Three Pillars of Success in Commercial Real Estate

I was honored recently to be a podcast guest. Because of my tenure in the business and presence initiatives - I’m sought frequently. I guess they figure - after thirty eight years - I might have something to say to their audiences. My latest interview was at the behest of my professional coaching organization - the Massimo Group. If you’d like to listen - you may do so by clicking here. https://open.spotify.com/episode/2OHyYnWAG7imnyaMHGT5df?si=iy8zBft6QaCOFVnb4j_6ww. The founder and CEO, Rod Santomassimo, and I spent some time together discussing commercial real estate and my pillars of success. I believed them to be column worthy.
 
But before I delve in to the triplets - allow me to expand upon a question Rod asked at the outset: describe yourself in high school. In a word - a nerd. Too skinny and small for football, too slow for track, and afraid of a baseball - suffice it to say, I wouldn’t have been a Steve Fryer feature. But, I discovered golf. Sure. Golf is cool now - thanks to Tiger, Phil, DJ, and Rory. But in the seventies, only visored bespectacled misfits hit the links - with Arnie being the exception. But golf created a self reliance that no team sports can do. This prepared me well for a career brokering industrial buildings. My parents divorced during my high school years. Being the oldest of three siblings - I often found myself in the role of intermediary. Once again, good prep for advising owners and occupants of commercial real estate. So a self reliant intermediary I became.
 
Allowed during the interview was my list of three pillars of success.
 
Become client centric. By this, I mean your client’s best interest is more important than your fee - period. So many new agents suffer from commission breath. The fee takes priority over all else. After all, we’re commissioned sales people whose livelihood depends upon transacting. But, if at the expense of your client - your longevity will be short. Early in my career, I counseled many against purchasing when I believed they’d be better off leasing. I should mention, the fee for selling is greater than leasing. You see, buying requires a certain set of criteria - years in business, abundant operating capital, stable growth trajectory, and an ownership structure that can benefit from owning the building in which your business operates.
 
Cooperating agents are a great source of new business. Many view an agent within their firm or another as competitors. They certainly can be. But, I’ve found they can also be a great source of referrals. I’ve found if agents in your market know your skill set and expertise cooperation can exist. I attempt to be uber transparent - without compromising my clients position - with my fellow agents. This transparency has served me well over the years.
 
Do what you say, when you say. With clients, with agents, with friends and family - just do it! One of my keys is to only commit when I know I can and then don’t let anything - short of a frontal lobotomy - cause you to break your promise. This is such a simple concept - but not an easy one.
 
So, there you have it!
 
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

Making a Commercial Real Estate Decision Requires FOCUS!

As a frequent reader of this column, you know how much I like acronyms! You may have seen my missives on NUCLEAR, ask MR BOB, and even one from my friend and neighbor, Rudy - CLIP. Acronyms and their sister, nemonic devices, got me through school - somewhat unscathed - as they train your mind to remember lists and/or a process. Today. Yep! Another one. Proper attribution must be given to my business coach, Rod Santomassimo of the Massimo Group for this sequence. If you’d like to learn more - he’s written a great book entitled Knowing Isn’t Doing - Don’t Kid Yourself. If you’re facing a commercial real estate decision - specifically a relocation - I’d suggest you run down the list and ask yourself a few questions. In other words FOCUS!

F. Facts. Your current location as an owner or an occupant of commercial real estate contains a set of knowns - facts. You been at your location for a period of time. You lease. You own, etc. Layer in such things as the expiration of your rental agreement or a loan maturity. Consider the drivers of your business and how those may have changed. Was a competitor acquired? Did you add employees or machinery since you moved in? By the way. At this point - you may already have a direction. Humor me. Work yourself through the balance of the exercise. Sometimes - results may vary. 

O. Opportunity. Let’s now carefully delve into what’s working with the building and importantly, what’s not. Examples of what’s working could be - your customers know where you are, freeway frontage provides free advertising, or the lease rate you negotiated is 20% below the market rates. However, if the spot causes your employees to park down the street or if your warehouse must be completely unloaded and reloaded so folks can work - those are problems. You may also want to give some reflection to the motivators when you leased or bought the real estate. Was the market on fire and you took what you could get with the promise of re-evaluation? 

C. Consequence. Simply. You’ll need to do some math here. Consider what happens if you do nothing vs something - in dollars and cents. We recently counseled a logistics company. Considered was converting a leased premise to an owned one with a lot more space. Clearly, the new digs were going to cost a great deal more. However, the downside of staying put and continuing to lease would cripple their ability to grow their business. The loss of revenue - by standing pat - was enormous. 

U. Understanding. Now you know your situation, have dived into what’s working or not, and have calculated the monetary impact of your options. All that remains is a road map. Proceed to the next step. 

S. Solution. As the solution is column worthy itself - you’ll have to tune in next week for some suggestions. 

So, please don’t lose FOCUS this week until we meet again. 

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.