Commercial real estate professionals aren’t waiting until 2021 to get ready for a productive year. They’re laying the groundwork for changes in their businesses, technology, and networking. Here’s what four commercial colleagues have in the works that might inspire new ideas for you.
Shane Cook, REALTOR®, My Home Group Real Estate, Phoenix
During the first 10-12 years of my real estate experience, I was a business owner and entrepreneur, building a multistate foreclosure acquisition company and a hardmoney lending business. When the market flipped, I was flipped with it, but the background gave me a bunch of experience, including in commercial real estate. I went into residential real estate but knew I wanted to add commercial and investment. I’ve been focusing on that for about five years, and this year, commercial and investment will account for more than half the business.
I started serving in the REALTOR® organization at the local, state, and national levels. I took commercial classes and let other association members know I was in commercial.
One colleague referred me to someone who ended up becoming my business and development partner in the purchase of 30 acres of land. The deal closed this year, and we’re working on a mixed-use industrial development in the city of Maricopa, about 45 minutes south of Phoenix. We bought the property from the city and got some good incentives to build the infrastructure. Next year, we’ll pitch to some bigger users for industrial space and logistics.
Some technology tools that became important in commercial real estate this year will stay at the forefront. I’m seeing more Matterport or VR/360-type images in listings. I own a camera to shoot the images necessary to put together a full 3D walkthrough, and I’ve been part of a software service for a few years.
My advice is to have a clear goal or pathway. I had a specific way I wanted to add commercial real estate to my business. I concentrated on getting referred to entrepreneurs and others who don’t always receive the attention they need from the bigger commercial brokerages. It’s important to focus on relationships, not necessarily money.
Moses Hall, owner, MoHall Commercial & Urban Development, Chicago
We’re a full-service commercial brokerage representing the interests of tenants, landlords, sellers, buyers, investors, and developers. Our primary focus is underserved communities on the South and West sides of Chicago.
Doing so much virtually has been an adjustment. I’m kind of Zoomed out. In the past, I’ve traveled to a lot of conferences. The networking afterward helped me create personal relationships, and that’s how I’ve normally done deals and pushed them over the finish line. It’s been a little bit harder to do that through a computer screen. When it’s safe, companies will combine virtual and in-person business because they can save by closing deals without paying for flights and hotels. We’re a boutique brokerage, so the cost of keeping up with technology has been a challenge. But it’s important that we stay on top of the latest trends.
My firm is adding a real estate development component in 2021. We’ll be going into underserved communities and building up commercial corridors. I was born in the Bronx, a borough of New York City. My parents were middle class, but we lived in a run-down apartment. It was just terrible—mold and rats. My parents had the vision to say, “Let’s save up to buy a home to raise our kids in,” and they bought a house in Queens, N.Y. We still own that house. Seeing that stability in housing transformed my thinking.
My firm will work on mixed-use development, with local businesses on the ground floor and rental housing on the upper floors. I’ll be building and renovating homes so that people can build equity and value for their family. This is a passion of mine, but I also want to show investors and developers that there’s profit to be made. And there are incentives I plan to use. Chicago Mayor Lori Lightfoot is rolling out programs supporting reinvestment in underserved communities. JPMorgan Chase has committed to help these areas as well.
My advice is to keep in mind that what happens in commercial real estate is part of a cycle. We will recover, even though we won’t go back to what used to be. The industry will be a hybrid of old and new.
Soozi Jones-Walker, CCIM, SIOR, president and broker, Commercial Executives Real Estate Services, Las Vegas
My agents and I specialize in investment properties and the leasing of office, retail, and industrial properties. Fifty percent of what I do is sell investment properties: office buildings, retail centers, industrial buildings—that type of thing. So I’m going to watch those property types closely in 2021. What my clients look for is rental income growth.
In early 2021, as people come out of this malaise, we’re going to need to hit the ground running. The first thing most commercial real estate agents should do is pick up the phone and call prospects. Research the people before you call; then call them to talk about the properties you have and their needs. If you can see them in person, do it.
We need to contact landlords and sellers and give them good information, which means we should start our research now. Every market has one or two platforms where folks announce their new tenants and the sales and loans they’ve just made. I read those religiously. That’s how I know if a medical firm has expanded or gone out of business, for instance. I contact the agents involved in those transactions, congratulate them, and ask for some basic information. Then I repackage that information and share it, saying, “You may think this market’s been slow, but we’ve had [this many] leases in the last X months. Here’s how they break down.” People will listen to that information.
As we get going, I’d advise colleagues to do these things:
- Think creatively. Put into practice the strategic thinking processes you've learned through education programs.
- Be kind. People are raw right now; a little kindness goes a long way.
- Have fun. People are yearning to laugh again.
If you’re going to change your focus from, say, retail to warehouse, now’s the time to get the information you need and get going. Don’t wait until next year. I’d also suggest putting on your high heels or dress shoes. We’ve been casual, but agents who are dressed up and ready to work will grab the opportunities in 2021.
Nancy Lane, 2021-22 NAR treasurer, broker, Lane-Harkins Commercial Real Estate, Jackson, Miss.
Our firm handles leasing management and sales for every type of commercial real estate except heavy industrial. We’re trying to up our game in technology. After the onset of the pandemic, we changed management of our remote computer access to a new company that we thought was more user friendly. We also brought all our machines up to date and changed our backup system.
Our interoffice communication needs to be stronger, and that’s going to happen through technology. We want to position ourselves so that if anything hits again, we can immediately put into action the communication we need to work from home. We’ve already taken steps to enable us to access all the files we need from home.
The strong retailers we’re working with want long-term lease renewals. They’re mostly discounters that never shut down and, in fact, had more business because other businesses were closed. They’re saying, “We need to renew our lease but we’re projecting that we won’t be doing as well because of COVID-19, so we need a lower rental rate.” The landlords want to keep the tenants. They have responsibilities to lenders. And so they negotiate. It’s definitely a tenant’s market at this point.
I’ve thought for several years that our retail stores may become more like catalog stores. Consumers will go into a store and see and touch the item on display, then order from the store, their phone, or their computer. Retailers may also end up having storefronts with a warehouse behind them. Some of the big hospitals have taken big-box space and split it up into various outpatient departments for specialists. They’re building these units closer to residential areas to make it more convenient for people.
I can’t predict what’s going to happen next, but we need to be prepared to respond quickly. I have a sign on my office door that says, “Opportunities are never lost. Someone takes them.”