Cushman and Wakefield Closes $8.5MM Deal, CREXi Gets The Assist

Posted: February 28, 2017


CUSHMAN and WAKEFIELD CLOSES $8.5MM DEAL, CREXi GETS THE ASSIST

 

The South Florida commercial team of Cushman and Wakefield led by Scott O’Donnell, Dominic Montazemi, and Miguel Alcivar located an out-of-market buyer in the $8.5MM sale of 1111 Park Centre Boulevard, a 57,105 SF office building in North Miami-Dade County. Online marketplace CREXi, helps find the buyer.  Park Centre is a four-story mid-rise office building developed in 1987 on a 2.9-acre site. The building was 92 percent occupied at the time of sale and was owned by NR Park Center, LLC (Nir Shoshani) who was represented by the Cushman Team.

 

The sale exemplifies the power of the CREXi platform as the buyer’s broker found the deal on CREXi and ultimately entered a market they were not previously active in. Typically, new market entrants have a steep learning curve in new markets and require significant time before becoming exposed to all available opportunities. By creating an online marketplace CREXi gives buyers immediate exposure to out-of-market opportunities. “Brokers would almost always like to reach every qualified buyer to drive pricing and optionality on behalf of their client, and buyers always want to see all the deals that fit their criteria. Historically the two sides have always wanted connect, but often have had a hard time finding each other. We created a conduit or marketplace to bring the two sides together,” notes Paul Cohen, Southeast Regional Director for the firm. “It always helps when you work with best-in-class brokers like Miguel’s team.”

 

The Cushman team has deep relationships in the South Florida CRE market with 29 closings totaling $529MM in sales and financing in 2016. It’s safe to say that they know all the active buyers on a first name basis so sourcing a new motivated buyer was a real boon for the team. The Cushman team had been in discussions with several buyers when Lowden reached out to them. The building was the right asset for the new-to-market buyer, 1111 PCB Holdings LLC, who acquired the asset for $8.5 million ($149 per square foot). According to Alcivar, “It’s exciting for us to use a marketing platform that sources buyers that we don’t know about. The CREXI platform is a powerful tool in our arsenal that allows us to maximize exposure, pricing, and value for our clients in the sale of their assets.”

 

Check out this property on CREXI: Park Centre


Profile of the Activist CRE Investor – Jonathan Litt

Posted: February 24, 2017 by Eli Randel, Director of Business Development


PROFILE OF THE ACTIVIST CRE INVESTOR – JONATHAN LITT

Activist investors are nothing new. Famed investors like Carl Icahn have made careers out of obtaining stock or equity in a firm and then attempting to force changes or restructuring to unlock perceived thus creating profit in a higher share price, the payment of dividends (Icahn held a major position in Apple and lobbied to them to pay out their cash in dividends), or from a merger or buyout. The strategy is perceived occasionally as shortsighted, sometimes self-serving, and often hostile as activist investors usually become a thorn in the side of management and executives. But often (not always) the activist is right and helps shareholders gain by unlocking value in a misaligned firm.

   

Where the concept might differ in the CRE world thus resulting in fewer activists is that typically REITs aren’t as complex as other industries and are mandated in their tax structure to pay a percentage of profit as dividends. REITs are generally the holding company for a portfolio of assets therefore the stock value should be relatively in-line with the value of the assets. However, how the portfolio is managed could dilute asset value. An additional complexity is that some REITs – despite being publicly traded – are still largely controlled by a scion or founding family resulting in a pride of ownership or level of control which may at times contradict fiduciary duty to shareholders. When an imbalance and inefficiencies are seen, opportunists like Jonathan Litt emerge. 

 

Jonathan Litt has become a popular figure in the Commercial Real Estate world by becoming a prominent activist investor through his hedge fund Land & Buildings. Simply put, the firm generally accumulates enough stock or equity to hold a significant position in a REIT, and then explores ways in which additional value can be unlocked which in turn should drive up the stock’s share price. Strategies might involve restructuring, merging with another firm, changing the executive composition, or selling off properties when it’s believed they are worth more than where Wall St. is valuing them. Why the strategy has been effective in recent years is because the Net Asset Value (or NAV) of several REITS has exceeded the corresponding stock value meaning the assets the company owns are worth more than the company (there is a similar story to the privatization of REITs). 

