Our
travels took us to the heartland of America, Oklahoma City, Oklahoma. We had a
bit of soul searching to do and some some spare time so we visited the Oklahoma
City museum which commemorates the horrific event of April 19, 1995. Although
no monument can remember the 168 people who perished that day, the thousands
injured or the countless families changed forever by one heinous act, the
memorial is tasteful, poignant, and impactful.
You
may be wondering what this has to do with commercial real estate? Indulge me as
I recount a few lessons learned.
The
first lesson involves the power of the built environment. Standing on the
grounds of the memorial, one quickly realizes that thoughtful design can carry
extraordinary meaning. The reflecting pool rests where a city street once ran.
The field of empty chairs quietly represents each life lost that day. The
Survivor Tree, scarred yet standing, symbolizes resilience and hope. None of
these elements shout for attention, yet together they communicate something
profound.
As
commercial real estate professionals we often spend our days discussing square
footage, lease rates, zoning, financing, and market conditions. Those metrics
matter and they drive decisions. But occasionally we are reminded that
buildings and land can carry something far more meaningful. The spaces we help
create and shape ultimately become part of the stories of the people who occupy
them. Offices are where businesses grow, warehouses support livelihoods, and
storefronts become gathering places for communities. Real estate is not merely
physical space. Over time it becomes part of human experience.
A
second lesson is the strength of community. The bombing destroyed a building
and took innocent lives, yet it did not destroy Oklahoma City. In the days that
followed, first responders, volunteers, and ordinary citizens came together in
ways that still resonate today. The rebuilding that occurred was not just
structural. It was emotional and civic. The memorial stands today not simply as
a reminder of tragedy but as evidence of how a community can respond with
dignity, resolve, and unity.
Commercial
real estate often plays a role in these moments of recovery. Cities evolve.
Neighborhoods change. Buildings are repurposed or replaced. Through it all,
people continue to invest in places where businesses can operate and
communities can gather. The physical structures may change, but the underlying
strength of a community often becomes even more visible during times of
adversity.
A
third lesson centers on purpose. The land where the Alfred P. Murrah Federal
Building once stood could have been redeveloped in countless ways. Instead, it
became sacred ground dedicated to remembrance, education, and hope. The
memorial was not designed to generate income. It was created to honor lives,
teach future generations, and provide a place for reflection.
That
decision speaks volumes about the role land can play within a community. In our
profession we often evaluate property through the lens of value, return, and
highest and best use. Those are appropriate considerations. Yet occasionally
the highest and best use of a property is not measured in dollars per square
foot. Sometimes it is measured in the meaning it holds for the people who visit
it.
Walking
through the memorial reminded me that land and buildings often become far more
than the structures originally envisioned. They become places where life
unfolds. They carry memories, celebrate achievements, and sometimes help
communities heal.
For
those of us who make a living in commercial real estate, that perspective is
worth remembering. The properties we work on today may someday become part of
stories we cannot yet imagine.
I’m
penning this column from America’s heartland, Oklahoma City. According to the Oklahoma
Historical Society, Oklahoma City (OKC) has been a major hub for the oil
industry since the late 1920s. The Oklahoma City Oil Field, which was
discovered in 1928, extends into the city limits and historically included, and
even to this day still produces from, areas around the Oklahoma State Capitol.
My
thoughts went toward what’s happening in the Strait of Hormuz and oil’s impact
on the United States economy and, more specifically, commercial real estate.
What
follows is how a rise in oil prices affects us.
Oil
is one of the most important inputs in the global economy. When the price of
oil rises sharply, the effects ripple outward through transportation,
manufacturing, consumer spending, and ultimately the real estate that houses
those activities.
Consider
transportation first. Oil fuels the movement of goods across the country.
Trucks, trains, ships, and airplanes all rely heavily on petroleum-based fuels.
When oil prices climb, the cost of moving products increases. Higher freight
costs work their way into supply chains, increasing the cost of everything from
raw materials to finished goods.
For
industrial real estate, this dynamic can create both pressure and opportunity.
Companies facing higher transportation costs often seek greater efficiency in
their logistics networks. That can increase demand for well-located
distribution facilities closer to major population centers and transportation
corridors.
A
rise in oil prices also contributes to inflation. Oil is not only a consumer
product but a key industrial input. When energy costs rise, businesses
typically pass at least a portion of those increases on to consumers. Over
time, higher energy costs can lead to broader inflation across the economy.
