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.
 
 

Where Has All the Urgency Gone?

Urgency is a funny thing.

In some markets, it shows up whether you are ready or not. Decisions get made quickly, options disappear, and hesitation has a cost. In today’s industrial real estate market, however, urgency has become surprisingly rare.

You might be wondering why.

Let’s start with the occupant.

If you are a business owner looking for space, the process usually begins with a clear need. You engage a commercial real estate professional, define what you are looking for, and tour a few buildings. Inevitably, a couple rise to the top. One might check most of the boxes, maybe even all of them.

But then time passes.

You circle back for a second look and something interesting happens. The buildings you liked are still available. Not only that, but a few new options have entered the market. The list has grown, not shrunk.

At that moment, a very logical thought enters your mind. The market is moving in your direction.

And if that is the case, why rush?

Why commit today if waiting might produce a better deal, more concessions, or an option that fits even better? So you slow down. You take another look. Then another. And without really noticing it, the urgency that once existed at the beginning of your search quietly fades away.

Now let’s look at the owner.

From the ownership side, the experience feels very different, but it leads to the same result. The activity you are seeing is likely below what you expected. The inquiries may be fewer. The proposals that do come in might not hit the rental rate you had in mind. The use might not be ideal. The credit might not feel as strong as you would like.

So you wait.

You tell yourself that the market will improve, that stronger tenants will surface, that rates will return to where they were not that long ago. It feels reasonable. It feels patient. It even feels disciplined.

But in that decision to wait, something else disappears.

Urgency.

What we are left with is a market where both sides believe time is working in their favor. Tenants feel no pressure because options remain. Owners feel no pressure because expectations remain. And when both sides are comfortable, deals tend to slow.

It is not that demand has vanished. It is not that supply is overwhelming. It is that the natural tension that drives decisions has softened.

Here is the part that often gets missed.

Markets rarely announce when the opportunity is at its best. They do not send a signal that says now is the moment. Instead, they shift gradually, almost quietly.

The tenant who waits for the perfect situation can find that the best buildings are leased while they are still evaluating. The owner who holds out for yesterday’s pricing can discover that extended vacancy carries a cost that is far greater than a small concession would have been.

In both cases, the absence of urgency creates a different kind of risk. It is not obvious. It does not feel immediate. But it is there.

So what is the answer?

If you are an occupant, recognize that having more choices does not mean you have unlimited time. The market may be giving you leverage, but that leverage only has value if you use it.

If you are an owner, understand that patience only works when it is aligned with reality. Waiting is a strategy, but only if the market is actually moving in your direction.

Urgency does not mean panic. It does not mean forcing a decision that is not there.

It means clarity.

It means recognizing value when it presents itself and having the confidence to act.

Because while urgency may be harder to find in today’s market, opportunity is still there for those willing to move when it makes sense.

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.

 

 

4-20

I’m penning this column on April 20. According to PBS, this day is widely recognized as an international counterculture holiday for cannabis culture, marked by celebrations, consumption, and advocacy for marijuana legalization. Originating in the 1970s with a California high school group known as the Waldos, the term and date became a popular code for meeting to smoke cannabis.
 
So what, you may be wondering? Has the day clouded his judgment?
 
Indulge me while I share a story about cannabis and my one and only experience with its use in an industrial building.
 
Let me take you back to a time when medicinal cannabis was legal in the state of California. Recreational cannabis, however, had yet to be approved through a ballot initiative.
 
We had connected with a family owned and family operated diesel mechanic who had run his business for decades out of a shop in Los Angeles. When we presented our broker opinion of value for what we believed the property was worth, he countered with a significantly higher number. My associate Joshua and I took a flyer and decided to market the building at somewhat less than his expectation, but meaningfully more than our estimate.
 
We prepared our marketing collateral and published the availability on several multiple listing services, including AIR, LoopNet, and CoStar, and commenced our marketing efforts.
 
Over the weekend after the property hit the market, we received no less than 20 phone calls with urgent requests to see the building first thing Monday morning. We could not believe the activity. When we questioned these prospective occupants about their intended use, every single one of them cited diesel repair, auto body, towing, or other compatible industrial uses.
 
We scheduled tours beginning at 8:00 a.m. on Monday morning, running through noon. About five in total.
 
It did not take long to realize that none of these operators were actually in the automotive industry. Instead, they were in the medicinal cannabis business. The building, as it turned out, was located in a zoning pocket that was slated to allow recreational cannabis in the near future.
 