 

Despite seemingly being on the finance side of the industry more than brick-and-mortar, Litt knows property. He knows lease details, values, renovation costs, management; and the result is an average of 17.2% in annual returns (net of fees) in his first three years operating his hedge fund which outperformed the REIT index by 6.7% and the S&P 500 by 4.4%. In 2016 Litt made his mark when he recognized a Las Vegas recovery and took a position in MGM. He would help convince MGM to spin off many of their hotels into a public company. The result was a short-term 20% gain in share price (greater now) and while some question how much Litt’s involvement deserves credit, the response is always – it got done.   

 

Prior to forming Land and Buildings in 2008, Litt was a Managing Director and Senior Property Analyst at Citigroup where he coordinated a team of 44 research analysts and was considered one of the best analysts in the industry. Litt’s career began with European Investors and BrookHill Properties. Litt obtained a BA from Columbia University before obtaining his MBA from NYC. Jonathan Litt is also involved in several charities.

 

Culture Is King

Posted: February 23, 2017 by Eli Randel, Director of Business Development

CULTURE IS KING

An exert from CREXi’s The Marketplace Volume One.  To request a complimentary copy of The Marketplace, Click Here to provide your mailing address.

Startup-life can sometimes feel like armies of naysayers and competitors are telling you to give up and get a “normal job.” Our team approaches those armies like Spartan warriors: aligned incentives, firm principals, a unified direction, and a honed ability to do more with less than those who can sometimes be paralyzed by their size. We are the few going against the many, the creators of something new going against the preservers of something old, the resourceful vs. the overly resourced. Scarcity can be motivating and necessitate innovation while abundance can cause companies to avoid progress (when the need to survive is gone, evolution can also disappear). As we’ve grown and achieved measures of success, our humble roots remain and the culture of scarcity and innovation is something we focus on preserving.

With close to half of our employees being from Chicago and knowing each other as far back as middle school, two sets of brothers, and every employee (except Kodi & Snugs, the designated emotional support pups) being a shareholding partner, it’s impossible not to become a family. We protect our family tooth and nail and culture fits are more crucial than individual superstars (the “Bill Belichick Model”). Chips on shoulders are encouraged as are healthy debates which breed the strongest idea-babies. With relatively flat management usually consisting of player-coaches, we generally avoid the time-suck of over meeting (a meeting to discuss a future meeting followed by a meeting to recap a previous meeting).

While the focus on culture can sound squishy and perhaps secondary to business, we genuinely believe a good culture isn’t about making people feel good (although it should), but will be reflected in the user experience and brand perception and will eventually contribute to the success of the company. The benefit is a team able to do more with less because time isn’t wasted on corporate politics, meetings, and noise which allows us to focus our energy on building the best product in the market and servicing our customers above and beyond industry standards. Cultural strength also allows us to avoid the future expenses associated with overhauling an unhappy workplace including employee turnover, more meetings (but this time with consultants!), diminished productivity, and an army of detractors vs. a legion of ambassadors. Therefore, we hire the right people, give them real ownership in the company, and offer a healthy dose of autonomy. Resumes are always accepted (eli@crexi.com).

All Companies Aren’t Created Equal

While good cultures are not exclusive to small companies, larger companies have more opportunities for toxicity to hide and culture to go awry. As sources of value creation become harder to locate, credit can be misplaced and talented contributors can become marginalized. Steering a large ship can take time and reduce mobility and size can also create a false need for layers of management between executives and producers and “us vs. them” divides often form. As information becomes a currency controlled by managers, transparency – an omnipresent request of employees – often gets diluted as can feelings of relevance and importance. We have grown in team size since launching and are currently in the process of hiring several more talented people, but are committed to avoiding some of the traps inherent in size. Transparency and identifying value contributors are crucial to us.

Eli Randel

Eli Randel, CREXi Director of Business Development

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.

