Want to Break into Commercial Real Estate?

Posted: July 5, 2017 by Paul Cohen, Regional Director with contributions from Eli Randel


WANT TO BREAK INTO COMMERCIAL REAL ESTATE?

HERE’S SOME ADVICE

It must be that time of year. We’ve had three calls from acquaintances asking what’s the best way for their child, who just obtained their degree in Greek Mythology (or some other similar study), to get into Commercial Real Estate (“CRE”). Perhaps it’s a sign of “market heat” and CRE’s continued visibility as an industry, but there is no shortage of interested applicants for commercial real estate opportunities. It’s a competitive landscape, so what can applicants do to more effectively break in?

My first suggestion to future graduates who think they want a career in CRE is: “Don’t get a degree in Greek Mythology,” but hindsight is 20-20 and interestingly, when you go through the BIOs of successful CRE professionals, you’ll find a diverse list of backgrounds which is one of the many things we like about the industry (9 Reasons We Love CRE). Anyway, who am I to judge? I got a degree in Aerospace Engineering. I used to tell clients it was the perfect major for selling warehouses by the airport.

Here is some more advice for “young Sammy” who wants to break into the world of CRE:

Nothing is easy. If you want to become a part of the CRE industry because you think it’s an easy way to get rich or because you think you’ll impress people with your fancy business card – don’t waste your time. In CRE you will work hard. You will face rejection. You will not get rich in your 20s (most likely) and if in a sales role, you may go extended periods of time without income. If you aren’t tough, find another field. Throw out your get rich quick books. Most of the authors got rich selling their books to you, not in the field they profess to be masters in.

It’s all relative. Most CRE brokers don’t get hired from a wanted ad. It’s generally a function of who you know and often that person is a relative or is a friend with a relative willing to help. If your approach is only to submit resumes online, you will have fewer options. Maybe you don’t know the person personally but, if you can get an introduction to a top professional at a national firm; it will open doors. LinkedIn is a good way to figure out who you know and who knows who. If you’re not connected to anyone in CRE then start with me: Paul Cohen.

Clean up your act. Your resume should be clear and concise and visually appealing. I personally believe in keeping a resume to one page – even for seasoned professionals. If longer, it should be for good reason. CLEAN UP your resume. It should look like it was created after 1997 not just in content, but in visual quality (I’m talking to you Times New Roman users). Take more than one copy to an interview. Customize your resume for different opportunities. Your resume is often your first impression. Make a good one.

Prepare for the interview. Research the company you are meeting with and write down some thoughtful questions. We recently had an applicant who confessed he knew nothing about CREXi and asked if there was somewhere he could get more information: “Have you looked online?” was our response. Sadly the answer was “no.” You will also be asked to introduce yourself. If you just read your resume as your introduction, you will lose your audience who will read along with you and will finish while you’re still talking. Prepare a customized “elevator” pitch that will tell your story: Where are you from? What drives you? WHY SHOULD THEY HIRE YOU? (hint: it’s probably not because of one course you took, your 3.1 GPA, or an internship you did at your uncle’s company). If you are doing significantly more talking than the other person, you might lose them. Ask questions. And last: READ BOOKS. I often hear applicants get asked: “what was the last book you read?” If you have a good answer or it’s a book they also read, you just connected. Don’t have any answer? That loud noise is dead air. Read these two recent posts for book suggestions:  Book Suggestions 1 and Book Suggestions 2.

Start with the best. The best firms usually have the best employee development. Research the best firms and brokers in your market. This will help you assess the variety of firms and will also be helpful in finding the best personal fit. One firm might be more entrepreneurial than others for the person who seeks a “jack-of-all-trades” role. Some are more specialized and structured. Fit is crucial. If you are an introverted analytical type who gets an offer for an extroverted cold-calling position it could be a waste of your time and theirs. Some people are talented enough to learn and master skill sets, but if it goes against your basic wiring, it is less likely to be sustainable.

Give good phone. Here’s the reality, to get in the door and to land that first job (or to get started in any sales career) you must be able to make calls – even if it’s only for a probationary period. There are several books and recordings: Cold Calling Techniques by Shiffman is a good start. There is a generation of people who grew up without widespread use of the telephone. Get comfortable using one or the generation that did grow up with phones, will have a hard time connecting with you.

Get skills. If you want to join an investment sales team then proficiency in Argus will give you a head start. The more you know, the more value you’ll be to the team. Excel masters – like pivot tables and macros – are valuable (Pryor). Being a social media guru can open doors. If you can help your broker trend on LinkedIn they might make you a partner. This is a unique skill set a young professional can bring to the table. Did you get a sales associate license before needing one? Are you LEED certified? Have you taken a CCIM 101? Show that you want the opportunity and are committed to a career in CRE.

Follow Up. Once you’ve interviewed, be sure to follow up. I have colleagues who won’t even consider hiring the best candidate they ever met if there is no professional follow up. For many of us who are conducting an interview, we are testing your ability to interact with a potential client. If you don’t follow up with the person who would hire you, will you follow up with the client who may someday potentially hire us?

Good luck and happy hunting!


