Forget Hillary, Where Did Your 30,000 Emails Go?

Posted: December 28, 2016 by Paul Cohen, Regional Director

FORGET HILLARY, WHERE DID YOUR 30,000 EMAILS GO?

I recently met a long-time broker-friend for lunch. In typical broker-friend style, he texted me five minutes before we were due to meet telling me he was finishing up a project and asked if I would come to his office first. I did. He was hunched over a workstation with who I assumed was his marketing assistant at the computer’s controls. As I approached, he greeted me with “BaBoom! 30,000 emails. Let’s get lunch.” Turns out that my broker buddy had just hired a new marketing whizz who had revamped his marketing platform. They both looked very excited.

“That’s great,” I told him, “So, what’s your delivery rate been?”

Blank stare.

“How many unique page views are you generating?”

Blank stare.

“OK,” I said now feeling a little like a bully “how many offers have you gotten?”

“We got one last week on the downtown development site!”

Turns out he wasn’t clear whether the offer came from his email campaign or a call off a sign, but 30,000 emails must have generated some of the deal activity he was experiencing. Right?

I explained to my friend and his whizz that technology was available that takes the guess work out of email campaigns. You can analyze exactly how many emails were delivered, viewed, resulted in downloaded OMs, and who performed these activities all on CREXi.com for free.

“Why are you paying a service without these capabilities over $200 a month when you can use CREXI for free?” I asked.

“Free is good but we don’t have time to learn a new mail program. Time is money, Pauly-boy,” was his reply. I logged into his CREXI account (of course, he had a CREXI account) and in three clicks created him an email marketing campaign. The campaign was customizable and directed buyers to his listing page where they could quickly execute his NDA, access his sleek offering memorandum, and open a due diligence vault with all the property information (he was still paying a firm $100/month just for a DD vault).

He was impressed. Then he noticed on his dashboard that each listing had a number of page views, Executed CA’s, Downloaded OM’s. He swore he had never seen that page before (He had because I had given him the demo). Then he looked at the Downtown Development site and clicked on the leads tab. The buyer who had submitted the offer had downloaded the OM over two weeks ago. I suggested that he should probably check his other listings. He agreed but after lunch and he was buying!

Paul Cohen

Paul Cohen, Regional Director

Paul Cohen is a Regional Director with CREXi based in the firm’s Miami office and focused on business development in the southeast. Prior to joining CREXi, Cohen was a Managing Director specializing in investment sales and equity raises at Cohen Financial, a national debt and equity advisor. Prior to Cohen Financial, Paul owned and operated his own independent real estate firm following a 12-year tenure at CBRE where Cohen was a Senior Vice President and led the Private Client Group in Miami-Dade County with a specialty in office and industrial investment sales.  

How Long Should It Take To Receive An OM?

Posted: December 21, 2016 by Paul Cohen, Regional Director

HOW LONG SHOULD IT TAKE TO RECEIVE AN OFFERING MEMORANDUM?

Back in 2002, I was at a conference for a select group of CBRE brokers who were invited to be part of a new division called the Private Client Group. It was an exciting time. Led by a maverick named Glen Esnard, we had one mandate: to design and build a platform within the CBRE network to work with the thousands of private real estate owners across the country. Previously, the company had a more institutional focus, but now recognized the opportunity to service a wider entrepreneurial client-base.

One of our first breakout sessions was led by a forward thinker named Jim Crupi; a consultant to many Fortune 500 companies and a former Army Ranger commander. I was pumped. His first question to us was: “how long should it take to get an offering memorandum?”.  I looked around the room, thought about how long it typically took; figured he was looking for a short answer and suggested one I thought was low but not crazy: “less than 24 hours.” Many of my colleagues could tell by his reaction that he was looking for a shorter time and offered their newly revised responses with the lowest being “one hour.” Of course, an hour was doable but in my experience, was not the norm. By the time a buyer gets a broker on the phone, the broker e-mails an NDA, the NDA is received, printed, executed, and then faxed (yes faxed) back, the executed NDA is then received by the broker and finally the offering memorandum is sent, at least a day if not several has usually elapsed. Crupi then challenged us to a group exercise. Our task was to pass a tennis ball around a circle of 20 people in the shortest time possible. Now we were a very competitive bunch so after three attempts we got it down to under 5 seconds. Crupi commended us but encouraged us to do it quicker. After some brainstorming, strong teamwork, and logistical coordination we finally touched the ball simultaneously. That was Crupi’s point: “Don’t accept the norm but challenge yourself to find new ways to do it better.” He invited us to do the same with Offering Memorandums. My mind was blown. What if we improve on and change the norm in other areas of the business?