Inflation,
in turn, influences interest rates. When inflation rises, central banks often
respond by tightening monetary policy. Higher interest rates increase borrowing
costs for businesses and investors. In commercial real estate, that can affect
everything from property values to the feasibility of new development.
Not
every region reacts the same way to higher oil prices. Areas tied closely to
the energy industry often benefit when oil prices rise. Increased drilling
activity, expanded energy services, and job growth can stimulate local
economies.
Cities
like Houston, Midland, and Oklahoma City have historically seen economic
tailwinds when oil prices strengthen. Increased activity in the energy sector
often leads to additional demand for office space, industrial facilities, and
housing.
At
the same time, regions heavily dependent on transportation, tourism, or
energy-intensive manufacturing may feel the negative side of rising oil prices
more directly.
There
is also the factor of uncertainty. Oil price spikes frequently coincide with
geopolitical tensions, such as those currently surrounding the Strait of
Hormuz. When businesses perceive risk in the global economy, they tend to slow
expansion decisions. Leasing activity may pause, capital investment can be
delayed, and corporate occupiers often adopt a more cautious stance.
Yet
higher energy prices can also accelerate structural changes in the economy.
Companies may shorten supply chains, bring production closer to home, or invest
in more efficient logistics systems. Each of these shifts has implications for
commercial real estate, particularly in the industrial sector.
Oil
has always been more than a commodity. It is a signal about the health and
direction of the global economy. When oil prices rise, the ripple effects
eventually reach the buildings where we work, manufacture, store, and
distribute goods.
From
the vantage point of Oklahoma City, where oil has been part of the economic
fabric for nearly a century, the connection between energy and real estate is
clear. The price of oil may be determined in global markets, but its impact is
felt locally, often in the commercial buildings that support our economy.
After
over four decades in commercial real estate, I have watched countless brokers
walk into listing presentations confident they would secure the assignment,
only to walk out without it. When that happens, they often blame the fee, the
competition, or the market. In reality, the reasons are usually much simpler
and far more controllable.
In
my experience, brokers fail to secure agency assignments for four primary
reasons.
The
first mistake is making the presentation about themselves rather than about the
owner and the property. Experience matters. Production matters. Reputation
matters. However, owners are not hiring a résumé. They are hiring someone to
solve a problem. When a broker spends most of the meeting reciting awards,
years in the business, and transaction volume, they unintentionally shift the
focus away from the very person they are trying to serve.
Owners
are sitting across the table wondering whether the broker understands their
property, their timing, their financial objectives, and any pressures they may
be facing. They want to feel heard. They want to feel understood. When the
conversation centers on the broker’s accomplishments instead of the owner’s
needs, confidence erodes. The most effective listing presentations are built
around thoughtful questions, careful listening, and a clear demonstration that
the broker truly understands the assignment.
The
second reason brokers lose listings is that they fail to clearly articulate
what makes the property unique in the marketplace. Every building has
distinguishing characteristics. Location, access, parking, configuration,
tenant mix, zoning, expansion potential, functional limitations, and
redevelopment possibilities all play a role in how the property should be
positioned. Yet too many presentations rely on generic marketing plans that
could apply to almost any asset.
Owners
deserve more than a promise to place the property into the brokerage community
and send out email announcements. They want to know why a buyer or tenant would
choose their property over the competing options down the street. They want to
understand the likely target audience and how the property will be positioned
to that audience. A broker who cannot clearly explain the property’s
competitive advantages, while also acknowledging and planning around its
weaknesses, will struggle to inspire confidence. Strong brokers position
properties strategically. Average brokers simply expose them to the market and
hope for the best.
The
third mistake involves process. Owners are not merely seeking a number; they
are seeking an outcome. Ideally, they want the highest price the market will
bear, achieved within a reasonable period of time and with minimal disruption
to their operations or tenants. What many brokers fail to do is clearly explain
how they intend to deliver that outcome.
A
thoughtful presentation should outline how the property will be prepared for
the market, how pricing will be evaluated and refined, how prospective buyers
or tenants will be identified and approached, how negotiations will be handled,
and how the transaction will be managed from contract through closing. When
this roadmap is missing, the broker may sound enthusiastic but not organized.
Owners are placing a valuable asset into someone’s hands. They want to see
structure, discipline, and a clear path forward.
