Father’s Day Lessons from the U.S. Open

I lost my dad six years ago. He was a really fine golfer. Not a casual weekend player, but the kind of golfer who understood the game, respected its traditions, and appreciated the challenge that comes from trying to master something you never truly conquer.

It seemed fitting that I spent part of today watching the U.S. Open Championship.

After breakfast with family, it was time to tune in. Each year, the tournament concludes on Father’s Day, and this year’s finish did not disappoint. It was a thriller. Wyndham Clark captured the championship with a one-shot victory that came down to the 72nd hole. Under immense pressure, he trusted his swing, trusted his preparation, and walked away with one of golf’s most coveted trophies.
You may be wondering what any of this has to do with commercial real estate.
Indulge me as I draw a few parallels.

Mental Toughness Matters. The U.S. Open is often described as golf’s toughest test. The rough is thick. The greens are unforgiving. One poor decision can undo four days of brilliant play.

Commercial real estate isn’t much different.

Deals fall apart. Financing changes. Buyers hesitate. Sellers get emotional. Tenants rethink their plans. Markets shift.

The brokers who survive, and thrive, are not necessarily the smartest or the most talented. Often, they’re simply the most resilient. They understand that setbacks are part of the process and that success frequently belongs to those who keep moving forward after disappointment.

Timeless Fundamentals Win. One of the things I love about championship golf courses is that many were designed long before modern technology changed the game. They were built before diesel-powered earthmovers, GPS-guided grading equipment, and computer modeling.

Yet they continue to challenge the world’s best players.

Why?

Because great design never goes out of style.

The same can be said for commercial real estate. Technology changes. Marketing platforms evolve. Data becomes more sophisticated.

But the fundamentals remain remarkably consistent.

Build relationships. Create trust. Understand your client’s needs. Communicate clearly. Solve problems. Follow through.

Those principles worked thirty years ago. They’ll work thirty years from now.

World-Class Competition. The U.S. Open attracts the best golfers on the planet. Every player in the field has talent. Every player has won somewhere. Every player believes they can win.
Commercial real estate can feel the same way.

In virtually every market, there are excellent brokers competing for listings, assignments, and opportunities. The difference between winning and losing is often measured in preparation, persistence, and execution, not raw ability.

When everyone is talented, details matter.

There Is Only One Trophy. At the end of the week, there is only one champion.
Hundreds of players compete. One hoists the trophy.

Brokerage isn’t winner-take-all to the same extent, but there is an important lesson here. Every assignment has a successful outcome. Every client ultimately selects a representative. Every building gets sold or leased by someone.

You don’t have to win every opportunity.

But you do need to be prepared when your opportunity arrives.

Trust the Process. Perhaps the greatest lesson golf teaches is the importance of process.
The best players focus on preparation, routine, and execution. They cannot control every bounce, gust of wind, or lucky break. They can only control their process.

That lesson resonates deeply with me.

Throughout my career, I’ve learned that the best brokers focus less on outcomes and more on controlling the process. Ask the right questions. Qualify carefully. Stay organized. Communicate consistently. Do the work.

When you trust the process, good outcomes tend to follow.

A Father’s Legacy. As I watched today’s final round, I couldn’t help but think about my dad.
Golf was one of the many lessons he left behind. Not just how to swing a club, but how to handle adversity, maintain composure, and compete with integrity.

Those lessons extend far beyond the golf course.

They apply in business. They apply in life. They certainly apply in commercial real estate.
So today, as we celebrate Father’s Day, I’m grateful for family, grateful for memories, and grateful for the enduring lessons that fathers pass along, sometimes intentionally, sometimes simply by example.

And if those lessons happen to come while watching the U.S. Open on a Sunday afternoon, all the better.

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.
 
 

Lee Summit

I’m penning this from a hotel room overlooking Nashville, Tennessee. This year, our company re-routed our annual Summit from Las Vegas. I can’t quite see Broadway Street but I’m sure it’s sound asleep as it tends to stay up very late. My hope is it didn’t inflict too much damage on our attendees last evening, but I digress.
 
This year marks my umpteenth meeting - I stopped counting some time ago - but I’m excited to see old friends, meet some new ones, and learn a bit about all things commercial real estate.
 