Fast forward to 2016, I find myself with the same level of excitement as I did in the early days of the PCG: a member of a band of free thinkers with the goal of disrupting traditional norms. Providing tools to brokers to make them more effective with client reporting, email marketing, due diligence vaults, offer submission, and analytics. Oh, and you can download an OM instantaneously. Check out www.crexi.com and take the OM Challenge.

Paul Cohen – Guest Contributor

Paul Cohen, Regional DirectorPaul Cohen is a Regional Director with CREXi based in the firm’s Miami office and focused on business development in the southeast. Prior to joining CREXi, Cohen was a Managing Director specializing in investment sales and equity raises at Cohen Financial, a national debt and equity advisor. Prior to Cohen Financial, Paul owned and operated his own independent real estate firm following a 12-year tenure at CBRE where Cohen was a Senior Vice President and led the Private Client Group in Miami-Dade County with a specialty in office and industrial investment sales.

 

Data-Less 2017 Market Outlooks (Analysis Without Paralysis) Part 2

Posted: December 14, 2016 by Eli Randel

DATA-LESS 2017 MARKET OUTLOOKS (ANALYSIS WITHOUT PARALYSIS) Part 2

Read Part 1 Data-Less 2017 Market Outlooks

Despite the moving market pieces and political volatility which could affect the US capital markets, I muted the noise and “what-if” scenarios, spoke to several trusted advisors, and put my thumb in the air to paint a picture of what I think the 2017 CRE capital markets will look like:

Following a flurry of sometimes fruitless activity (lots of squeezing, minimal juice) in Q4 to close investment sales and refinance debt before year end, I expect a brief pause and “holding of the breath” entering 2017 as Trump takes office and investors shake off their added holiday weight. Eventually, the ambitious deployment targets and billions of dollars in unplaced capital will resume the deal chase and direct or LP equity will be plentiful albeit more risk averse. Despite the domestic perception of political risk, foreign economies still view the US as a safe-haven for capital and will continue to gravitate towards the US CRE market to escape their own struggling economies, political risks, and low (and even negative) interest rate environments. Large supplies of domestic and foreign capital competing for deals coupled with strong growth assumptions will mostly offset softening values resulting from upward pressure on cap rates caused by rising interest rates and costs of capital.

The debt markets will become tricky to navigate as interest rates rise and a new regulatory environment mostly for banks and conduits emerges (although Trump has discussed reversing many of the new regulations), but good deals with good sponsors will have no shortages of financing options from debt-funds, conduits, agencies, life companies, and banks. Ultimately lenders will be eager to get to work and to begin deploying their aggressive 2017 targets with balance sheet products from banks and debt-funds continuing to find an opportunity for larger market share. Borrowers will learn to settle for lower leverage or more creative capital structures as rising costs of capital will make debt harder to service and while younger investors will be unsettled by rising costs of debt, more seasoned investors will remember a time when interest rates were well into the teens and will conclude that rates are still relatively low and opportunistic for borrowers.

The last two quarters of the “Wall of Maturities” resulting from the many 10 year loans originated in 2005-2007 will pass mostly as a continued non-event as most maturing loans have successfully paid-off following a sale or recapitalization. Despite some value softening, most asset values remain above their 2007 value or at least above their unpaid loan balances. However, some market softening and the new financing environment may cause a handful of notable maturity defaults, but competition for any deals that emerge will pull returns below opportunistic levels. Distress investors will mostly continue to wait on the sidelines into extra innings. Assets that do default will take a year or two to make it to investors (unless sold as notes) and competition for the deals will push pricing above opportunistic levels.