Developer Interview – Andrew Frey, Founder & Principal, Tecela

Posted: February 21, 2017 by Eli Randel, Director of Business Development

DEVELOPER INTERVIEW – ANDREW FREY, FOUNDER & PRINCIPAL, TECELA

Andrew Frey is part of an emerging class of developers with institutional experience and entrepreneurial vision, energy, and creativity. As the market cycle appears to be changing and several iconic developers have announced their upcoming retirements, emerging developers like Frey will help shape Miami’s next development chapter. 

After getting his BA from Boston College and then obtaining his JD from the University of Michigan, Frey began his career as a zoning attorney obtaining more than 2.5MM SF of development approvals and invaluable experience from Akerman and Gunster. Eventually Frey joined CC Residential where he would develop more than 1,000 market rate rental apartments for the large regional developer during a four-year tenure.  

In 2015 Frey founded Tecela, a boutique development firm specializing in urban-infill apartments in highly saturated yet underserved markets like Little Havana. Nearing completion of his unique pilot project at 769 NW 1st ST, Frey is looking for his next challenge.

In addition to Tecela, Andrew is involved in several organizations including ULI where has winner of the Southeast Florida Young Leader of the year award. Additionally, Frey is an occasional adjunct professor at the University of Miami and is involved in several other organizations.   

To contact and present a deal, please e-mail him at afrey@tecela.com. 

Who are some of the developers in the market you admire?

I admire my father-in-law Armando Codina for how he treats people and what he has built from nothing, and I admire his business partner Jim Carr for his generosity. I admire my former boss Andy Burnham for his foresight. Among other large developers, I admire Craig Robins for his incremental approach and the urban places that have resulted. And I admire everyone in Miami doing fine-grain adaptive reuse and new construction: Joe Furst, David Polinsky, Bill Fuller, Martin Pinilla, Nick Hamann, Matthew Vander Werff, Venny Torre, and others.

What is your general thesis as it pertains to parking, something you think differently about?

Get rid of government requirements, let the market decide.

If the next time your phone rang it would be your next project, what would you hope for?

A reasonable seller of a small lot in Little Havana.

What do you look for in a submarket?

Completeness. Does it have dense and diverse residents, proximity to jobs, and convenient retail?  Assuming it has a workable spread between land cost and market rent.

What is the last great book you read?

“Too High & Too Steep” by David Williams, about Seattle’s civil engineering history, because it has valuable lessons for Miami taking civic action in the face of sea-level rise.

What music have you recently discovered or rediscovered?

I’ve been listening to a lot of The Nice, ELP, Yes, and Rick Wakeman solo work, and recently went to Yes and Carl Palmer concerts. This is because, sadly, several progressive rock legends have passed away in the last couple of years. I listened to a lot of this music growing up, and fortunately my kids are becoming fans. 

What is your favorite food city?

I have to admit that I wasn’t much of a foodie before I got to Miami, due to my student budget, so my appreciation has grown with Miami’s quality offerings, which are now so numerous that I can’t imagine better.

If you could not pursue business and were proficient at any profession you chose, what would you do?

I’d be a street fashion photographer, like Bill Cunningham but for Miami, riding around on my bike, documenting the interesting people who make up our county.

What advice would you give a 20 year-old version of yourself?

Keep loving urbanism, but major in finance.

Who was your mentor(s)?

Pat Byrne for pointing me to urbanism, Kath Phelan for guiding my professional education, Neisen Kasdin for combining the professional and the civic, and Andy Burnham for teaching me the business. 

How do you look for or find development or investment opportunities?

I use online resources, relationships with brokers, old-fashioned letter writing, and walking or biking around a neighborhood.

What is your walk away number, or the amount of money you would accept to never be able to earn again?

Relatively low.  Off the top of my head, whatever pays for shelter, food, and clothes, gets my kids through college, a bike and a community pool membership, a guitar and a music streaming subscription, and a few plane tickets and gifts for my wife each year. I wouldn’t need to earn more, as long as I could still keep building buildings. 

What piece of advice to you always carry with you (or first that comes to mind)?

Put yourself in other people’s shoes.

