Friday, March 20, 2020

What Blackjack and Commercial Real Estate Have in Common - 5 Things

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I love to play blackjack I should say, I love winning. The losing, not so much. That is why I don't gamble anymore - the losing! Regardless of my mathematical methods of manipulating my money, the result was too often predictable - the house ended up with my hard earned wages.

Painfully reminded of my aversion to losing was I on a recent weekend. We traveled to Las Vegas for "Mike Madness" - a term we coined (like that?) for the celebration of our middle son's birthday. Countless hands of blackjack were played and lost by my wife and daughter. Fortunately, they are small time gamblers - twenty bucks is a huge loss - so we had gas money for the trip home and the equity in our home is untapped.

So just what did playing blackjack teach me about commercial real estate? Allow me to deal you a few hands and we will see.

You gotta stack the odds in your favor. When I played, I would search far and wide for a single deck table. Rarely would I sit down with a shoe wielding dealer (multiple decks for those of you who prefer to visit Florida). The reason is simple. The odds are better for you with fewer cards. Working with control is a way to tilt the odds in your favor in a commercial real estate transaction. There is still no guarantee, but at least if a deal is made, you are involved.

Don't play if your stake is too small. You have to be willing to watch your pile of chips dwindle as the deck turns in your favor. Generally, things will rebound if you're adequately staked. Too many newbies (and vets for that matter) enter the commercial real estate game with improper staying power. If you can't withstand a dry spell, you're forced to work on deals that are quicker and smaller or worse - you compromise your ethics to close a sale.

Play the percentages. Always split aces and eights or double down with an eleven if the dealer is showing six or fewer. You can occasionally hit a twelve if the dealer is showing seven or better - but I prefer to stand pat. Work on high percentage commercial real estate deals - not the airport runway that is purportedly for sale that you eavesdropped at your kid's baseball game.

Avoid playing with amateurs. How incredibly mad are you when the last guy to the dealer's right hits with a two up and the dealer showing four? Invariably, the guy busts with a ten rather that let the table benefit from the dealer exceeding twenty one. Too often, in the world of commercial buildings, we are on opposite ends of a broker who isn't a pro - and the deal suffers.

Cut your losses. Sometimes, in blackjack and commercial real estate - you just gotta move on to the next transaction. I'm guessing if your client is ducking your calls, you shouldn't spend the fee.

Just remember, that squeal of delight that you hear when the blackjack dealer busts or your colleague closes a nice deal probably started with the above points in mind.

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at or 714.564.7104. His website is

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