that really are a dying breed. So look, shopping is going to still exist, because people want to feel in touch shopping. But you’re going to have a lot less retail type of environments, because of the fact that you’re competing with Amazon because of the fact that you’re competing, you’re competing with online shopping. And it’s very difficult, you know, to be able to match pricing. When these online shops, they don’t have to pay rent, they don’t have to pay employees, they don’t have to pay an air conditioning bill. However, retail will not go away altogether. There will still be components because there’s a large part of you know, there’s there’s still the social aspect of of actually getting outside your house and doing something and you’re just going to see these footprints, where you’ll see malls that were a million plus square a million, you know, plus square feet, you’re going to see them shrink down to maybe half that size. And then you’re gonna see things like a Home Depot or Lowe’s connected to these malls, well, they’ll knock down a department store, or they’ll put a hotel or they’ll put apartments. And that’s basically the new dynamic of what is moving forward in the mall environment. And that’s why we’re so excited to really launch our concept. And, in fact, actually, in December of last year, we were on CNBC, with with Kevin O’Leary of Shark Tank, and Bethany Frankel, in a series called Money core two, and we were the premiere episode on on the show, and you can find that on our on our YouTube site at Elevate fund, as well. And it was it was pretty, pretty interesting. We were the, we were the premiere episode of the show on CNBC. That was December of 2022.
J Darrin Gross 25:58
That’s awesome. I think the cool thing I’m hearing and, and just kind of recognizing is like you mentioned, the the Amazon effect has kind of changed the whole shopping experience and COVID kind of accelerated that. But the fact that there’s there’s a use and you’re able to, to, you know, fill the the vacancy created by the, the the exodus of the retail that traditional retail stores, to where those centers, I mean, they were huge centers in, like you said, where they were located in communities and stuff, but but reestablish that core in the activity. And what you’re bringing is an experience related opportunity, as opposed to a, you know, an object that you can buy online or in a retail store, whatever, but you can’t do the on you can’t do the experience online, you’ve you know, that social piece of your brain? Which I think people are still hungry for. I mean, they’re they’re definitely, absolutely, absolutely. So let me ask you, I mean, it sounds like your your plans to kind of go all corners and Florida, is there a plan to go beyond Florida?
David Goldfarb 27:10
Sure. So originally, I was born in New York. And you know, it’s it’s another, it’s another area of development between New York and New Jersey that I understand and, and eventually, we would like to move up the East Coast. The reason why we’re staying in Florida, first and foremost, over here, we wanted to perfect the concept. That’s number one, number two over here, it’s a big state, and it’s the fastest growing state in the whole country, you know, for many reasons. And we feel we could have, at minimum at minimum 12 to 15, up to 18 locations just in the state of Florida. So rather than rather than branch out into different markets, we figured from a management standpoint, it’s much easier to stay in the market that you know, we understand construction law for the state of Florida, because that’s a major component in what we’re doing. And on top of that, right now is there’s just just countless opportunities that we could do this, where we can just get in our car, and drive to a location as opposed to getting in a plane and start and doing this all the way in New Jersey. And we’re not there yet, frankly, I mean, really, to get to that next level, we would need to bring in a really much bigger executive team to get us there. And we’d rather perfect this concept. And I think we’re doing that, you know, we we’ve we definitely have made our mistakes along the way, but we’re correcting them.
J Darrin Gross 28:48
Yeah, I think I mean, I applaud your efforts and kind of the the growth strategy, there’s, you know, work out the kinks local where you can, it’s easier to manage rather than going wide and having less control. I’m curious you know, you mentioned the the the in house construction team and if he can speak to it or not, but is there any kind of a range of of dollars you expect to have to spend on a capital improvement to take a vacant series to convert it into the the property as you operate it?