Profile of a Legend – Jorge Perez, The Condo King

Posted: February 17, 2017 by Eli Randel, Director of Business Development

PROFILE OF A LEGEND – JORGE PEREZ, THE CONDO KING

Jorge Perez, the Argentinian born Cuban real estate developer, moved to the US to attend college and obtain his bachelor’s degree from CW Post in Long Island. Later he would obtain his master’s degree from the University of Michigan which his future business partner – Stephen Ross – also previously attended. Eventually Perez would move to Miami to lead the economic development department before embarking on a long and storied development career.

In 1979, Perez would form the Related Group of Florida with Stephen Ross. It was and remains an interesting partnership which has greatly benefited both parties. In a sense, Stephen Ross would franchise the company he founded and provide some form of platform equity to Perez as opposed to project financing which is generally more common. Perez began by operating low-income housing apartments across Miami. Later Perez would enter into market-rate apartments and soon after would become a well-diversified investor and developer. Today the Related Group is perhaps best known for their condo developments with Perez becoming one of the most prolific condo developers in the US and building an estimated net worth of $2.8B.

In 2006 and 2007, when the condo market (particularly in South Florida) began to slow, Perez would watch the empire he built teeter as several of his large projects where on the brink of collapse with large debt obligations looming. Given his development and operational prowess, Perez’s lenders recognized there was no one better suited to finish the projects and worked with Related to restructure the debt. With new found life, Perez would even form a “vulture fund” to buy other busted projects. When the market recovered, Perez picked up where he left off and continued to help shape the South Florida skyline. It’s estimated Related Group has developed 90,000+ condo and apartment units and remains one of the most active developers in the nation with dozens of cranes scattered across the South Florida skyline.    

Perez’s strength as a developer resides in his ability to quickly execute (and sell) projects, create an organization of “hard-chargers” – not an easy task in the unique Miami landscape, promote loyal “lieutenants” to lead and participate in upside, partner with competing developers to develop great sites his company may not control, create a development product catered to a diverse group of domestic and international buyers and price points, and create a brand for both his projects and the company. 

Today, Perez has begun to wind down his career and is in the process of handing the reigns of his company to his sons. In addition to being an avid art collector, Perez is involved in several philanthropic activities and has donated art and money to several causes across South Florida perhaps most notably the eponymous Perez Art Museum Miami in Downtown Miami.   

Lessons Learned Part III – More Broker Advice From Around The Country

Posted: February 15, 2017 by Paul Cohen, Regional Director

LESSONS LEARNED PART III – MORE BROKER ADVICE FROM AROUND THE COUNTRY

Since Lessons Learned Part II prompted such an overwhelmingly positive response, we decided to gather more words of wisdom from additional CRE industry leaders across the country for our third installment in the Lessons Learned series.

 

Greg Haynes CRE lessons learnedW. Gregory Haynes, SIOR – Senior Vice President
CBRE, Atlanta, GA

Don’t be afraid to fire a client when absolutely all else fails:
There are times when you might think you are getting abused by a client. You could be right. Be careful with this one because there could just be a “failure to communicate” as aptly put by Cool Hand Luke. Make sure before taking this step that you are right. E.g. If the client passes all the cherry assignments to a competitor and leaves you to deal with the pits, it might be time to spend your time elsewhere.


Nancy Phaneuf CRE lessons learnedNancy Phaneuf – Principal
Commercial Realty & Development, Tampa, FL

Buyers and Sellers like to have a hand in the outcome of their transactions. Even though you may actually “know” how this sale is going to go down, let the client “play” a little. They will want to be informed, of course, and maybe even assist in structuring a transaction. I try to keep my clients thinking about “what-if” scenarios, just to prime the pump with a few options that have legs to them. Get your client to embrace your idea as their own and they will enjoy the ride and the outcome.