Transaction velocity will be about even or slightly below 2016 as buyers may increase their yield requirements and sellers are slow to (or choose not to) adjust their expectations and the bid-ask gap – always existent but easier to bridge in a bull market – widens for many deals. However, as repeatedly stated, competition to place capital may offset and shake-off what would seem like a rationale cooling. Pent up capital supply, investors with long time horizons, expiring equity funds, and baby-boomer retirees rightsizing their income, will contribute to transactional movement and deals will still get done at a good pace.

Overall I believe 2017 will mostly mirror 2016 with some signs of softening and plateauing seen in certain product types and markets. I believe a tale of two bifurcated markets may emerge where good product in good markets will remain sought after and yields will remain low and asset values high. In most respects, basic value-add, low-risk profile deals, and core assets will feel similar in pricing to 2016 as institutional capital remains mostly bullish on long-term fundamentals and will look to keep the lights on by continuing to place capital. However, secondary and tertiary markets may initially slow in deal velocity in 2017 as private capital can be less cerebral to value changes (largely because capital is proprietary and not OPM) and sellers will have a hard time dropping their value expectations while buyers have a harder time navigating debt markets causing the bid-ask gap to widen and deals to become harder to execute. However, I think as the year progresses and sellers slightly loosen their expectations while entrepreneurial capital floods secondary markets chasing greater yields than core markets offer, volume in secondary and tertiary markets for sub-institutional product will increase – especially if job creation as promised by the incoming president occurs and infrastructure investment creates new occupiers and tenants armed with government contracts.

To find deals that fit your criteria, please visit www.crexi.com where you will find an aggregated marketplace of over 6,500 commercial real estate investments (and rapidly growing). One-click NDAs, due diligence vaults, and a user-friendly email marketing portal ensures you can immediately begin underwriting deals.

Eli Randel

Eli Randel, CREXi Business Development ManagerEli Randel is Director of Business Development based in CREXi’s Miami office. Eli spearheads CREXi’s growth and sales throughout the east coast as well as overseeing the national sales team. Prior to joining CREXi, Eli was director of dispositions for Blackstone’s Invitation Homes. Eli has also held management positions and production roles with Cohen Financial, Auction.com, LNR and CBRE where he began his career spending three years in Investment Sales before leaving to obtain his Master in Business Administration from the University of Florida.

Data-Less 2017 Market Outlooks (Analysis Without Paralysis) Part 1

Posted: December 7, 2016 by Eli Randel with Guest Contributor Paul Cohen

DATA-LESS 2017 MARKET OUTLOOKS (ANALYSIS WITHOUT PARALYSIS) 

The computer can’t tell you the emotional story. It can give you the exact mathematical design, but what’s missing is the eyebrows. – Frank Zappa

As a tech company and a marketplace that has seen approximately 7,000 deals come through our doors since our inception in October 2015, we are data driven and pattern focused. However, for our market predictions we walked away from our computers to drive our neighborhoods, speak with our clients, visit stores to get a feel for the holiday retail pulse, and approach our forward-looking predictions instinctively to avoid analytical-paralysis or failures to read the stories between the lines. CRE data and surveys can often organize the “what” but sometimes fail to explain the “why” (or input). Our goal for our 2017 predictions was to focus on the “why” with the expectation that we (or anyone else) will not get the predictions perfect but that the value sometimes resides in the thought-journey and not solely the destination.

Industrial Outlook Paul Cohen – Southeast Regional Director

For many, industrial real estate is the most boring asset type. Buildings usually lack structural sophistication, are often “dirty”, reside in less traveled outskirts, and yields as of late are compressed to once unthinkable lows and lacking in the return premiums that used to often exist. Despite the lack of sex-appeal, it’s possible industrial real estate is currently the most stable asset type and poised for long-term prosperity.

