The longer that you’re in the commercial real estate (CRE) industry, the probability increases that you’ll have clients or will be contacted by prospective clients who will want / need your expertise on their CRE exit strategy. To best advise your clients, you’ll need extensive knowledge on the options available while managing to “Staying in your Lane” with regards to your licensing. Simply put, refer your clients to their attorney for legal advice, their CPA for tax implications, and so on.
You’ve been asked to sell an income producing property by a property owner or client. Aside from determining market value, gathering the necessary due diligence information, and other commercial real estate related tasks, an experienced CRE professional will have a discussion with the seller about their post-sale plans.
Every one of us is a broker. That is to say, we’re all using someone else’s money. Whether you’re a baby-faced runner at CBRE or quarterbacking a big-time pension fund, you’re still a broker—you need to sell your deal to somebody, whether to a mom & pop investor or a bored investment committee. It’s not your money and, for that matter, it’s usually not theirs. The only true principals in real estate may be the millions of 401K retirees who are the capital behind every major player in the industry. Even the old rich guys still in the game are using some else’s money; in their case, it’s their kids’.
Commercial brokerage is a bit like bull-riding. Only a handful of agents, the best, last much beyond their twenties, the vast majority unable to deal with the pressure of having their cash flow meter reset to zero every January 1st.
To fully understand and thrive in commercial real estate one has to understand much more than the simple “bricks and mortar” that make up a building. A successful commercial real estate broker (developer, investor, or lender) wears many hats and should have knowledge across a variety of different industries and disciplines.
Contributing Author: William F. “Felton” McLaughlin, CCIM, SIOR
When it comes time to sell a commercial property that sits in a challenged location, the first course of action for a seller and/or the listing broker should not be to wonder about the size of the discount that should be placed on the valuation of the property. Rather, focus your efforts on all characteristics of the property that are either unique or offer some sort of competitive advantage. If you can identify how these unique features benefit the user, you can market the challenging property more effectively.
As the recent sale of a veterinary medical office building will show, we discovered some unique property attributes that helped the seller achieve a sale price close to the asking price.
There has been a lot of discussion, recently, in broader investment circles, that we have come through ten years since the “Great Recession of 2008-2009,” and that some scale of a Recession is on the horizon, whether Q4 2019 or mid 2020, which suggests, a round of “defensive investing” may be in order.
Having come through this period of historically compressed cap rates (higher prices) across all asset classes, none has been more pronounced than the NNN retail sector of the real estate investment industry.
Immediately after the Great Recession, when debt sources were becoming more diverse, both debt and equity were available, in abundance, in the multi-family or recycled housing sector, since you had a new captive audience of former home owners (newly created renters) who, in some markets, actually rented their own prior homes from their new hedge fund landlords, who had swooped in and bought up bank REO assets en masse in certain markets like Phoenix.
As we kick off a new year, we are always looking for ways to improve our brokerage services and provide the best possible experience for our clients. In 2019, we will be focusing on numerous things to continue being the best commercial real estate brokerage we can be. Setting guidelines and goals can help balance your calendar, while increasing your success and happiness throughout the year.
As many much smarter ‘guys’ than me (and smarter women, too) are reviewing the last year; and struggling with Forecasts for 2019, at this time, there has been a lot of discussion about Fed Policy on rates and their impact.
We think some useful language, is to characterize ‘asset bubbles’ or the asset inflation that these policies may have created as a real thing. Actually, many are referring to this period as the ‘Bernanke-Yellen Asset Inflation’ period.
As a commercial real estate (CRE) broker or salesperson, you may operate as part of a group, however, you are also an independent contractor, and in many ways, operating your own business. This means you should be developing a marketing strategy of your own, in conjunction with your firm’s marketing plan, to help you grow your personal brand, get more listings, and become a leader in your market and/or area of specialization.
There are many great tools available to help business owners leverage technology, and this is equally true for marketing yourself, growing your brand, and measuring your efforts.
Here are some tools you might want to consider adding to your toolkit.
2003-2005 “Irrational exuberance” a la Greenspan, now famous quote;
2008-2010 Great Recession and aftermath: PTSD for many of us;
2016-2018 Recovery being fully realized after almost a decade;
2019-2020 And Beyond: A measure of Uncertainty???????
With the marking of George H.W. Bush’s passing, we are afforded, yet, another “Opportunity to take stock.”
For those readers and investors who were beneficiaries, in this past year of the Tax and Jobs Act of 2018, I suspect, we can readily acknowledge the positive impacts of stock market valuations, due, in part, to share buy backs; and, shortly, when we do our taxes at new rate structures. The Economy has continued… (Is it sustainable?). The introduction of Opportunity Zone Funds, as once-in-a lifetime tax incentives, if properly executed, are also very encouraging.
Congratulations, you successfully signed up a new listing, now you have to perform and sell the listing. If you are looking to perform quickly, to the best of your abilities, and acting in the best interest of your client you should be open to cooperating with other brokers. This can have some drawbacks, as brokers have overlapping clients, but overall the more people working on a listing the greater the chances the deal turns into a transaction and closes. Also, half of a commission is better than no commission. In today’s market buyers are coming from all over the place, not just other states but outside the country as well. In order to reach more buyers and increase leverage as a seller’s agent you have to reach a large audience and create buyer demand.