Our
travels took us to Dallas, Texas for the last week of the State Fair of Texas -
the world’s largest state fair - I’m told. After all, everything is bigger…
Anytime
we travel, I always look for a lesson or two or at least a way to improve
brokering commercial real estate. This trip was no different, but maybe a bit
harder to ascertain.
So
maybe a look at how the Orange County Fair and State Fair of Texas differ would
be fun with a bit of commercial real estate mixed in. If you’re up for it, here
goes.
The
first thing that hits you at the Texas State Fair is the scale. It’s enormous.
Big Tex greets you from his perch above the fairgrounds, smiling down on acres
of exhibits, food stalls, and carnival rides. The Orange County Fair by
comparison feels more intimate, more navigable, and, well, more California
casual. Both are successful in their own way, but they serve different
audiences with different expectations.
Commercial
real estate is much the same. Some markets operate on a Texas scale - huge
industrial parks, massive logistics hubs, and sprawling development tracts.
Others, like Southern California, require creativity within tight boundaries.
We don’t always have more land to build on, so we learn to repurpose,
subdivide, and modernize. It’s the difference between having a wide-open canvas
and mastering the art of working inside the frame.
Another
noticeable difference is pace. At the Texas fair, people linger. They stroll,
talk, eat, and soak in the atmosphere. In Orange County, we move faster. We
come for an afternoon, check a few exhibits, maybe catch a concert, and then
we’re on to the next thing.
This
mirrors brokerage styles. In some regions, deals develop slowly through
long-term relationships and measured conversations. In others, the tempo is
brisk - speed, competition, and timing often determine who wins. The best
brokers, like fair organizers, understand their crowd. They adjust their rhythm
to match the market.
Then
there’s the food. At the State Fair of Texas, deep-fried creativity reigns
supreme. Fried butter. Fried bacon-wrapped hot dogs. Even fried cookie dough.
It’s indulgent, over the top, and delightfully unapologetic. At the Orange
County Fair, you’ll still find your share of fried temptations, but there’s
also a nod toward fresh, local, and organic.
This
difference in flavor has a lesson too. In brokerage, knowing your client’s
appetite is everything. Some crave big, bold moves - buying large portfolios,
chasing redevelopment plays, or taking on risk for the promise of reward.
Others prefer steady, predictable, and sustainable decisions. Our job is to
serve what satisfies, not just what’s trending on the midway.
I
also noticed something subtle but powerful at both fairs: community pride. The
Texas fairgrounds tell the story of the state - its agriculture, innovation,
and culture. The Orange County Fair showcases local artists, small businesses,
and family-owned farms. Both fairs remind their visitors that they’re part of
something larger.
Great
commercial real estate brokers do the same. We connect businesses to
communities, not just buildings to tenants. When a manufacturer expands, a
warehouse fills, or a property sells, we’re shaping the local economy. Every
transaction adds a thread to the fabric of the region we serve.
So
what can the State Fair of Texas teach us about commercial real estate?
That
size matters, but so does fit. That pace varies, but focus wins. That knowing
your audience - whether they want fried Oreos or fresh fruit - is the key to
satisfaction. And most importantly, that pride in place transforms transactions
into relationships.
As
Big Tex would say, “Howdy, folks!” Whether you’re buying, selling, or leasing,
make your next deal something to smile about.
Allen C. Buchanan,
SIOR, is a principal with Lee
& Associates Commercial Real Estate Services in Orange. He can be reached
at abuchanan@lee-associates.com or 714.564.7104. His website
is allencbuchanan.blogspot.com.
Our travels took us to Philadelphia, Pennsylvania
last week. No. Not for the pivotal Dodger vs Phillies series but for a stop on
my book tour and bit of work. Yes! We were able to sample a Philly cheesesteak
- alas a vegan one - and ascend the Rocky steps to city hall. We even attended
a musical in the same theatre Thomas Jefferson graced in 1807.
You may be wondering what a trip east can teach us about commercial
real estate? Indulge me while I review a few reasons.
Legacy matters. Walking the cobblestone streets of Old City, you are reminded
that history leaves an imprint on everything. The architecture tells a story of
adaptation and endurance. Buildings that once housed print shops or tanneries
now host tech startups, art galleries, and coffee roasters. The lesson? A
well-built structure can live many lives. In commercial real estate, we often
focus on the next deal, but Philadelphia reminds us that long-term vision and
sound fundamentals outlast the trends of the moment.