As I start year 43 in this industry, here are five things I’ll anticipate. At this year’s Summit.
 
1. The Economy Will Remain the Headliner. No commercial real estate conference would be complete without experts armed with charts, graphs, and predictions. Interest rates, inflation, employment, consumer confidence, the war in Iran, and capital markets will all take center stage. While none possess a crystal ball, understanding the what’s happening around the nation, helps us make better decisions for our clients.
 
2. Industrial Real Estate Will Continue to Evolve. For years, industrial properties have been the darling of commercial real estate. While demand is returning, the conversation has shifted. Tenants and buyers are becoming more selective. New development has created competition in certain markets. Occupants are evaluating efficiency, automation, labor availability, and location more carefully than ever. The days of simply putting a sign on a building and watching tenants line up may be behind us.
 
3. Artificial Intelligence Will Be Everywhere. If the last three years were about discovering AI, the next few years will be about applying it. From underwriting, market analysis, vibe coding, marketing and client communications, artificial intelligence is becoming a meaningful productivity tool. It won’t replace brokers, investors, developers, or property managers, but it will likely replace those who refuse to learn how to use it.
 
4. Relationships Will Still Matter Most. Technology changes. Markets cycle. Interest rates rise and fall. What remains constant is the value of relationships. Many of these attendees and I started our careers together in the 1980s when our company expanded from one El Toro, California location. We’re over eighty offices strong now. Every conference reminds me that our business is ultimately a people business. Deals happen because of trust. Opportunities emerge because of connections. Careers are built one relationship at a time. Forty-two years into this profession, I am more convinced of that than ever.
 
5. I’ll Learn Something New. One of the reasons I continue attending events like this is simple: there is always something to learn. Sometimes it’s a new market trend. Sometimes it’s a fresh approach to solving a client’s problem. Occasionally, it’s a conversation in a hallway that sparks an entirely different way of thinking. The moment we believe we’ve learned everything is the moment we stop growing.
 
As I look out over Nashville and prepare for another Summit, I’m reminded that commercial real estate remains one of the most dynamic and fascinating industries imaginable. The buildings may change, the markets may shift, and the technology may advance, but the opportunity to learn, adapt, and serve clients remains as exciting today as it was when I started 42 years ago.
 
We’ll compare notes next week.

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.
 
 

Seeing Commercial Real Estate Through the Eyes of a Ten-Year-Old

We just spent a delightful week in Philadelphia and New York City with one of our grandsons.
 
You see, we made a promise to each of our six grandchildren: once they turn ten, we’ll take them anywhere in the United States they want to go. This year, two reached that milestone. One chose the Florida Keys so he could fish. The other wanted a completely different experience — a tour of two of America’s great cities.
 
We gladly complied.
 
You may be wondering what any of this has to do with commercial real estate. Bear with me. I’m getting there.
 
We flew to Philadelphia for three days and then boarded a train to New York City. What an experience! Once we arrived at Penn Station, we decided to walk to our hotel on 55th Street. Watching a ten-year-old, luggage in tow, encounter everything a big city throws at you was surprisingly similar to what many of our commercial real estate clients experience every day.
 
The noise. The crowds. The unfamiliar surroundings. The constant need to make decisions.
 
Which way do we go?
 
Should we cross here or wait?
 
Is this the right street?
 
How much farther?
 
What happens if we make a wrong turn?
 
As seasoned travelers, my wife and I were comfortable. We had a map. We understood the subway system. We knew where we were headed. Our grandson, however, was experiencing all of this for the first time.
 
Commercial real estate often feels exactly the same for business owners.
 
A company owner may know everything there is to know about manufacturing precision parts, distributing products, running a transportation company, or managing a successful service business. But when it comes time to lease a building, purchase a facility, negotiate a renewal, complete a sale, or evaluate expansion options, they’re suddenly in unfamiliar territory.
 
The stakes are high.
 
The terminology is different.
 
The process can seem overwhelming.
 
And one wrong turn can be expensive.
 
That’s where a good commercial real estate advisor comes in.
 