David Goldfarb 29:28
Sure, sure, sir. So I guess the best way to answer that is is when we first we first started our first store, which was in Sanford, Florida, North north of Orlando in the same regional market, the Central Florida market. We got three bids from general contractors, and the bids ranged anywhere from $70 a square foot to $90 a square foot to give us a vanilla box, meaning when I say a vanilla box, we can then put in kitchen equipment we can then put in the arcade, we can put in the bowling. So in other words, just a conversion, if you take $70, which is the lowest square footage price on this, and you multiply that by 125,000 square feet, you start coming into numbers that these things could range anywhere from 10 million, all the way up to 14 million just in construction. You know, with that being said, this concept doesn’t become so viable. It’s not it, it doesn’t work for what we’re doing. What works is, is we need to be able to purchase these stores num first and foremost that the right number, so we can’t go above, on our purchase, really above $5 million on a department store, have 125,000 square feet, give or take. And then our construction, we’re doing it for a fraction of the cost of what we got these bids on. Because if not, this becomes unaffordable, it just doesn’t make sense, when you add up all the numbers, and then try to operate this. So you know, all in when we’re doing these projects, between the attractions and between the construction and building a full out kitchen, you know, these can cost unlike, let’s say 125,000 square foot footprint, somewhere in the neighborhood of 10 to 11 to $12 million, and you’re ready to open your doors. However, if I did it with just the construction cost, it would have cost me just in construction with third party companies 10 to $14 million. So that aspect really has enabled us to continue to move forward.
J Darrin Gross 31:48
And that’s huge to be able to control your cost like that. Mean and not have to carry that much. You know, the additional debt? Or I’m assuming you’re using bank financing, or you haven’t you’re raising capital or how are you?
David Goldfarb 32:04
So so it’s an interesting question. So the first two locations started off with me, and one of my closest friends that we were old roommates, actually 25 plus years ago. And we both started off with, with almost zero monies, so to speak, and we have actually financed the projects ourselves. And we don’t have any debt along the way. We’re doing this with our own money. And up to this point, our first two locations, we’ve done this debt free, our third location, I am doing this on actually on my own, as well as the fourth and the fifth location. As one of my closest friends. He he is right now doing other adventures, so to speak right now. So everybody’s involved with me on these first two projects, and it’s all going to be self financed. And there’s a reason why we’re self financing these projects, we, we knew that private equity will, has already come to us. And we wanted to make sure that let them know that we welcome them, but we don’t need them. And that’s the reason why we went this route.
J Darrin Gross 33:28
That’s that’s a huge feather in your cap not to have to be beholden to the lender or investors or, or anything like that. So congrats on your success and your ability to grow. And I’m assuming also that that gives you a an ability to kind of weather, you know, whatever economic cycles, you know, as opposed to, you know, you hear all the time about people go into business, and they they get a big note from the bank and, and, you know, market changes, plans change, you know, whatever it is, and all of a sudden it’s an it’s no longer and so to not have that dead load on there. I mean, that’s that’s a huge, huge benefit to you and your partner and, and the opportunity for your growth. I think that’s, that’s, that’s great.
David Goldfarb 34:23
I mean, I come from, like an old school environment I came from my father was in the military. And, you know, he has always kind of instilled with the notion, and it’s not necessarily the best practice, but it’s the practice that I grew up on that if you you pay for what you can afford, and if you could buy it, buy it. If not, you know you got all this additional pressure of financing. You know, all these different projects. What happens if there’s another COVID What happens if there’s, you know, a hurricane, what happens if there’s some type of natural disaster, you know, what happens over here is the banks are going to continue to have their handout, and they’re going to somehow force you to pay these dollars. So, you know, you know, rather than be under that additional pressure, you know, the, the plan was to take these first five locations, do it with internal monies. And then thereafter, we could speak to private equity. Thereafter, we could see, you know, what the next steps are, as we move forward. But, you know, we chose this route, and I’m kind of happy we chose this route. Yeah, I’m actually very happy we chose this route, you know, because, you know, we, we, we, you know, first, you know, we’re having a lot of private equity groups speak to us now. And when I tell them, that we’re a debt free company, they all their jaws drop, because, you know, you know, most of these guys, you know, when you go into a perfect example, is watching Shark Tank, you know, you watch Shark Tank. And what happens over here is, you know, the, the sharks, these five sharks that are, you know, listening to all these businesses, you know, they all have the upper hand, because all of these, all of these people that are starting these entrepreneurial type of things, they all need capital. And, you know, without capital, they can’t move forward. So what happens over here is the sharks, they come in, and they take a large part of the company, and then they start controlling the company, and if you don’t perform, they start owning the company. And, you know, that’s exactly what we didn’t want. So that’s why we took the route that we did.