Density breeds creativity. Every block in the downtown core bursts with energy. Office
towers sit shoulder to shoulder with residential conversions and vibrant
street-level retail. It is a living example of how proximity drives
collaboration. In Southern California, where sprawl is our default, we can
learn from Philadelphia’s mixed-use fabric. The best projects today are those
that layer uses - industrial with office, retail with residential, community
with commerce. When people and ideas collide, opportunity follows.
Transit changes everything. Unlike most West Coast cities, Philadelphia was built for
pedestrians and trains, not cars. That simple difference shapes land use,
property value, and even tenant demand. Industrial users there still rely on
rail access. Office tenants value walkability. Neighborhood retailers thrive
because foot traffic never stops. The takeaway for us is clear: accessibility
sells. Whether through freeways, ports, or planned transit corridors, the ease
of connection defines the worth of location.
Pride of place builds value.
Philadelphians are proud of their city. You can feel it in every mural
and every conversation at the corner market. That civic pride translates into
investment, maintenance, and long-term ownership. As brokers and owners, we
know that when people believe in their community, properties stay leased and
values rise. A clean street, a cared-for façade, or a supportive business
district can elevate an area faster than any zoning change.
Reinvention is not a phase - it is a
way of life. From its colonial roots to its
modern skyline, Philadelphia has reinvented itself countless times. Industry
shifted. Populations moved. Yet the city continues to evolve, not resist. That
spirit of adaptation is exactly what today’s commercial real estate world
demands. Office conversions, e-commerce distribution, re-shored manufacturing -
all of it requires the same willingness to look at existing assets and ask,
“What could this become?”
So, what can the City of Brotherly Love teach us about commercial real
estate? That legacy, density, access, pride, and reinvention are not just urban
characteristics. They are timeless business principles. The best deals, like
the best cities, are those that continue to create value long after the ink
dries.
Allen C. Buchanan,
SIOR, is a principal with Lee
& Associates Commercial Real Estate Services in Orange. He can be reached
at abuchanan@lee-associates.com or 714.564.7104. His website
is allencbuchanan.blogspot.com.
Last weekend, I attended
my 50th high school reunion. It was a night filled with laughter, memories, and
the occasional moment of “Wait, who are you again?” Fifty years. That’s a long
time. My high school English composition teacher, Mrs. Beck, would be pleased
I’m still using complete sentences, correct punctuation and an occasional pun.
But I digress.
As I looked around the
room, I couldn’t help but notice how much this gathering had to say about the
business I’ve spent my life in: commercial real estate.
The Power of Relationships
A reunion is really a
relationship check-in. You see the people with whom you stayed in touch, and
you also rediscover connections that simply went dormant. Some classmates
reminded me of things we did decades ago that I had forgotten. It struck me
that commercial real estate works the same way. Relationships never really
expire. A client I helped in 1998 might call me today with a new need. When you
treat people right, time becomes an ally, not an obstacle.
Cycles and Constants
At the reunion venue, I
saw the full spectrum of change. Hairstyles, waistlines, and technology have
certainly evolved. Yet the essence of people remains constant. The same is true
of our business. Markets rise and fall. Interest rates climb and dip. Industrial
demand surges and softens. But the fundamentals never change. Location, supply
and demand, and integrity still matter more than anything else.
Adaptation Equals
Longevity
A few classmates had
completely reinvented themselves. They took risks, learned new skills, and
embraced change. Others had refused to evolve and seemed stuck in time. In real
estate, the difference between thriving and surviving often comes down to the same
thing. Those who adapt to new tools, new markets, and new client expectations
remain relevant. Those who don’t fade into memory.
Legacy Over Titles
No one at a 50th reunion
brags about their job title or income. The conversation turns to family,
friends, and impact. That perspective hit me deeply. In commercial real estate,
we can get consumed by the next deal or the next commission check. Yet, in the
end, our legacy is not measured by the size of our portfolio but by the
reputation we built and the people we helped along the way.
The Long Game Always Wins
Some of the strongest
friendships in that room began with small moments fifty years ago. The same is
true in brokerage. A quick conversation, a handwritten note, or an act of
service can echo decades later. The long game always rewards those who play it with
consistency and care.
