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So
what’s any of this to do with commercial real estate? Indulge me while I
recount a few similarities.
It’s a LONG season. Commencing in early April or late
March - the big league regular season spans six months and 162 games. If a team
advances to the playoffs - tack on another thirty days and potentially twenty
more games. Consumed is the end of winter, all of spring and summer, and part
of fall. It’s common for a commercial real estate sale to languish as well.
Several of my deals this year originated with a contact over ten years ago. No
need yet - but a commitment to keep in touch. Plus, once a requirement is identified
- plan on another few months to execute. Literally - babies are born and learn
to walk quicker than the gestation of some transactions.
Hours of mundanity are sprinkled with moments of ecstasy. Baseball
games can be akin to a large dose of Sominex! Wake me up when something
happens. Runner on base - no outs? Just how many times is the pitcher going to
look him back? Endless foul balls, throws to first, and strikeouts cause even
the most die-hard fan to yawn. But just when you least expect it - Howie Kendrick
goes yard and folks - we have a game. You can be cruising along with a
commercial real estate deal and WHAM! Problem! I’ll never forget this time of
year in 2008. We were rolling toward our best year ever when the financial
world ended. Values plummeted in a matter of days, lenders froze, and a
cacophony of commercial real estate carnage convened. However, few things are
sweeter than a closing. If touching ‘em all is similar - put me in coach! I’m
ready to play.
Fundamentals are critical. “Amateurs practice until they
get it right. Professionals practice until they can’t get it wrong.” Never, was
this saying - credited to George W. Loomis - more prescient. Big league pros in
both baseball and CRE rehearse ad nauseam.
Plays at the plate are common. Few plays in
the bigs are more exciting than a call at the plate! With a runner rounding
third, barreling toward home and the right fielder firing in the rock - all
manner of chaos ensues. Vision is blurred and time stands still as “blue”
considers the outcome. Safe! Or Out! Verdict delivered. No appeal - well not
always - will be rendered. Just last week we had a sale approaching the closing
table. Buyer, seller, and lender were poised. Ooops. Title glitch. Is our deal
going to be safe or out? Fortunately, we had a friendly umpire - who saw things
our way. Deal done.
It ain’t over til it’s OVER. A moment in
the 2002 series - Angels v Giants - occurred in game six. The game was a must
win for the Halos as they were down three games to two and facing elimination.
Late, with a five run lead, Dusty Baker - manager of the Giants and former
Dodger player - lifted his starter in favor of his closer. Problem was - he
gave the game ball to the starter as if to say - congrats! Break out the
bubbly. Hmmm. That inning - an inspired Angel squad propelled by the Rally
Monkey and legions of Spirit Sticks - forged a miraculous comeback and we were
headed to a game seven! Yep - wasn’t quite over. Too many in our trade place
sales in the “win” column before they actually close. A mentor of mine told me
long ago - “ the deal isn’t done until the broker gets paid!” Contrary to
Dusty’s premature celebration - keep the champagne on ice until closing is
confirmed.
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.com.
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