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Michael Rothstein, ESPN Staff Writer
JUST AFTER THE 2018 NFL season, Justin Watson‘s first as an NFL wide receiver with the Tampa Bay Buccaneers, he was having dinner in Tampa, Florida, with his wide receivers coach when Teal Henderson, the founder of Bones Investment Group, approached the two of them.
Henderson, who knew his coach, introduced herself to Watson and handed him a book. Then she left, and they didn’t speak again for 18 months.
Watson, now with the Kansas City Chiefs, kept thinking back to the meeting and “The Little Book of Triple Net Lease Investing.” So he reached out to Henderson with a question and an offer.
He wanted to learn from her, which is how Watson essentially became Henderson’s intern during the 2021 and 2022 NFL offseasons.
Watson sat across from Henderson in her Florida home office and joined the Zoom calls she participated in on her 60-inch television. He told Henderson when he finished playing in the NFL, he wanted to work with her.
“For me, just seeing all the different jobs and getting to meet with those people and talk with those people,” Watson said. “It just got me a real insight into the industry that you just can’t get from reading books or seeing it online.”
Watson watched as Henderson grew the Bones Investment Group — a group of funds in commercial real estate development and triple net lease properties primarily working with athletes. Of the fund’s 78 active investors — including Buccaneers wide receiver Mike Evans, Miami Dolphins offensive tackle Terron Armstead, Atlanta Falcons fullback Keith Smith and Watson — 97% are current or former NFL players, along with a few coaches and orthopedic surgeons who operated on those players.
Some of Bones’ tenants include Publix, Home Depot, Target, Burger King, CVS and WalMart.
Henderson focused on athletes — her husband is a former college football player and NFL agent — because she believed they were a class of potential investors largely not involved in the space. She wanted to offer them a chance not only to invest but learn along the way, intertwining an educational plan potential investors must complete before being allowed entry.
“If I can expand these athletes’ horizons and kind of put them out there, you know their work ethic and their drive and their desire,” Henderson said. “They’re gonna dominate, right? And they’re just not in the commercial space because no one has given them the exposure and the access to it.”
HENDERSON HAD BEEN around real estate and athletics her entire life. Born in Aspen, Colorado and raised in Hawaii, Henderson’s family worked in real estate business acquisitions. She played at UNLV on a tennis scholarship from 1988 to 1992 and then worked as a paralegal, which helped her understand and read contracts, before starting her career in mortgages and then commercial real estate in Florida.
She married Arlo Henderson, a former college football player from Mississippi Valley State who became an NFL agent, and spent decades advancing in real estate. As she grew, she kept coming back to one idea: She wanted to work with and introduce athletes to the space.
Henderson had seen athletes going broke first-hand from her husband’s time as an agent and understood the difficulties of players transitioning to a post-NFL working world. Henderson wanted to offer a way for players to invest in their future, a layer of attempted protection through education and investment.
Her idea was rebuffed by her firm, so she decided to go out on her own. Over a game of dominoes in her home, Henderson explained what she did for one of her husband’s clients, who thought of real estate as buying and selling houses.
She created Bones Investment Group in 2018 — “bones” being another name for the domino tiles — and quit her job to start building the fund.
The first fund, which is beginning to implement its exit strategy by selling 60 acres of developments, launched in October 2019. The group is currently raising capital on the sixth fund, called BIG Legacy, which will be a hybrid fund split between cash-flowing assets that will pay out every quarter and ground-up development projects.
The first five funds Bones offered were primarily ground-up development projects, said vice president of investments Noah Shaffer, taking undeveloped land and turning it into a large building, mixed-use space or other project. Shaffer is calculating a weighted combined 43% return in those funds cumulative over the first five deals. Most of the properties Bones invests in are partnerships with other companies and developers to participate in larger, higher-priced projects.
There are multiple steps to gain entrance to the fund. It starts as a conversation with Henderson and Shaffer, to get a sense of the player’s current real estate knowledge, their current portfolio, future financial goals and the state of their NFL career.
The player must also qualify as an accredited investor by the IRS, which means a net worth of over $1 million, not including their home, and an individual income of over $200,000 or a combined-with-spouse income of $300,000 each year the past two years, with the same expectations in the year they are investing.
If everything checks out and a spot in one of the Bones’ funds is open, players can then make a minimum of a $50,000 investment.
Henderson also makes sure the player’s financial advisor is involved and insists the player participates on monthly update calls and has either gone through coursework she and Shaffer have created or has shown previous investments and competency in commercial real estate.
“Educate them on it and focus on that education piece,” Henderson said. “Because that seems to be what was missing. A lot of times, when I would talk to the guys, they wouldn’t know exactly where their investments were or how it worked and that was concerning to me.