J Darrin Gross 36:39
Yeah, well, I see it all the time, with not all the time. But I mean, clearly, in recent history, it’s played out numerous times, with the rise and fall of interest rates are just the right now we’re kind of going through a phase here, where there’s concern and a lot of the commercial real estate, and specifically a lot of the properties that you’re, you’re looking at, if, if it was or more like in the office space, where, you know, you you bought a building, and a few years back, you had a good interest rate, you had a full building COVID hit all of a sudden, it’s empty, there’s a lease in place that people are still paying on. But once that lease is up, you know, and there’s nobody, there’s they don’t have a need for the property. What’s going to happen? Are you gonna have to give the keys back to the bank? Or is there going to be something else that comes in that, that will fill that. And that’s a huge change of fortune, from, you know, thinking you’ve got the world by the tail, because you’ve got a full building and a low interest rate, and, and then nothing but smooth sailing ahead, and then you hit the storm and, and everything’s upside down. And, you know, it’s a, it’s a major to major situation, and a lot of commercial real estate is facing on what, what to do. And, I mean, I’m just, I’m happy to be talking with you, and finding out that you have found a use for a lot of that space, and are able to take advantage of some of the opportunities and, and also to do a debt free. That’s I mean, that’s, that’s something that I would think you’d be exceptionally proud of that you’re able to do that. Because that’s, that’s pretty rare. So congrats on that.
David Goldfarb 38:21
Yeah, I mean, I think the big, you know, I think I think what needs to be noted over here is that, you know, most people have got blinders on. When I say blinders, they just don’t look outside of a traditional box. And, you know, I think, you know, we have a model that certainly works, and we’re not deviating from the model, we’re buying real estate at a fraction of what it would cost to build. And then we’re repurposing the real estate through our own construction company. And we’re doing it at a fraction of what it would cost any other person that’s going into our space. And because of the fact that I know the attractions, because I’ve been doing this since I’m 19 years old, we are able to be able to do all three components, you know, that that nobody else is doing? So, you know, I you know, if the way to think about us is is is you take Dave and Busters, which is the one it’s these guys are, are are the king in our business. And what they’re doing over here is is they usually have these 50,000 square foot centers, that they’re leasing the building. And then they’re putting in a restaurant and an arcade. And they’ve been duplicating this concept. You know, they’ve they’ve really scaled to this where they have over 100 locations today. So we’re doing something similar to what they’re doing except our locations are about two and a half times the size. We own our own real estate. We own our own construction company, and we have the ability to continue to scale into markets all over the country, because there’s so much real estate that has become available. And, you know, the secret sauce, you know, in this whole equation is really buying, right? Understanding construction and understanding the operational aspects of what is necessary to make to the people come. And that’s why I feel, you know, by, you know, within a very, very short period of time, we will amass to a very, very large company, and there will be a lot of private equity groups that will be knocking on our door, which they already are, well, there’ll be a lot more, you know, as soon as we open up the additional locations, right, now we have two. And the third one is under construction. We’re buying our fourth location in, in nine days from now in Miami. And then we’re buying in Jacksonville. And these are all major markets. And by the way, three of these five properties are all in Simon property malls. And you know, if you’re an assignment property mall, you know, it’s good mole.
J Darrin Gross 41:08
That’s definitely a strategy with the location thing you’ve got figured out? That’s, that’s good. I’m curious. The thought process behind the branding. If I understand, right, you’ve got a different name. For each Is there any kind of thought that you can explain as far as how how you came up with? Are you? Are you keeping them separate? On purpose? Or is there or is there a bigger? Thought? Sure.
David Goldfarb 41:41
Sure. Yeah. So So primetime was the first company they started, and primetime was focused on arcade equipment, focused on rentals focused on sales. And we felt that prime times name worked for that part of the industry. But as a family entertainment center, we didn’t feel like it flowed very well, to our first entertainment center, which was called extreme action Park. And over here at extreme action Park, we did something that’s very unique, that’s almost impossible to duplicate, because of the fact that we converted this warehouse with ample parking into an entertainment center, that it was really almost impossible to duplicate what extreme looks like because you just don’t find warehouses with ample parking. And that are close to the highway, we’re actually on i 95, we have 500,000 cars that pass by our building a day. So so we elected to go with a new name, where we’re focused in mall environments, and we came up with the name, elevate, and spelt with an eight, e le V eight, to make us looked a little bit more edgy, a little bit more cool. And then we named our property company EA properties. So that’s where the name EA properties comes in. So that’s how it kind of formulated, whether it was the right decision the wrong decision. It was the decision we made.