Our job isn’t simply to unlock doors and show buildings. It’s to serve as the guide. We help our clients navigate unfamiliar streets, avoid potential hazards, and arrive at the destination they’ve chosen.
 
Sometimes the value we provide is obvious. We identify a better building, negotiate a lower rent, or secure favorable terms. Other times the value is less visible. We help clients avoid costly mistakes they never knew were lurking around the corner.
 
Throughout our trip, our grandson asked dozens of questions.
 
“Why is that building so tall?”
 
“How do people know where to go?”
 
“Why are there so many people here?”
 
“What does that sign mean?”
 
I couldn’t help but think how similar those questions are to the ones I hear from business owners facing a commercial real estate decision.
 
“Why is the landlord asking for that?”
 
“What does this lease clause mean?”
 
“Should I lease or buy?”
 
“How much space do I really need?”
 
“What happens when the term expires?”
 
Questions are natural whenever you’re entering unfamiliar territory.
 
By the end of the week, our grandson was navigating subway stations, reading street signs, and moving through crowds like a seasoned traveler. He wasn’t an expert, but he was far more comfortable than when he arrived.
 
The same thing happens with clients. As they move through a transaction, confidence replaces uncertainty. Knowledge replaces confusion. The unfamiliar becomes familiar.
 
The trip reminded me that experience has tremendous value. What feels routine to us may be completely new to someone else. Whether it’s finding your way through Midtown Manhattan or negotiating a commercial lease, having a trusted guide can make all the difference.
 
And sometimes it takes seeing the world through the eyes of a ten-year-old to remember that.
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.
 
  

Tough Advice

One of the coolest things about doing the same thing for over four decades is that newer folks in the business often seek your advice. This week, the call came from someone who is certainly not a novice, but found himself in an uncomfortable situation.
 
He has a client who runs a successful manufacturing company and has for years. They own the building from which they operate their business and are generating significant cash flow from both the company and the real estate ownership.
 
The problem? The owner recently received an unsolicited offer from a private equity group to purchase the business. The number was substantial, life-changing by most standards. Along with the offer came a proposal to sell the real estate to an investor and lease it back to the company under a long-term agreement.
 
Sounds simple enough, right?
 
Not exactly.
 
The broker’s discomfort came from the fact that his client suddenly found himself standing at one of the biggest crossroads of his professional and personal life. Selling the business could create generational wealth. Keeping the business could preserve identity, purpose, and control. Selling the real estate might unlock additional capital, but it would also eliminate a hard asset that had quietly appreciated for decades.
 
In other words, this wasn’t simply a transaction. It was a life decision disguised as a deal.
 
That distinction matters.
 
One of the biggest mistakes advisors make is assuming every client is motivated solely by maximizing price. In reality, business owners often care just as much about employees, legacy, family dynamics, taxes, future income streams, and emotional attachment as they do the final number on the closing statement.
 
The younger broker asked me, “What should I tell him to do?”
 
My answer surprised him.
 
I said, “Your job is not to tell him what to do. Your job is to help him understand the consequences of each choice.”
 
That changes the conversation entirely.
 
When clients face major liquidity events, the advisor’s role becomes less about selling and more about guiding. That means assembling the right team; CPA, estate planner, business attorney, wealth advisor, and real estate expert, and helping the client slow down long enough to think clearly.
 
Too many decisions of this magnitude are made emotionally and justified financially afterward.
 
Sometimes the best outcome is selling everything and sailing into retirement. Sometimes it’s recapitalizing the business and keeping the real estate. Sometimes it’s selling the company but retaining ownership of the building as a passive income investment. And occasionally, after examining all the angles, the client decides to do absolutely nothing.
 
Doing nothing is still a decision.
 
I also reminded him that owners who have operated businesses for 30 or 40 years often underestimate how much of their identity is tied to the company. Monday morning looks very different after the deal closes. I’ve watched highly successful entrepreneurs struggle more with the loss of routine and purpose than with the economics of the transaction itself.
 
Real estate professionals who stay in this business long enough eventually realize we are not simply negotiating leases and sales. We are often helping people navigate transitions; growth, loss, succession, retirement, partnership disputes, family changes, and legacy planning.
 