Benjamin Silver CRE lessons learnedBenjamin H. Silver – First VP Investments | Director, National Office & Industrial Properties Group
Marcus & Millichap, Ft. Lauderdale, FL

Specialization is key: When I started in the business, I focused on Office buildings in Miami Dade. Not always the easiest product type and rarely in the highest demand. That being said, I stuck with it through the good times and bad times and became an “expert” in Miami Dade office building sales. Too often have I seen brokers chase the hot deal or the hot market or specialize in leasing, management, sales etc.. There are no short cuts. Study a market and be an expert in all things with that market. Know what you are selling, the drivers in the market, know who the buyers are and how the look at deals. Farm that market, build long-term relationships and over time, the business will come. The only way to do this is to be singularly focused. People will seek you out because of your knowledge or you will win business because of your demonstration of that knowledge. Regardless, the hot deals and markets come and go, but to build a long-term successful business you need to practice in a specialty.


Ben Cherry CRE lessons learnedBen Cherry, CCIM – President
Manor Real Estate, St. Louis, MO

Below are 10 rules I encourage my junior brokers to live by:

  • Strike while the iron is hot
  • Follow up quickly and often
  • Act as if…..(Act as if you’re the most knowledgeable, most capable broker in your market)
  • Go a step further than what your competition will go
  • Dress the part
  • Know your market
  • Leverage your relationships
  • Be resourceful
  • Think from your client’s perspective
  • Don’t ever give up

Paco Diaz CRE lessons learnedPaco Diaz – Senior Vice President
CBRE, Miami, FL

When meeting a new client make sure you are the one doing the questioning and listening and “Pick ’em Clean”, meaning make sure you ask about everything so you have a good idea of their important points. Return phone calls the same day you get them. Always come through with what you promise no matter what. A good reputation is very hard to establish and very easy to lose. Always be ethical and tell the truth. Always act in a way which is in the best interest of the client and everything else will fall into place. Be punctual and early to meetings. Never make things up, if you do not know something say it and find out.


George Pino CRE lessons learnedGeorge Pino, SIOR, RPA – President
State Street Realty, Miami, FL

Communicate Clearly – Don’t leave what you want to communicate up to a person’s perception. Be clear and effective with others in your communication so there are no misunderstandings. Having effective communication skills is imperative for your success. Positive communication will certainly increase the opportunities you find in your career and business. Having good communication skills will enable you to get ahead in certain areas where others who are less assertive may not succeed.



Paul Cohen

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.  Email Paul

Profile of a Legend – Gerald Hines

Posted: February 10, 2017 by Eli Randel, Director of Business Development

TEN HINES DEVELOPMENTS WE LOVE (OR WILL LOVE)

Gerald Hines, the famed developer and investor, developed some of the nation’s most iconic buildings, set new industry standards for building quality, and would ultimately build what’s been affectionately called a “complex empire” in reference to the complexity of his developments and his net worth of an estimated $1.3B

Born in Gary Indiana and eventually receiving a degree from Purdue University in Mechanical Engineering, Hines would begin his real estate career in Houston around 1957 as a side business to his engineering career. He mostly built warehouses and small office buildings until he received a big break in 1967 when Shell Oil Company hired him to build their headquarters in Downtown Houston.

Like most developers in the late 60s Hines began by borrowing money to develop and then keeping profits once his development was sold. It was considered foolish at the time to use your own capital to build. Hines would buck that trend and risk his entire net worth of $5MM to build the Houston Galleria Mall. Eventually Hines would use a development model similar to what we see today by raising outside equity while retaining about 10-20% and earning fees and a promoted interest for successful deals.

In later years Hines would focus on and excel at building “high-class” developments which offered strong profit margins, insulation from a struggling economy, and would allow him to focus on iconic design around the world. Known for their architectural complexity and innovation, a Hines developed building is usually unlike most others in their market. Today Hines (the company) is run by Gerald’s son Jeff who continues the legacy of bold developments, innovative design, and a unique relationship with their tenants.


TEN AMAZING HINES DEVELOPMENTS

THE LIPSTICK BUILDING – NYC

SALESFORCE TOWER – SF

DIAGONAL MAR CENTRE – BARCELONA

ONE MUSEUM PLACE – SHANGHAI

EMBASSY HOUSE – BEIJING

PARK AVENUE DALIAN – DALIAN

DUCAT PLACE – MOSCOW

DEL BOSQUE – MEXICO CITY

RIVER POINT – CHICAGO

53W53 – NYC

 

Lessons Learned Part II – Broker Advice From Around The Country

Posted: February 8, 2017 by Paul Cohen, Regional Director

LESSONS LEARNED PART II – BROKER ADVICE FROM AROUND THE COUNTRY

As a follow-up to last week’s post Ten Takeaways From 25 Years in Brokerage outlining my 25 years in commercial brokerage, we received several additional gems from top brokers around the Southeast. Here are some of our favorites.