Fifty years of shared
history reminded me that success in both life and commercial real estate is
about connection, character, and commitment. The deals come and go. The
relationships endure.
Allen C. Buchanan,
SIOR, is a principal with Lee
& Associates Commercial Real Estate Services in Orange. He can be reached
at abuchanan@lee-associates.com or 714.564.7104. His website
is allencbuchanan.blogspot.com.
M
any family-owned businesses face this reality at
some point: you decide to sell your company.
Congratulations! It’s the culmination of years,
maybe decades, of hard work. But if your business occupies real estate, whether
owned by a related entity or leased from a third party - there’s another big
question: what happens to the building?
The answer depends largely on whether your
company owns the property
through a related entity or simply leases space from an unrelated landlord. Each path requires a different
strategy.
Scenario One: Owned Real Estate
If your operating business occupies a building owned
by you or a related entity, several options emerge:
Sell the real estate before the business sale. You can sell the building to an owner - occupant and arrange to
vacate once the company transaction closes. This separates the real estate deal
from the business deal, providing clarity for all parties.
Lease the building to the buyer of the business. Instead of selling, you might keep the property and sign a lease
with the buyer of your company. This allows you (or your family entity) to
continue collecting rental income long after the business changes hands.
Formalize a lease before the sale of the business. Another option is to establish a lease between the related
entity (property owner) and the operating company before selling. This locks in occupancy terms, giving the buyer
certainty and making the business sale potentially more attractive.
Scenario Two: Leased Real Estate
If your company rents from an unrelated,
arm’s-length landlord, the conversation is different. In this case, the
business buyer will want to know:
• How much time is left on the lease?
• Are there options to renew or expand?
• Is the rental rate market-competitive?
A strong lease can be an asset to the sale, while an
expiring or above-market lease can become a liability. In many cases,
negotiating an extension or adjustment with the landlord before selling the
business can smooth the path for a transaction.
Why This Matters
Buyers aren’t just purchasing your business
operations - they’re buying continuity. If the real estate arrangement is
murky, the deal becomes more complicated. By addressing how the building fits
into the transaction, you eliminate uncertainty, increase buyer confidence, and
often enhance the overall value of the sale.
Final Thought
Selling a business is one of the biggest financial
and emotional decisions a family will ever make. Don’t let the real estate
piece become an afterthought. Whether you own or lease, work with advisors who
can help you consider all potential directions so you can move on to your next
chapter with peace of mind.
Allen C. Buchanan,
SIOR, is a principal with Lee
& Associates Commercial Real Estate Services in Orange. He can be reached
at abuchanan@lee-associates.com or 714.564.7104. His website
is allencbuchanan.blogspot.com.
Imagine buying a property only to discover that
hidden underground tanks are leaking fuel into the soil, or that decades ago a
dry cleaner left behind chemicals that still linger beneath the surface.
Suddenly, your new investment comes with a multi-million-dollar cleanup bill.
That’s the risk posed by a little-known acronym:
REC, short for Recognized Environmental Condition. And if you’re buying,
selling, financing or potentially leasing commercial real estate, it’s
something you need to understand.
What is a REC?
In the commercial real estate world, a REC means
there is the presence or likely presence of hazardous substances or petroleum products on a property.
These conditions may come from:
• A past or current release of contaminants into the soil, water, or
air.
• Evidence suggesting a release might have happened, like stained soil
or corroded barrels.
• Circumstances that pose a material threat of a future release.
Think of a REC as a red flag during due diligence.
Just like a cracked foundation might derail a home purchase, a REC can bring a
commercial deal to a grinding halt.
Why Lenders and Buyers Care
A REC isn’t just an environmental issue, it’s a
financial one.
• Financing: Banks typically require a clean environmental report before
approving a loan. If a REC is flagged, the deal may be delayed, restructured,
or even killed.
• Liability: Under federal and state laws, the new property owner could
be held responsible for cleanup, even if they didn’t cause the problem.
• Value: Properties with RECs often appraise lower and can sit on the
market longer.
How the Process Works
When an industrial or commercial property changes
hands, buyers usually commission a Phase I Environmental Site Assessment (ESA).
This involves reviewing past records, inspecting the property, and interviewing
current or former operators.
If the Phase I flags a REC, the next step is a Phase
II ESA, which involves testing soil, groundwater, or air to confirm whether
contamination exists.