The buildings are just the backdrop.
 
The experienced brokers understand this. The elite ones embrace it.
 
And perhaps that is one of the greatest privileges of longevity in our business. Over time, clients stop calling you merely because you can complete a transaction. They call because they trust your judgment when the stakes are high and the decisions become personal.
 
That trust is earned one conversation at a time.

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.

When to go principal to principal

One of the primary responsibilities of a commercial real estate practitioner is to serve as the “go-between” for two parties. In many respects, our job is to keep our clients separated from one another until the appropriate time. That statement may sound unusual to someone outside the business, but experienced brokers understand exactly what I mean.
 
Certainly, there are many reasons for this.
 
Commercial real estate transactions are emotional. Owners become attached to their properties. Buyers become excited about opportunities. Tenants become frustrated with rising occupancy costs. Landlords sometimes take resistance personally. Human nature has a way of entering negotiations, and when emotions become involved too early in the process, the transaction can quickly move away from facts, economics, and problem solving.
 
Part of our responsibility as brokers is to absorb some of that emotion and interpret information in a way that keeps negotiations productive. Often, we are translating more than negotiating. We take a strongly worded position from one side and communicate it constructively to the other. We soften rough edges, clarify intent, eliminate misunderstandings, and preserve momentum.
 
That role is far more important than many people realize.
 
I have seen transactions collapse over comments that had nothing to do with price, timing, or terms. A poorly timed meeting between principals can create tension where none previously existed. Personalities sometimes clash. Casual remarks become perceived commitments. Negotiating positions harden. Egos become involved. Before long, the focus shifts from solving a problem to winning an argument.
 
Ironically, some of the best meetings between principals occur after the difficult issues have already been addressed.
 
Once the major business points have been substantially negotiated, the nature of the conversation changes. The parties are no longer sitting across the table as opponents trying to extract concessions from one another. Instead, they begin discussing how to make the transaction successful. Conversations become collaborative rather than adversarial. At that point, a face-to-face meeting can strengthen trust, create alignment, and reinforce the relationship moving forward.
 
So when is the best time to get principals together?
 
In my experience, the timing is right when expectations have been properly framed, emotions have settled, the parties have demonstrated seriousness, and there is more to gain from collaboration than from posturing. Experienced brokers understand this instinctively. They recognize that controlling a transaction often means controlling the process, and part of controlling the process involves understanding when direct communication between principals helps the transaction and when it hurts it.
 
This is why seasoned practitioners are often reluctant to arrange a meeting or conference call too early. It is not because they are trying to keep parties apart unnecessarily. It is because they understand that premature interaction can sometimes create obstacles that did not previously exist.
 
The right meeting at the wrong time can easily become the wrong meeting.
 
And one of the subtle skills developed over years in this business is knowing exactly when the timing is right.

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.
 
 

Industrial Market

The industrial market in Orange County hit pause in mid-2022. Just like that. A once-robust market filled with constant activity suddenly fell silent. Buildings that would have generated multiple tours and competing offers within days began sitting for weeks, then months.
 
Yes, we’re beginning to see signs of life again. Several notable manufacturing companies are actively touring and leasing space. Phones are ringing a bit more frequently. Brokers are cautiously optimistic. But overall, the velocity remains tepid compared to the frenzied pace we experienced only a few years ago.
 
For owners of industrial real estate, that slowdown carries a significant cost.
 
Most owners understand the obvious expenses associated with vacancy. If you own your building free and clear, your carrying costs may be limited to property taxes, insurance, utilities, landscaping, security, and maintenance. If there is debt on the property, the monthly burden rises quickly as mortgage payments continue regardless of whether the building is occupied.
 
But the most overlooked expense is often the largest: opportunity cost.
 
Every month a building sits vacant is a month of rent that can never be recovered. Unlike many businesses where lost revenue can potentially be made up later, industrial real estate doesn’t work that way. A missed month of occupancy is permanently lost income.
 
Consider a 25,000-square-foot industrial building leasing for approximately $1.50 per square foot. One month of vacancy represents nearly $38,000 in lost gross revenue. Six months? More than $225,000 gone forever — before considering tenant improvements, commissions, free rent, and carrying costs.
 
