Niches and Strategies for the New Normal

Transaction volume for 2011 is way ahead of that in the preceding two years and could reach $200 billion this year, according to Real Capital Analytics. Yet deals are still few and far between for many commercial real estate practitioners.

The experience of Todd Clarke, CCIM, president of NM Apartment Advisors in Albuquerque, New Mexico, is typical. “Historically, half of my business came from transactions and the remainder from consulting,” he says.

But after Clarke advised his clients not to sell into the weakening 2008 market, “I went 60 days without a transaction for the first time in 22 years.” Eventually, that drought stretched to as long as 15 months. “I asked myself: ‘What will I do to make money?’” he says.

Do More of What You Already Do

Clarke found the answer in a sideline he’d long offered to current clients – property tax protests. Clarke began mailings to property owners, did media interviews on the topic, and taught seminars on how to file appeals. About 25 percent of seminar attendees did the appeal themselves; the rest hired Clarke. His success with appeals, along with his consulting work for apartment owners and land developers in the area, made “2010 my best year ever,” he says.

Clarke’s business growth is a combination of the right skills (He wins 97 percent of his cases) and an existing market demand. “We hit on something that was timely for owners,” he says, “how to cut costs and survive the downturn.” He also found that there was less competition in the appeals niche than in commercial brokerage, especially among the mid-sized and smaller owners he targeted. He plans to continue to promote his tax appeal services even after the market improves.

Greg Schenk, SIOR, CRE, president of the Schenk Company in Columbus, Ohio, also found the need to refocus more of his business on something he did already – lease renewal and restructuring. “Leasing used to be about half of my business, now it’s 80 percent,” he says.

But rather than just emphasize one renegotiation, Schenk says he’s doing much more on the consulting end, working with tenants to develop a strategic plan for their long-term space needs. “People are tired of being sold, but more than ever they need and want your expertise to make real estate decisions,” he says. His key to making consulting work: assembling the right team, comprising of a banker, attorney, accountant, and contractor to address all aspects of a real estate decision.

Andrew Zezas, SIOR, president of Real Estate Strategies Corp. in Somerset, New Jersey, also sees companies’ desire for consultation, not just lease negotiation. In fact, “we see ourselves as corporate advisors, not tenant reps,” says Zezas. The difference, he says, is that as an advisor, “the product is not necessarily a property or even a transaction. Rather, it’s the best alternative for the client – whether that’s a lease, sale, or staying put.” The shift also means that Zezas, like all the NAR commercial members we spoke with, prices his consulting on a fee basis.

 Recognizing that clients need more help determining value when markets are shifting, Robert Nahigian, SIOR, CRE, FRICS, principal of Auburndale Realty Company in Newton, Massachusetts, enrolled in appraisal courses. He’s not planning to practice as an appraiser, but finds that the knowledge gives him extra credibility in his expert witness and client consulting work.

He’s also shifted the client base for his land development skills from developers to corporations considering build-to suits. “Downturns are a perfect time to execute land development and permitting, because with fewer people seeking permits the process usually goes faster,” he says.

Go Where the Business Is

Focusing in on companies and property types that are expanding even in a weak market is another way to keep transactions flowing. This approach has helped Andre van Rensburg, CCIM, ALC, CIPS, president of Prudential Commercial Real Estate North East Florida in Jacksonville. For example, he says that with fewer people buying cars, auto parts retailers like AutoZone have benefited from the downturn, because more consumers are repairing the cars they already own.

Multifamily, single-tenant, triple-net retail, and Class-A properties in primary cities have all seen cap rate compression in the last year. Another tip: Look for property types where you’re able to obtain financing, like Fannie Mae and Freddie Mac for apartments, and Small Business Administration loans for owner-occupied properties.

You also need to educate investors about “the great opportunities commercial real estate offers,” van Rensburg says. For example, investors need to watch for an increase in occupancy, even when there’s a continued decline in rental rates. It’s an earlier indicator of recovery in a specific property type, he says.

A variation on the theme of finding the business is taking steps so that the business will find you. For Paul Waters, CCIM, SIOR, CRE, FRICS, executive managing director, Brokerage at the Americas for NAI Global, headquartered in New York City, that means using social media to “build the brand and the service line.”

With the help of a dedicated in-house individual, the company has developed property-specific blogs that focus on niches such as supply-chain logistics and warehouse space. While Waters says he can’t attribute any transactions specifically to the blogs, “we’ve been told by clients that they’ve included us in the bidding process because of our use of technology,” he says.

Offer Something Different

The ability to set yourself apart from competitors is always a key to attracting business, but the need for differentiation is even more critical when times are tough. For Clarke, the market analysis skills acquired through the CCIM Institute’s Advanced Market Analysis for Commercial Real Estate course were a key to the success of his consulting business, Cantera Consultants & Advisors.

“Very few people do market analysis because it takes a fair amount of time and not every client will pay the money for it,” he says. His best clients: developers and city governments trying to reinvigorate neighborhoods.

But getting consulting clients can be difficult until you have a track record, he says. “Most people try to broaden their services in a tough market. We’re contrarian, so we decided to narrow ours,” says Zezas. The “intense focus” enables him to understand the concerns and challenges of the executives at the mid-sized New Jersey-based companies he targets more fully.

To connect with his prospects, Zezas speaks frequently at corporate association events, and he even spent approximately $25,000 to build a video studio in his office, where he conducts monthly interviews with local executives in his niche. The payoff: Revenues in 2010 were the highest in the company’s nine-year history.

While several brokers we spoke with have found distressed property disposition more a source of frustration than business, Waters says that NAI has built a successful niche handling troubled assets.

Called the Strategic Asset Service Group and comprised primarily of brokers who handled troubled assets during the 1990s downturn, they found success by “getting in front of banks and stating our value,” he says. Troubled asset work now accounts for between 8 and 10 percent of the company’s business; Waters expects the proportion to reach up to 20 percent in the next few years.

Prime the Pump for Recovery

While commercial real estate is still far from booming, “I’d rather be here today than last year,” says van Rensburg. “And I’d rather be here next year than today.” Until then, Signature Series interviewees agree on what it takes to succeed today: Pick a niche that fits your skills and reflects a market need, and leverage your education to become the expert in that market. Then, use both technology and networking to let clients know what you have to offer.

How to find your niche

A good first step in finding a new and profitable commercial real estate niche is to perform a SWOT analysis. This matrix helps you identify your Strengths and Weaknesses as well as the Opportunities and Threats in your market. Here’s a sample to help you get started.


  • What do you do better than other commercial practitioners in your area?
  • What unique resources and contacts do you have?
  • What do others see as your strengths?


  • What could you do to improve your business skills or performance?
  • Where do you have fewer resources than competitors?
  • What are clients likely to see as a weakness?


  • What opportunities exist in your market?
  • What trends indicate opportunities in the near future?
  • What tasks are not being performed, or performed well, by your competitors?
  • What are clients requesting that no one provides?


  • What possible changes could hurt your current business or future opportunities?
  • What changes could competitors make that would harm you?
  • What threats do your weaknesses expose you to?

For more on SWOT and exploring the consulting services niche, watch the free webinar “How CCIMs Can Generate Revenue Providing Consulting Services,” presented by Todd Clarke, CCIM at: His SWOT analysis also includes tools to help you identify ways to add value to clients using your strengths and competitive advantages.

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