During the last three or four-years land values have increased significantly in most major port and shipping markets and often the highest-and-best-use (or only use that will “pencil-out”) has been residential even in once industrial submarkets (Doral, FL for instance). Housing brings new residents and demographics which creates the need for warehousing particularly in our new economy where firms like Amazon and FedEx have made speed and logistics a priority and therefore need distribution proximity to population clusters. Rising land costs have done two things simultaneously: 1) because land doesn’t pencil-out well for industrial development there has been little new supply; 2) increased residential demographics has increased demand for industrial space.

A reason I particularly like Industrial real estate and find it a safe investment is it remains semi-immune to technological advances which may threaten other asset types. Modern technology advances and trends like automation, e-commerce, and telecommuting do not generally hurt industrial occupancy or demand but could actually fuel it. Whereas telecommuting trends can contribute to office space demands, and e-commerce has contributed to the decrease of brick-and-mortar retail demand, manufacturing and distribution continues to need distribution hubs across the country to quickly and efficiently produce and distribute products. And while automation has created less need for proximity to skilled workers and may change floor plans, the need to be near population clusters for quick distribution will limit major sprawl from cities.

Future segment potential impactors and risks include: oil prices – which are currently low and affect manufacturing and transportation costs, the political landscape and resulting impact on trade, new manufacturing technology, and the housing market. Politically, the incoming administration’s oft-discussed views on trade could result in decreased imports which could slow activity at port markets. However, penalties for companies moving overseas to exploit cheaper labor (known as “offshoring”) could keep companies and occupiers in the US and potentially increase domestic manufacturing and exporting. Additionally, a professed government plan for mass infrastructure investment will certainly require industrial storage and manufacturing to support those construction efforts. Next level technology like 3-D printers could eventually change how products are manufactured and delivered but I think we have time to see how that unfolds and impacts to industrial will initially be limited. Last, the housing market should be watched as a cooling in the housing market can affect the industrial market in two ways: 1) a decrease in residential development will likely decrease land and construction costs and open the door for industrial developers to deliver more supply; and 2) occupiers tied to the housing industry (like tile and furniture producers) will suffer if the housing market cools. In 2007 while leading the industrial investment sale team in Miami for CBRE, we saw occupiers struggle, vacancies increase, and rents soften.

Ultimately, while pricing has risen and yields have dropped as low as 4% for core product in top markets, I predict industrial real estate to be a very safe asset type with great fundamentals and macro-trends favoring its long-term health. Deal velocity or transaction volume, which is currently down about 25% from 2015, will remain below historical norms as some investors can’t stomach the compressed yields resulting from competition for deals and strong growth assumptions, but patient capital will continue to acquire assets and will benefit in the long-term when they do. While rents in some markets have reached once unimaginable highs and will someday soon flirt with $20/SF levels, lower transportation and labor costs resulting from cheap oil and automation have helped manufacturers offset increased occupancy costs. As land becomes more scarce and development of industrial space less practical, we think occupancies will stay high and rent growth will fuel long-term IRRs despite currently high asset values.

At www.CREXi.com we currently have 786 industrial properties (and growing rapidly) being offered by the best brokers in the business. We encourage you to visit and learn more or reach out to me anytime @ paul@crexi.com or 786.877.0544.

Recommended Reading:

LA Times – Warehouse Robots

USA Today – Offshoring

Eli Randel

Eli Randel is Director of Business Development based in CREXi’s Miami office. Eli spearheads CREXi’s growth and sales throughout the east coast as well as overseeing the national sales team. Prior to joining CREXi, Eli was director of dispositions for Blackstone’s Invitation Homes. Eli has also held management positions and production roles with Cohen Financial, Auction.com, LNR and CBRE where he began his career spending three years in Investment Sales before leaving to obtain his Master in Business Administration from the University of Florida.

Paul Cohen – Guest Contributor

Paul Cohen is the Southeast Regional Director of Business Development and is based in CREXi’s Miami office.   Paul is primarily focused on expanding CREXi’s footprint in the southeast markets. Prior to joining CREXi, Paul was a Managing Director at Cohen Financial, his privately held real estate firm that specialized in investment sales and equity raises, and previously held a Senior Vice President position at CBRE.