The
fourth and often most damaging mistake is locking into a single price as though
it were absolute. Markets are fluid. Interest rates shift. Capital markets
tighten or expand. Competing properties enter the market. Owner circumstances
change. A pricing recommendation should be part of a broader strategy, not a
rigid declaration.
Sophisticated
owners understand that value is dynamic. A strong broker prepares them for
multiple scenarios, discussing what might happen if activity is brisk, if it is
slower than anticipated, or if market conditions change during the marketing
period. By framing pricing as a strategy that can adapt to real-time feedback,
the broker demonstrates awareness and flexibility. When a broker becomes
emotionally attached to one number and defends it without regard to changing
conditions, credibility suffers.
At
its core, securing a listing is not about impressing an owner with accolades or
confidence alone. It is about demonstrating understanding, clarity, strategy,
and adaptability. Owners are entrusting brokers with significant financial
decisions. They want someone who sees the property clearly, understands the
market honestly, and can guide them through a defined process with steady
hands.
The
brokers who consistently secure agency assignments are not necessarily the
loudest or the most decorated. They are the ones who make the conversation
about the owner, position the property intelligently, outline a clear plan of
execution, and remain flexible as circumstances evolve. In the end, clarity
wins listings.
I am penning this column from Austin, Texas.
My company, Lee & Associates descended upon ATX for our annual Lee
University, two days of intensive learning for Associates with fewer than five
years in the business. Bright minds. Hungry professionals. The future of our
industry.
I had the privilege of teaching The SEQUENCE, the framework I use to
manage every transaction. Source. Evaluate. Qualify. Under Control. Execute.
Negotiate and Close. Commission. Expand.
Epic.
Today’s focus, however, was Artificial Intelligence and its impact on
commercial real estate.
As I sat in that room, one thought kept surfacing.
Where are our competitors headed with AI?
Because they are headed somewhere.
AI will not replace brokers. It cannot build trust. It cannot sit
across from a nervous seller and create calm. It cannot read emotion or sense
hesitation.
But it can analyze data in seconds. It can draft marketing copy in
minutes. It can summarize leases instantly. It can identify ownership patterns.
It can model scenarios. It can compress hours of research into moments.
And in brokerage, time is leverage.
The broker who learns to use AI effectively will not necessarily work
longer hours. They will extract more productivity from every hour they work.
That matters.
Commercial real estate is not known for early adoption. We are
relationship driven and precedent oriented. Yet history tells a clear story.
The brokers who adopted email early gained speed. The brokers who embraced CRM
systems built deeper databases. The brokers who leaned into social media built
brand authority.
AI will follow the same path.
Right now, many are experimenting. A few are integrating. Very few are
systemizing.
That gap is where separation will occur.
The risk is not that AI becomes too powerful. The risk is that your
competitor becomes too efficient.
Imagine two brokers pitching the same assignment. One assembles
materials manually and relies on past knowledge. The other uses AI to analyze
absorption trends, identify off market prospects, refine pricing strategy, and
deliver a sharper narrative because more time was spent thinking strategically
instead of gathering data.
Who appears more prepared?
Who wins?
Technology has always widened the gap between those who lean in and
those who resist. AI will do the same.
Here is what I believe. AI will elevate the organized. The curious.
The disciplined. The systems driven broker.
It will not create work ethic. It will not replace judgment. If
anything, it will make experience more valuable because when information
becomes commoditized, interpretation becomes premium.
As I looked out at that room in Austin, I did not feel threatened by
AI. I felt energized.
The next generation will not view this as disruption. They will see it
as normal.
Pair relationship mastery with structured process. Add negotiation
skill and market knowledge. Layer in intelligent AI usage.
That combination will not just survive the shift. It will lead it.
AI is not coming. It is here.
The question is simple.
Will you use it to multiply your effectiveness?
Or will you compete against someone who does?
From Austin, Texas, I suggest leaning in.
The separation has already begun.
As
commercial real estate professionals, our clients typically hire us for one of
a handful of assignments. Broadly speaking, those assignments fall into two
categories: the occupant side and the owner side.
You
recognize an occupant requirement when a company is searching for space to
occupy, what we commonly call buyer representation or tenant representation.
On
the other side of the table, an owner hires us to fill a vacancy with a tenant
or a buyer, or depending on the situation, to sell a leased building to an
investor.
In
my practice, I do both.
Which
assignment is more difficult and why?