Depending on results, options include:
• Remediation (removing or treating the contamination).
• Seeking regulatory closure if issues have already been addressed.
• Purchasing environmental insurance to cover potential risks.
• Negotiating price adjustments to reflect the added risk.
Historical and Controlled RECs
Not all RECs are created equal.
• HREC (Historical REC): A past issue that’s been resolved to
regulators’ satisfaction and no longer poses a risk.
• CREC (Controlled REC): A contamination issue that remains, but with
restrictions in place (for example, limiting property use to industrial
operations only).
While these don’t always kill deals, they do shape
how a property can be used and what obligations an owner inherits.
How Buyers and Sellers React
For buyers, a REC means choices: walk away,
renegotiate price, or push the seller to pay for further testing or cleanup.
For sellers, a REC can mean offering concessions, securing insurance, or even
cleaning up the property in advance to avoid surprises in escrow.
The Bottom Line
A REC doesn’t always spell disaster for a
transaction. But it always changes the dynamics. Buyers, sellers, and brokers
who understand how RECs work can work through the challenges, avoid liability
and keep deals alive.
In commercial real estate, knowledge isn’t just
power. It’s protection.
Allen C. Buchanan,
SIOR, is a principal with Lee
& Associates Commercial Real Estate Services in Orange. He can be reached
at abuchanan@lee-associates.com or 714.564.7104. His website
is allencbuchanan.blogspot.com.
I recently guested on a podcast called The Industrial Real Estate Podcast. You see, its
host, Chad Griffiths, is a fellow industrial real estate broker and Society of
Industrial and Office Realtor. We share a passion for industrial real estate
and authoring books about our craft - his, Industrialize, and mine The SEQUENCE.
Our sixty minutes together was not quite Mike Wallace worthy, but for two
professionals geeking over truck doors it was close.
As I reflected on our conversation, a thought
occurred. In the time Chad and I have brokered - Chad over twenty years and I
over forty - how many classes of industrial real estate have become obsolete?
As the mind dump morphed into a review, I believed
it to be column-worthy. So here goes.
Concrete Block Structures
In the 1960s and 70s, the standard for small to
mid-sized warehouses in Southern California was concrete block. At the time, it
was inexpensive, durable, and easy to build. Fast forward a few decades and
block buildings fell out of favor. Why? They were prone to cracking, offered
limited design flexibility, and were far less energy-efficient than tilt-up
concrete panels. Today, investors look at a block structure and immediately
calculate how much it will cost to either retrofit it for earthquake safety or scrape
it altogether.
Warehouses with Ceiling Heights Shorter than 24 Feet
What was once considered “plenty of clearance” is
now laughably short. In the 1980s, 16–20 feet clear worked just fine when
distribution was more about floor stacking and hand-moving pallets. Then came
the rise of racking systems, e-commerce fulfillment, and the drive for cubic
efficiency. A 20-foot clear building today is relegated to mom-and-pop
distributors or creative reuses like breweries and gyms. Institutional tenants
won’t touch them. Twenty-four feet is the minimum bar now, with 32–36 feet quickly
becoming the new normal.
Buildings with Insufficient Loading for Large Trucks
Dock-high loading once meant a few truck wells
tucked into a building’s backside. That was fine when trucks were smaller and
supply chains less demanding. Now, tenants expect wide truck courts, multiple
dock positions, and a minimum of 130-foot depth for maneuvering 53-footers. A
shallow court or limited dock access instantly disqualifies a building from
consideration. In fact, I’ve had clients walk away from otherwise functional
properties simply because the loading couldn’t accommodate modern logistics.
Warehouses Converted to Telecom Hubs in the Late
1990s
During the telecom boom, a frenzy of
industrial-to-telecom conversions swept across the market. Warehouses were
gutted, generators added, and raised floors installed to handle racks of
equipment. When the bubble burst, many of these facilities sat dark, expensive,
and ill-suited for their original purpose. Few could be economically converted
back to warehousing. They became the white elephants of the industrial world,
proving how risky it can be to over-specialize a building.
Pre-Dot Com Data Centers
Much like the telecom conversions, the first wave of
data centers built before the dot-com collapse were designed for a world that
never fully arrived. Oversized chillers, underutilized floor space, and
outdated cabling left them obsolete within a decade. While the need for data
centers eventually exploded, it was the next generation - purpose-built,
hyper-efficient facilities - that captured the market. The early ones often
limped along, trading hands at discounts before being demolished or radically reconfigured.