“So our focus was going to be making sure they knew exactly where their money was, how it made money, why they were invested in this, what were the potential hurdles and how it worked.”
ARMSTEAD WAS ATTENDING the seventh annual Dolphins Business Combine in February when Henderson caught his attention.
Dolphins owner Stephen Ross launched the event in 2017 to offer his team seminars and networking opportunities focused on real estate, entrepreneurship, business leadership, business operations and wealth management. This year, Henderson was among the speakers.
Armstead was intrigued by what Henderson said and how she presented the world of commercial real estate and absolute triple net leases, a commercial lease where the tenant holds the responsibility for owning the property, including paying property taxes, insurance and maintenance, in addition to the rent.
Toward the end of the three-day combine, Armstead pulled Henderson aside. He wanted to work with her. The conversation lasted 30 minutes. She mentioned the fund, but also explained it’s not for everyone — specifically the educational commitment.
The classes initially began with topics like financial analysis and underwriting. As the needs of the investors changed, so did the curriculum, adding net lease real estate investing tutorials and more underwriting sessions. Their introductory course, which runs about eight hours, is one of the parameters for a player to invest. If a player can’t make the calls, they offer written material as a substitute.
There’s also an optional nine-section deep-dive into net lease properties, each course lasting 60 to 90 minutes, along with one-on-one courses for players interested in pursuing it as a career.
“I was completely all-in, man,” Armstead said. “I had been all about just trying to get further education and knowledge on everything business and finance. So the combine was just a huge jumpstart and boost of momentum.”
Armstead, who owns real estate properties but not commercial ones, picked up Henderson’s classes fast. He already understood most of the terminology, just saw it applied differently.
“The attractive part was the education piece, like forcing education, that was the most attractive part of it,” Armstead said. “And then her bringing people that are not really represented in these industries, bringing them along to sit at these tables and have these conversations, make these deals.”
A company approached Armstead about investing in a line of women’s menstrual products. Armstead sent it to his team, including Henderson, and within 10 minutes she provided a list of questions she would ask if she were considering investing. She taught him to not only look at the money coming in and going out but the details of expenses, operating costs, inventory and shipping.
Based on the questions she raised and the answers he received, Armstead decided not to do the deal.
“In the past, I would be very hands-off, not really understanding what it all means,” Armstead said. “Now, I’m taking the captain’s seat in these investments, in these investment opportunities.”
WATSON WAS WRAPPING up an OTA practice in Kansas City this spring when he got a small poke on the side. It was safety Justin Reid, wanting to discuss triple net leases.
The pair hadn’t spoken much previously, but Reid had heard of Watson’s involvement with Bones. He started asking about Watson’s internship, about the fund and the classes he had taken.
It created a conversation and a connection Reid said likely wouldn’t have happened otherwise.
“When I go into a new locker room, there’s really nobody that I know from college,” said Watson, who spent time studying stocks and the financial markets while playing college football at Penn and studying in the Wharton School of Business from 2014 to 2017. “So to kind of have this crew of real estate investors from all across the NFL is cool for me to have just connections going into new locker rooms.”
Watson completed his internship and is now one of the group’s advisors, along with Smith, one of Bones’ six initial athlete investors, and former NFL players Deone Bucannon and Bene Benwikere. The advisory board is comprised of investors who have long-term interests in working in commercial real estate after their NFL careers.
Watson, for example, offers input about what properties and deals the fund might try to acquire. He is also able to see more of the process from start to finish.
Being part of the advisory board also involves biannual meetings about the direction of the company. Henderson said Bucannon, for example, is good at evaluating the area around a property. Smith, Henderson said, excels in business development and the networking aspects of business.
“If Justin dedicated his time in this next offseason to me in Tampa, and we’re just around the corner from each other,” Henderson said. “Justin is somebody we would offer a job to, to be a junior under Noah to start doing fund management.”
Henderson started Bones with the idea that players would eventually succeed her in running the fund. Smith said the concept, post-football, intrigued him. Henderson — and the players — saw Bones as a way to bring NFL players together to help them work with one another on future deals, whether those projects end up as part of Bones or not.
“That was the goal,” Henderson said. “Is that it would be for athletes by athletes and they would be the ones that were really driving the ship.”
During training camp, Watson and Reid pulled young players aside in the locker room for short conversations. With investors connected to 16 teams, their hope is they can create similar connections across the league.
“You’re really creating a network,” Reid said. “And the awesome part of working with so many different athletes is everyone is a celebrity in their own city so if you talk to another athlete from Tampa, and it’s easy for him to be able to connect you with the housing authority.
“Or maybe you want to talk to a player that plays for the Chargers that’s in the fund, maybe you can go get connections in LA. It just ends up creating a very large mesh network that gets put at your disposal both inside and outside of commercial real estate.”