My
short answer is, it depends. But since I have a bit more column space, let us
explore the question more thoroughly, shall we?
Let
us begin with the occupant side.
Representing
a tenant or buyer often feels like detective work. You are handed a requirement
that may or may not be fully formed. “We need 20,000 square feet.” “We want to
own instead of lease.” “We are bursting at the seams.” Those statements are
starting points, not conclusions.
The
challenge is uncovering the true need. Is the space requirement based on
headcount today or projected growth tomorrow? Is ownership driven by balance
sheet strategy, ego, or a long term operational advantage? Is the urgency real
or manufactured?
Occupant
representation requires patience, probing questions, and occasionally the
courage to slow a client down. Many times the hardest part is protecting them
from themselves. I have seen companies chase shiny buildings in the wrong
location, overcommit to space they cannot afford, or underestimate the cost of
relocation. The difficulty lies in aligning financial reality, operational
necessity, and emotional desire into a decision that makes sense five and ten
years from now.
Now
consider the owner side.
Representing
an owner introduces a different kind of complexity. The product exists. The
vacancy is real. The carrying costs are tangible. Time is measurable in monthly
mortgage payments and operating expenses.
Here,
the challenge is often market driven. You cannot manufacture tenant demand. You
cannot force interest rates lower. You cannot single handedly compress cap
rates or accelerate absorption.
An
owner’s expectations may be shaped by yesterday’s market rather than today’s.
Rents achieved two years ago may not be achievable now. A building that was
once the belle of the ball may suddenly compete with newer, more functional
inventory.
The
difficulty on the owner side is managing expectations while protecting value.
Pricing too aggressively can result in prolonged vacancy. Pricing too
conservatively can leave money on the table. Marketing strategy, timing,
positioning, and negotiation all become critical levers.
So
which is more difficult?
When
representing an occupant, you are often managing ambiguity. The assignment is
fluid. The criteria can shift. Corporate leadership can change direction
midstream. You are guiding strategy as much as executing it.
When
representing an owner, you are managing exposure and risk. Every day a space
sits vacant, there is a cost. Every rejected offer carries consequence. You are
balancing urgency with discipline.
In
strong markets, owner representation can feel easier because demand masks
imperfections. In soft markets, it can feel like pushing a boulder uphill.
Conversely, occupant representation can be simpler when options are plentiful
and leverage is strong, and far more challenging when inventory is scarce and
competition is fierce.
The
truth is that neither side is inherently more difficult. They are difficult in
different ways.
One
requires uncovering the truth behind a requirement. The other requires
confronting the truth about the market.
One
demands internal clarity. The other demands external realism.
Perhaps
the better question is not which assignment is more difficult, but which
responsibility is greater.
In
both cases, our role is the same. We are fiduciaries. We are counselors. We are
translators between emotion and economics.
Whether
I am helping a business secure a home for its operations or assisting an owner
in monetizing an asset, the stakes are significant. Jobs are affected. Capital
is deployed. Long term plans are shaped.
So
when asked which side is harder, I return to my original answer. It depends.
It
depends on the market. It depends on the client. It depends on the expectations
brought to the table.
What
does not depend on anything is the need for preparation, honesty, and
experience. On either side of the equation, difficulty tends to diminish when
clarity increases.
And
clarity, more often than not, is what we are truly hired to provide.
Yesterday, I sat on our daughter’s sofa festooned
with big game regalia. You see, it was Super Bowl Sunday, they coined “Harper
Bowl.” A cute and effective way to frame the big game. The decibel level was
akin to an Elton John concert, not because of the TV volume but from the
excited youngsters born from close to twenty families.
As the LX logo appeared, what dawned on me was this.
I have watched EVERY Super Bowl since its inception in 1967 as the Packers of
Green Bay squared off against the Kansas City Chiefs.
But as my thoughts drifted to the week ahead, I
wondered what commercial real estate lessons would be learned from this year’s
extravaganza. Stay tuned, there were several.
For this exercise, I looked at the game through the
lens of the Seattle Seahawks. Not the pageantry. Not the commercials. Not the
halftime show. But the way championship teams are built and how that mirrors
success and failure in commercial real estate.
Here is what stood out.
Championships Are Built Long Before Game Day. No Super Bowl is won on Sunday alone. It is the product of years of
drafting, development, coaching continuity, discipline, and systems. The
Seahawks’ success, has never been about a single star. It is about preparation
and patience.