J Darrin Gross 43:13
No, I think, you know, having distinction as to what the in each does is good. Will you continue to badge the new facilities under the Elevate? Will that is that the plan for those?
David Goldfarb 43:29
Yeah, so so so currently, right now, we’ve had the fortune, you know, to be able to buy these properties and, and we we are strictly going into malls department stores, because that’s how we get the square footage that we need. We talked about actually in one of our zoom calls with our ops team that in some areas where extremely high traffic areas for instance, and we can’t buy the property, but we’re able to go into a facility where it’s reasonable rent, and it’s under 15,000 square feet. We will come up with a very scaled small version called elevate social and this will this will consist of like duck pin bowling, and arcade equipment, full bar limited restaurant menu, possibly interactive golf in a 15,000 square foot footprints but where there’s massive traffic
J Darrin Gross 44:38
Well David, this is all very interesting and and I’m I’m excited to talk to somebody who actually found a way to solve the space issue I mean that you know, because it just it’s always been kind of a frustration to me to see these big huge malls just being knocked down. I’m gonna like why I mean, just got to see like just the cost, you know, the cost of build is so expensive. You know, absolutely, I mean, always thought to me, it’d be easier to renovate it and make it useful for something rather than just to start over. But hey, if we could, I’d like to shift gears here for a second. By day, I’m an insurance broker. And as such, I work with my clients to determine what to do with risk. And there’s three strategies we typically consider. First, let’s see if there’s a way we can avoid the risk. And when that’s not an option, we look to see if there’s a way we can minimize the risk. And if we cannot avoid nor minimize risk, we look to see if there’s a way we can transfer the risk. And that’s what an insurance policy is. It’s a risk transfer vehicle. And so if you’re like us, my guests, if they can look at their own situation, your clients, the market, interest rates, political, whatever, whatever it is that you identify, and what you consider to be the biggest risk. And again, for clarification, while I’m an insurance broker, I’m not necessarily looking for an insurance related answer. Sure. And so if you’re willing, I’d like to ask you, David Goldfarb, what is the BIGGEST RISK?
David Goldfarb 46:22
So if I’m going to, if I’m going to make this unrelated to let’s say, insurance or to anything, from an operational standpoint, I think the biggest risk that we’re seeing, or at least I’m seeing in these in picking these locations, is you don’t want to go into a location where the mall operate. Operator is like a Slumdog real estate mall operator. So you want to avoid that at all cost. And even though you have a separate entrance, leading into your building, the fact that you’re going into a mall, where they are basically treating the property as if it was a warehouse, so to speak, not the way the Simon properties do not the way Washington prime group does. Not not the way you know, some of these, you know, other large mall operators run in this type of environment, I would avoid at all costs. So So you know, there are there are certain certain players out there, and I’m not gonna mention names. But there are certain players out there that have been buying distressed moles. And if you happen to buy a piece of property that’s attached to that distress mold, the way they run their operations really is it’s unfortunate, because when you’re attached to what I would call almost a bad neighborhood, if I’m referencing that, no matter how nice your house is, you’re still in a bad neighborhood. So that’s what I would avoid at all cost.
J Darrin Gross 48:09
Yep, you can change the property but you can’t change the neighborhood. No, that’s good. David, where can listeners go if they’d like to learn more connect with you?
David Goldfarb 48:20
Sure. So a couple different things. One is is our our company is Elev8fun.com e le v8 fun.com. And it will show currently right now three locations, two of them that are opened and Jensen Beach which is coming online in the next five to six months. We have our social media, on whether it’s on on Instagram or Facebook or or Tik Tok under Elev8 Fun as well as our YouTube channel.
J Darrin Gross 48:55
Awesome. Well, David Goldfarb, I cannot say thanks enough for taking the time to talk today. I’ve learned a lot. I’ve enjoyed it. And I look forward to doing it again soon.
David Goldfarb 49:07
Absolutely. I look forward to seeing this on in real time.
J Darrin Gross 49:11
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