Research and Development (Flex) Buildings
Once the darling of the 1980s and 90s, flex R&D
buildings were designed with equal parts office, light manufacturing, and lab
space. They attracted tech startups, defense contractors, and medical firms.
But as industries changed, those needs shrunk or migrated into either pure
office towers or specialized industrial campuses. Flex buildings with 50%
office and 50% warehouse became hard to lease. The market wanted either full
warehouse/distribution or Class A creative office - not the in-between. Today,
many flex projects have been scraped, converted to logistics buildings, or
repositioned for other uses.
Final Thought
Obsolescence in industrial real estate is both
predictable and instructive. What was “state of the art” in 1985 may be
functionally useless today. Brokers, investors, and occupants alike should
remember: buildings have life cycles just like everything else. The trick is
recognizing when a feature is no longer an asset but a liability - and acting
before the market forces your hand.
Allen C. Buchanan,
SIOR, is a principal with Lee
& Associates Commercial Real Estate Services in Orange. He can be reached
at abuchanan@lee-associates.com or 714.564.7104. His website
is allencbuchanan.blogspot.com.
As I write this, I’m
looking out over the vast blue Pacific Ocean. My wife, Carla, and I decided to
splurge for our 46th wedding anniversary. The horizon stretches endlessly, a
full moon reflects on the ocean, waves roll in with steady crashing, and I can’t
help but reflect on our life together.
You may wonder - what does
being married since the Carter administration have to do with commercial real
estate?
Bear with me. I believe
who you love and with whom you choose to spend your life matters foundationally
to building a successful career. In my case, Carla’s patience, wisdom, and
encouragement have been the bedrock under everything I’ve accomplished in brokerage.
And along the way, I’ve learned a few lessons that apply equally well to
marriage and to commercial real estate.
Commitment Outlasts Market
Cycles
Marriage requires
commitment - not just when things are easy, but through the tough times too.
Real estate is no different. Since I began in the early 1980s, I’ve watched
interest rates soar, the savings and loan crisis unfold, bubbles inflate, and
recessions squeeze the market. Through it all, commitment - whether to a
client, a property, or the process - proved more valuable than chasing
short-term gains. Just as in marriage, staying the course yields long-term
rewards.
Communication is
Everything
After 46 years, Carla and
I still occasionally misunderstand each other. But we’ve learned to keep
talking, keep listening, and keep clarifying. The same principle applies in
commercial real estate. Deals collapse when communication falters. Clients don’t
expect perfection; they expect honesty. A simple phone call explaining a
setback can preserve trust better than any contract clause.
Patience Produces Fruit
No one celebrates 46 years
without patience. There were times when raising kids, building careers, and
paying bills felt overwhelming. But patience - trusting that small investments
of time and effort compound - got us through. Commercial real estate rewards
patience as well. Transactions can drag on, negotiations can stall, and
entitlement processes can feel endless. Yet patience, paired with persistence,
is often the difference between a failed deal and a successful close.
Shared Values Create
Alignment
Carla and I built our life
on shared values: faith, family, and integrity. Those values guided decisions
on where to live, how to raise children, and even how to face hardship. In
brokerage, I’ve found that values alignment with clients is equally important.
Not every prospect is a fit. When you align with those who share your values -
fairness, transparency, long-term thinking - the relationship flows, and the
work is more rewarding.
Adaptability is Survival
Marriage is a constant
process of adaptation. People grow, circumstances shift, and unexpected
challenges arise. Carla and I had to adapt when careers changed, when children
left home, and when new seasons of life arrived. In real estate, adaptability
is equally critical. A strategy that worked in one market cycle may not work in
another. Brokers who survive are those who adjust without abandoning their
foundation.
Closing Reflection
Looking out at the
Pacific, I’m struck by how steady and timeless it feels. Yet even the ocean is
always in motion, waves constantly breaking and reforming. That’s marriage.
That’s commercial real estate. Both require a balance of commitment and
flexibility, patience and action, values and adaptability.
As I celebrate 46 years
with Carla, I’m reminded that no career is built in isolation. The
relationships that anchor us at home often provide the resilience and
perspective we need in business. Success, in life and in real estate, rests not
only on the deals we make but on the people who walk with us through the
journey.