We chose what we believed to be the most credible group and were completely transparent with our owner about the proposed use, the expectations, and the likelihood of closing.
 
I would like to tell you that everything went smoothly, but that would not be accurate. The transaction included more than its share of twists and turns. We had to reinstate the owner’s limited liability company, which had been inactive for over 30 years. There were back taxes and registration fees that needed to be addressed. Financing was delayed. Timelines slipped.
 
But in the end, we closed the transaction on April 20, 2016. A fitting and somewhat ironic conclusion to a deal that began with a bit of skepticism and ended with a lesson in market awareness, adaptability, and the importance of reading between the lines.

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.
 
 

Florida

Last week was quite special. You might have noticed my absence from these pages. That wasn’t what made it special, by the way. My wife and I spent an amazing week with our oldest grandson fishing in the Florida Keys. We told all six of our grandchildren that once they turned ten years old, we would take them anywhere in the United States they wanted to travel. Our oldest chose Florida.
 
Watching him spend countless hours on the pier at our hotel fishing - baiting, casting, playing the line, reeling, rinsing and repeating, I was reminded of a saying: “every expert is a beginner who didn’t quit.” Witnessing his tenacity, I drew a parallel with those who succeed in commercial real estate.
 Stay with me, please, as I expand this idea.
 
At first glance, fishing and brokerage seem worlds apart. One involves patience and time on the water, the other conversations, negotiations, and problem solving. Yet at their core, both demand consistency and a willingness to keep going when results are not immediate.
 
Our grandson did not catch a fish every time he cast his line. In fact, most of his efforts produced no result at all. Still, he stayed with it. He adjusted his approach, asked questions, and paid attention to what worked and what did not. Over time, he improved, not because of a sudden breakthrough, but because he refused to stop.
 
That same principle applies directly to commercial real estate. Success in our business rarely comes from a single moment of brilliance. It comes from steady, repeated effort. Calls that are not returned, meetings that do not convert, proposals that do not result in a transaction are all part of the process. Those who succeed understand that consistency, not intensity, is what produces results over time.
 
There were moments when the conditions were not ideal and it would have been easy for him to walk away. Instead, he leaned in, remained curious, and stayed engaged. Eventually, his persistence paid off. Not through luck, but through effort sustained long enough to create opportunity.
 
In our business, there is often a temptation to search for shortcuts or quick wins. In reality, progress is built through a disciplined approach and a commitment to the process. Each step matters, and each action builds upon the last.
 
As I watched our grandson at the end of each day, tired but satisfied, I was reminded that growth rarely happens all at once. It happens gradually, through repetition, patience, and a willingness to keep going.
 
The lesson is simple. You do not need to succeed every time. You simply need to stay with it long enough, remain consistent in your effort, and trust that the results will follow.

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.
 
 

Will AI Replace Commercial Real Estate Brokers? A Thought Experiment Through SEQUENCE

Lately, I have been doing something I do not often allow myself to do. I have been wondering if I am becoming obsolete.

Not because the phone has stopped ringing or because deals have dried up. Quite the opposite. But artificial intelligence has arrived with such speed and capability that it forces an uncomfortable question.

What happens if a machine can do what I do?

Last year, I wrote a book titled The SEQUENCE, a framework that outlines the lifecycle of a commercial real estate transaction. Source. Evaluate. Qualify. Under Control. Execute. Negotiate and Close. Expand.

Every deal follows this cadence. Every broker, whether they realize it or not, is executing some version of this sequence daily.

So I began to ask myself what it would look like if AI replaced each step.
Let’s walk through it.

Source
AI already knows who owns what, when their loan matures, what they paid, what their tenant roster looks like, and whether they are likely to sell. It can scrape, sort, and predict motivation faster than any human prospecting effort.

The days of pounding the phones may give way to prompting the machine.

Evaluate
Need a comp analysis. Done in seconds. Need a lease versus own model. Instant. AI can analyze market trends, demographic shifts, and financial scenarios with precision and speed no human can match.
What used to take hours, sometimes days, can now be done almost instantly.

Qualify
Here is where it gets interesting. AI can ask questions. It can even ask good questions. It can analyze responses, detect patterns, and score the likelihood of a deal closing.

But can it read hesitation. Can it sense when a client says one thing but means another.

That remains to be seen.

Under Control
Proposals, presentations, and follow-ups can be automated. Perfectly formatted. Delivered instantly. AI does not forget to send the email. It does not get nervous in a meeting. It does not miss a detail.