 

Josh BeaverJosh Beaver, Vice President
The Nichols Company, Charlotte, NC

Be organized: Sometimes being organized and responsive is just as important as knowing all the answers. I can’t tell you how many times clients say how responsive and organized I am, as if that’s some incredible talent. Everyone in our business should be organized and responsive considering all the ways we’re connected today.


Richard ClarkRichard Clarke, Principal
Lee & Associates, Naples/Ft. Myers, FL

You make money buying. Trammell Crow would always say he made most of his money on the “buy” and not the sale.  Therefore, if you buy right you should be in good shape! If you don’t buy right, don’t expect the Sale to save you!

 


Bill ReichelBill Reichel, President
Reichel Realty Investments, Palm Beach, FL

Here are a few saying I think hit some high points:

  • God gave you two ears and one mouth, there is a reason for that;
  • Be more interested in the needs of the people you are working with and less focused on being interesting;
  • Say what you mean, mean what you say, and don’t be mean about it;
  • Time kills deals;
  • Confucius said, “he who said he could and he who said he couldn’t were usually right”;
  • I think jerry Seinfeld said, “the blessing in life is finding the torture you’re comfortable with”

Enn LuthringerEnn Luthringer, CCIM, Partner
CRE Consultants, Naples, FL

Be “the man”. When you are lucky enough to find a great prospective client in a tenant rep situation know his/her needs like they are your own. Open ended questions and in-depth conversation allow you to fully discover their needs, and then dig deeper. Show them all available possibilities and even ones not currently listed. Negotiate in good faith and close the deal. You will have a client for life, oh wait it doesn’t end there, stay in front of them or they will forget.


Jeremy WillitsJeremy Willits, Senior Vice President
Avison Young, Charleston, SC

Managing expectations is important in our work, both of Sellers and Buyers. Sellers will sometimes look to a high-water mark transaction as the number they must achieve, without considering the limitations or challenges of their property and/or circumstances.  Meanwhile, Buyers will sometimes seek that rarely achievable “deal.” But be careful, the unrealistic buyer’s most valuable currency is your time, and they squander it. A thoughtful discussion about expectations at the onset of an assignment can help you qualify whether it is an opportunity or a time drain.


Rene VivoRene Vivo, SIOR, Principal
Vivo Real Estate Group, Inc., Miami, FL

Longevity: “gift forward your experience”, teach someone you believe in everything you know about the business, trust that they will always use it to benefit the team, and ask them to gift the same – you will build partnerships that will last a lifetime.

 


Nick BanksNick Banks, Managing Director
Front Street Commercial Real Estate Group, Orlando, FL

It’s all on the record. There are no take backs in the real world.  Relationships are all that matter in life and in business. I strive to always choose my words and actions carefully and always do what is right. I know if I take this long-term view seriously with every interaction I have I will build lasting relationships and become a trusted advisor for my clients.


Sam HaleSam Hale, Founding Principal
Hale Retail Group, Atlanta, GA

….early in my career, I would work on anything that crossed my desk (land, shopping centers, apartments, etc). It took the 1991 recession for me to figure out, that it was best to be an expert in one field as opposed to knowing a little something about every property type. Both buyers and sellers respected your focus on one category.


Jay LeslieJay Leslie, Partner
Atlanta Land Group, Atlanta, GA

You don’t want to be a broker’s broker. If you don’t control the property through a listing or a client via an engagement agreement you really have nothing. Young brokers often hear about a need in the market and then act on that need on behalf of the broker who truly has the need. If they present a property that is listed by another agent then they are in no man’s land. The next mistake is that they ask for a referral fee.