Commercial real estate is no different. Deals do not
close because of one heroic phone call. They close because of months or years
of relationship building, market knowledge, repetition, and process. By the
time a transaction reaches the finish line, the real work has already been
done.
Defense Matters More Than Flash. The Seahawks’ identity has long been rooted in defense,
controlling the line, limiting mistakes, and forcing the opponent to earn every
yard. It is not glamorous, but it wins games.
In commercial real estate, defense is underwriting,
due diligence, lease language, timelines, and managing expectations. It is
knowing when not to do a deal. The brokers who last are rarely the flashiest.
They are the ones who protect their clients and their reputations.
Systems Beat Talent Alone. Every Super Bowl roster is filled with talented players. What
separates champions is how those players perform within a system. Assignment
football. Do your job. Trust the structure.
This is where many brokers wash out. Talent without
structure leads to inconsistency. Systems, how you source, qualify, control,
execute, and close, create repeatable success. The best brokers do not rely on
memory or motivation. They rely on process.
Special Teams Decide Close Games. Games often turn on field position, penalties, clock management, and
execution when no one is watching. Special teams do not get headlines, but they
swing outcomes.
In our business, special teams are follow-ups,
summaries, documentation, communication cadence, and closing logistics. Clients
remember how a deal felt. Sloppy execution at the end can undo months of great
work.
The Team Always Wins or Loses Together. No one wins a Super Bowl alone. Coaches, players, trainers,
scouts, and support staff all matter.
The same holds true in commercial real estate. The
most durable careers are built with transaction coordinators, analysts,
mentors, partners, and cooperative brokers. Lone wolves burn out. Teams endure.
As the last confetti fell and Monday arrived, the
Super Bowl faded quickly. But the lessons do not have to. Whether on the field
or in the marketplace, success is rarely accidental. It is built deliberately,
patiently, and with discipline.
And that is a game worth studying.
Every
real estate deal has a clock. Sometimes that clock moves fast. Sometimes it
slows down because the buyer needs time.
That
time might be for a board approval. It might be for a tax deferred exchange to
line up. It might be for a buyer of land who wants to secure entitlements
before taking ownership.
When
that happens, sellers usually ask the same question.
Why
should I wait?
The
answer depends on the market.
In a Strong Market, Time
Is a Concession. In a strong market, sellers have
options. Buyers are plentiful. Properties move quickly. When a buyer asks for
extra time, it feels unnecessary and risky.
That
reaction makes sense.
Waiting
in a strong market means giving up flexibility. It means passing on other
buyers. It means betting that nothing changes while the clock runs.
That
is why sellers in strong markets rarely agree to wait unless they are
compensated.
That
compensation can come in several forms.
A
higher price.
Money
that becomes non refundable.
Clear
deadlines that limit how long the seller is committed.
In a
strong market, time has value. If a buyer needs more of it, the seller should
be paid for it.
In a Weak Market, Time
Can Be an Advantage. Down markets tell a different
story. When activity slows, buyers become cautious. Financing tightens.
Fewer offers come in. Sellers often discover that speed is no longer the prize
it once was.
In
those markets, a buyer willing to work through approvals or conditions can be
valuable, not problematic.
Time
in a weaker market can mean progress instead of stagnation. It can mean a deal
that moves forward while others sit still. It can mean locking in a committed
buyer when alternatives are uncertain.
In
those situations, waiting may reduce risk rather than increase it.
Not All Delays Are the
Same. Regardless of the market, sellers should understand why a buyer
needs time.
There
is a big difference between a buyer who must complete a specific step and one
who is simply unsure.
Approvals
with clear timelines are different from open ended requests. A tax deferred
exchange with a signed sale is different from one that is still theoretical.
Entitlements already in process are different from those that have not yet
begun.
The
clearer the reason and the timeline, the safer the delay.
What Sellers Should Focus
On. Whether the market is strong or weak, sellers should focus on
three simple questions.
Is
the buyer committed.
Is
the timeline clear.
Am I
being protected while I wait.
If
those questions are answered well, waiting can make sense. If they are not, it
usually does not.
The Bottom Line. In
strong markets, waiting is a concession and should be treated as one.
In
weaker markets, waiting can be a strategy.
The
key is understanding the difference and structuring the deal accordingly.
Time
is neither good nor bad. It is simply a tool.
Used
properly, it can close deals. Used carelessly, it can cost them.
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.