But it also does not build trust over lunch. It does not shake a hand. It does not look someone in the eye and say, I have got this.

Execute
Transaction management is already being streamlined by technology. AI can coordinate timelines, track documents, and ensure deadlines are met without error.

No dropped balls. No missed signatures.

Negotiate and Close
Now we enter the gray area.

AI can model outcomes. It can suggest optimal terms. It can even simulate negotiation scenarios.
But negotiation is not just math. It is emotion. It is timing. It is knowing when to push and when to pause.

It is reading the silence on the other end of the phone.

That is harder to replicate.

Expand
AI can absolutely help here. Marketing the deal. Broadcasting success. Identifying the next opportunity before the ink is dry.

In fact, this may be where AI becomes a broker’s greatest ally rather than its replacement.
So where does that leave us.

If I am being honest, parts of what we do are already being replaced. The administrative. The analytical. The repetitive.

And that is not necessarily a bad thing.

Because what remains, the part that is hardest to automate, is the part that matters most.

Judgment. Trust. Relationships. Experience.

A machine can process data. It cannot sit across from a business owner who has built something over 30 years and understand what that building truly means to them.

At least not yet.

So no, I do not believe brokers are going away.

But I do believe the brokers who ignore AI might.

The future is not a world without brokers. It is a world where the best brokers use AI to eliminate the noise and focus on what only humans can do.

The SEQUENCE does not disappear.

It evolves.

And maybe the brokers who embrace that evolution will find themselves more valuable than ever.

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. 

What Makes a Great Tour?

Showing buildings, suites, or retail storefronts is an important part of our job as commercial real estate professionals. We refer to this simply as “touring.”
 
As I write this, I have a client in town. Later today, we’ll spend time walking several locations that could house their expanding business. What they’ll see in a few hours is the result of several days of preparation.
 
Which got me thinking, what actually makes a great tour?
 
In my experience, it’s not just unlocking doors and walking through space. A great tour is a curated experience. It’s intentional. And when done well, it moves a client meaningfully closer to a decision.
 
Here are the key elements.
 
Preparation. A great tour starts long before you arrive at the first property.

Preparation means understanding your client’s business, their operational needs, and their financial guardrails. It also means confirming availability, access, and timing for each stop.
 
Nothing erodes confidence faster than fumbling for lockboxes, waiting on unresponsive listing agents, or showing a space that clearly doesn’t fit. Preparation eliminates friction. It shows professionalism. And it tells your client, “I value your time.”
 
Previewing. Whenever possible, preview the spaces.

Photos lie. Marketing packages exaggerate. And sometimes what looks perfect online simply doesn’t translate in person.
 
By previewing, you can eliminate the obvious “no’s” before your client ever sees them. More importantly, you can walk into each tour stop with context, highlighting strengths, addressing weaknesses, and controlling the narrative.
 
You don’t want to be discovering the property at the same time as your client.
 
Collateral. Bring the right information.

A clean tour book or digital package with property summaries, site plans, and key metrics goes a long way. Your client shouldn’t have to rely on memory after seeing five or six buildings.
 
Good collateral allows you to compare options in real time. It also reinforces your role as an advisor, not just a door opener.
 
Showing Order. Sequence matters more than most brokers realize.

Start with a strong, relevant option, but not necessarily the best one. Build momentum. Let the client calibrate. Save one of the top contenders for later in the tour when their perspective is sharper.
 
Ending strong is critical. The last property seen often becomes the benchmark against which all others are measured.
 
Financial Modeling. Real estate decisions are financial decisions.

As you walk each property, translate what your client is seeing into dollars. What does this option mean monthly? Over the term? What are the hidden costs such as improvements, operating expenses, and relocation?
 
When you can connect the physical space to the financial impact in real time, you elevate the conversation. You move from “Do I like this building?” to “Does this make sense for my business?”
 
Follow Up. The tour doesn’t end when you get back in the car.

A timely follow-up, same day or next morning, is essential. Summarize the properties, gather feedback, and begin narrowing the field.
 
This is where decisions start to take shape. Strike while the impressions are fresh.
 
Final Thought. A great tour is never accidental.

It’s the result of preparation, intentional sequencing, thoughtful communication, and financial clarity. When done right, it creates confidence, for your client and for you.
 
And confidence is what ultimately leads to action.

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.

OKC CRE Lessons

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.

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.
 
 

How Oil Prices Affect CRE

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.

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.
 
 

Why Brokers Don’t Get the Listing

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.

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.