Don McMinnDon McMinn, First VP/Sr Director Net Lease Properties Group
Marcus & Millichap, Atlanta, GA

Build Relationships. Don’t Chase Transactions. My CRE mentor taught me that transactions will make you money but relationships will make you a career. These quality client relationships require focused work and persistence to build and sustained discipline and integrity to keep. It requires an obsession with adding value and always putting the client’s needs first. It’s much easier to chase the deal and a quick check, especially when you’re a new agent. However, like the Robert Frost poem says: “I took the road less traveled and that has made all the difference.”


Paul Cohen

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.  Email Paul

 

Lessons Learned Part I – Ten Takeaways From 25 Years in Brokerage

Posted: February 2, 2017 by Paul Cohen, Regional Director

LESSONS LEARNED PART I – TEN TAKEAWAYS FROM 25 YEARS IN BROKERAGE

Before retiring from CBRE (while I still had hair) my team had a twenty plus percent market share in the non-institutional Miami Office and Industrial investment sales market. Here are some things I learned over twenty-five years in the Commercial Real Estate business:

  1. Less is More: It’s better to be a specialist in a particular area or a product-type than a generalist. However, make sure the marketspace can support you and your team. I made this mistake early in my career. I decided that I was going to be the Condo King (warehouse condo’s) and started doing deals until I realized that I would have to sell 100 deals a year to make decent money.  I switched to investment sales!
  2. Limit Dry Humping: When you’re a young and hungry broker, there is a tendency to work on deals that have very little chance of success. We used to call this “Dry Humping” – a term I coined from observing my neighbor’s dog! Seasoned brokers have amazing instincts regarding what deals (and people) will close. New brokers often spend time with the “Nigerian prince” no one has heard of who needs somewhere to park their money and your social security #. Time is valuable. Use it wisely.
  3. Needle in a Haystack: Imagine a triangle. At the base is the price that most qualified buyers will pay for a property. At the apex is the max price that someone will pay. Your job is to find that one buyer at the top.  The proverbial needle in a haystack. Most brokers can find the usual suspects. I once sold an office building that was converted to a hotel by a Venezuelan airline through a Russian residential broker. Had I spent much more time on it, my team would have accused me of dry humping, but somehow it got done. Outliers exist.
  4. Pick Your Clients: At first you have to work with every seller but as your practice grows figure out who are the clients that you like and who you can help and look for more clients like that. You’ll be surprised to discover that your top clients are remarkably similar.
  5. Third Broker: Often sellers believe their properties are worth much more than buyers do. Be willing to turn down those assignments. Not only will you not make money with an unrealistic seller, but you may damage your reputation and worse, you will send a message to other sellers that their properties are worth more than they are. Sometimes “It’s better to be the first son, second wife, and third broker”.
  6. There’s no “I” in Team: Assemble a team with complimentary skills and personalities. Be honest about your strengths and weaknesses. If you are an ADHD type broker, partner with an analytical organized introvert. A well-organized team of five can sometimes outperform entire firms of twenty.
  7. Sales and Marketing:  Most brokers get the sales aspect of brokerage, but many neglect marketing. You aren’t just marketing properties, you are marketing yourself to sellers. Develop a plan to keep front of mind with your target audience. Market yourself and market your deals. Some brokers are great at sourcing business and some are great at executing business. If you aren’t both, consider finding a partner to work with.
  8. Don’t Throw Up: When you meet with a potential client for the first time, spend more time asking questions and listening. Way too many brokers walk into meetings and “throw up” on the client. What does the client really need?  Don’t assume.
  9. Got to Have Some to Get Some: I think this translates to many areas of our lives; like jobs and dating, but in real estate you need to have a lot going on to get more listings. Once you get to a “tipping point” (see book by Gladwell) in your market space (about 20%) sellers will start calling you.
  10. Have Fun: It’s hard to maintain a high-level without having a bit of fun now and again.  We had a foosball table in the break room. When the company made us remove it we invented the game of Coastee. It was a fun way to unwind at the end of the day and built team camaraderie.

What advice would you like to share?  Send us your thoughts and we’ll put it in the next post.

Paul Cohen

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.  Email Paul