And therein lies the challenge many owners face today.
 
Landlords remain anchored to yesterday’s market while tenants have become increasingly selective and deliberate. The result is a widening gap between expectation and reality. Owners resist lowering asking rents or offering concessions because they fear “leaving money on the table.” Yet in many cases, the larger financial mistake is waiting too long to respond to market conditions.
 
Pricing a vacancy correctly at the beginning of a marketing cycle is almost always less expensive than chasing the market downward six months later.
 
I’ve also noticed another emerging trend. Tenants today are spending far more time evaluating decisions. During the post-pandemic industrial surge, occupants often toured a building on Monday and submitted an offer by Friday. Today, the process resembles a chess match rather than a sprint. Companies are carefully analyzing labor costs, tariffs, supply chains, interest rates, inventory levels, and broader economic uncertainty before committing.
 
That caution impacts landlords directly.
 
The cost to originate a tenant has risen dramatically. Leasing commissions, tenant improvement allowances, free rent periods, legal negotiations, architectural reviews, and extended downtime all contribute to the equation. In many cases, replacing a tenant today can cost hundreds of thousands of dollars before the first rent check arrives.
 
Which is why tenant retention has become more important than ever.
 
Sometimes the best deal isn’t pushing aggressively for every possible rent increase. Sometimes it means working collaboratively with an existing tenant to preserve occupancy, maintain cash flow, and avoid the substantial frictional costs associated with vacancy.
 
A vacant building creates stress. An occupied building creates options.
 
The industrial market will eventually regain stronger momentum. Southern California remains one of the most supply-constrained and economically dynamic industrial markets in the world. Manufacturing, logistics, and distribution demand will continue to evolve. But in the meantime, owners would be wise to carefully calculate not only the visible cost of vacancy, but also the invisible one.
 
Because waiting can become very expensive. 

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.
 
 

Industrial Outdoor Storage

Today, I’d like to talk about a segment of industrial real estate you’ve probably never heard of, much less considered. It’s called IOS.
 
No, not the operating system that powers your Apple devices. In this case, IOS stands for Industrial Outdoor Storage. And until a few years ago, almost no one was talking about it.
 
Then COVID hit.
 
Suddenly, IOS went from an afterthought to one of the most sought after property types in commercial real estate. Today, it is not just a niche. It is its own asset class, and demand is exploding.
 
Why?
 
Because IOS sits right at the intersection of three powerful forces.
 
First, the supply chain broke and companies needed space fast. Not warehouse space. Yard space. Places to store trailers, containers, equipment, and overflow inventory when buildings were full and ports were backed up.
 
Second, service based businesses never stopped growing. Plumbers, electricians, HVAC contractors, landscapers, equipment rental companies, and construction yards all need a place to park trucks, store materials, and operate close to their customers. In infill markets like Orange County, that means outdoor space is essential.
 
Third, and this is the big one, you cannot create more of it.
 
Orange County is built out. Zoning is tight. Cities do not love outdoor storage. And many existing IOS sites are legally nonconforming, which means they are effectively irreplaceable.
 
So what happens when demand surges and supply is fixed or even shrinking?
 
Prices go up. Competition intensifies. And a once overlooked property type becomes a hot commodity.
 
That is exactly what we are seeing today.
 
Industrial Outdoor Storage may not be glamorous. It is not shiny, it is not new, and it will not win any architectural awards.
 
But it is functional. It is necessary. And increasingly, it is valuable.
 
And here is the part that should get your attention. If you own a piece of industrial land with yard space, even if it looks rough around the edges, you may be sitting on one of the most in demand and underappreciated assets in today’s market.
 
Tenants are not looking for perfection. They are looking for usability. They need space that works. Space that is secure, accessible, and close to their customer base.
 
That shift in mindset is important.
 
Because in a market like Orange County, where land is scarce and regulation is tight, the highest and best use is not always the newest building or the most polished project. Sometimes, it is simply well located dirt that solves a real operational problem.
 
IOS is no longer the leftover. It is no longer the forgotten corner of industrial real estate.
 
It is now a critical piece of the supply chain and a growing opportunity for those who understand its value  

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.