Paul Cohen

Paul Cohen, CREXi Convenient TechnologyPaul 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

ICSC RECon Redux

Posted: June 7, 2017 by Paul Cohen, Regional Director of Business Development


ICSC RECon REDUX

In May I shared my Top Ten Tips for Surviving ICSC RECON 2017. Having now had two weeks to work off my hangover, I thought it valuable to share some additional thoughts from this year’s conference. Send me your tips for surviving and thriving at ICSC Vegas.

 

  1. Stay off the strip. I’ve always found it a little depressing to come down from my hotel room each morning and see an old lady on the slot machines next to an insurance salesman who has been playing Blackjack all night. This year, our team at CREXi used AirBnB to rent a five-bedroom house five minutes from the strip. Initially, the goal was cost savings and flexibility as we hadn’t finalized our roster, but what we found was the time we spent together in the evenings before going to the strip was an effective team building experience. As someone who has stayed on the strip multiple times, it was nice to see where the locals live, go for a run in the neighborhoods without inhaling cigarette smoke on my way in and out of the hotel lobby, and to support some local restaurants and bars. I’m not suggesting readers do it every year, but give it a try.
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  3. Not just a pretty face. I got some blow-back on my previous Survival Guide post for suggesting that unless you are “an attractive woman” people won’t just stop by your booth. Some took that to mean that as a female professional you should use your looks and not your abilities to get business. Far from it. I was talking about paid models meant to lure passerby’s in. While the practice seems to be on the decline, when applied it often comes off as tacky and less than professional.
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  5. One giant step for man. Take advantage of the vast distances walked by setting step goals for the day.  I took 45,484 Steps over the two days.  Anyone do better?
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  7. Elevator Pitch Redux. I visited several booths and asked what I believed to be a simple question: What do you do? I expected a simple elevator pitch. You know, like if you were going up an actual elevator. Here’s what happened instead (on almost every occasion): first, the booth host became defensive and asked who I was while they looked directly at my chest to scan my badge. Five minutes later after completion of their “elevator pitch” I was still no clearer. I felt like I was in Willy Wonka’s Glass elevator on the way to Umpa Lumpa land! I am now getting emails from some of these companies and still don’t know what they do.
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  9. Get better swag. Sorry but somebody had to say it. Other than the group that gave out flip flops and the sandwich guys, the swag was very unimaginative. Throw away those stress balls. I suggest that you come up with a theme based upon what your company stands for and then build around that. According to Rich Curran, owner of Expo Convention Contractors (the country’s leading Convention Services provider), “make your theme and swag match. For example, Miami based developer uses a beach theme and gives out sunglasses. You can also use your giveaway to capture leads without asking. You can set up a photographer and offer headshots or a caricature artist. A simple business card drop gets them in line.” 
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  11. The booth, you can’t handle the booth. It was interesting to see how companies handled their allotted space. I saw quite a few “closed” booths, meaning booths that had physical barriers to entry and some with gate keepers behind big desks. Booths should be open in my opinion. Think of a playground for adults. They can come in and see what you are doing. Host a Happy hour in the booth. Nothing says welcome to our booth like a Goose and soda. Expo’s Curran added “a welcoming environment keeps attendees there and talking. Making connections are key, so having someone want to stay at your booth longer gives a chance to build a relationship. Make your booth about an experience not just a product or service.”
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  13. Don’t go deep the first night. This was in the original post but worth elaboration.  I saw a lot of hurt people on Tuesday morning. My advice is to take it easy for the first night (or two if you’re staying longer) and stay hydrated. When you do eventually hit the strip, know your limits and stay within them. Some of my best relationships have been made with people I get a little “loose” with, but it’s a fine line. Remember this is a company function and any inappropriate behavior can hurt your standing within the firm. Whether you realize it or not.
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  15. Go to the parties. I missed the Chainsmokers but got front row to Nelly (Thanks Colliers International!). A confession, I forgot who Nelly was, I was thinking Nelly Furtado so when “Nelly” (rapper from circa 1998) hit the stage I was a tad disappointed. However, once Nelly started the show I got into the mood and found myself singing my own version of his song: 

     

      If you want to go and list your deals with me
      We’ll stick em on da CREXi real EZ.
      Oh why do we do it this way? (Hey, we don’t cost no money!)
      If you want to go ahead and get on CREXi
      Put on a Triple Net or a storage Facilit-E.
      Oh how do we do it this way? (Hey, we don’t cost no money!)

     

    You had to be there!


Paul Cohen

Paul Cohen, CREXi Convenient TechnologyPaul 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 – Stephen Ross – The Empire Builder

Posted: April 14, 2017 by Eli Randel, Director of Business Development


PROFILE OF A LEGEND – STEPHEN ROSS – THE EMPIRE BUILDER

Stephen Ross, with an estimated net worth of approximately $8B, is one of the wealthiest real estate developers in the world. Additionally, Ross is a generous philanthropist and team owner of the Miami Dolphins. How did the Detroit native build his NYC and beyond empire?

 

Stephen Ross was born in 1940 in Detroit, Michigan. In high-school Ross relocated to Miami-Beach before eventually attending the University of Florida. Ross would relocate closer to his childhood home by transferring to the University of Michigan and following graduation would obtain his JD from Wayne St. School of Law. With a loan from his uncle Max Fisher – who Ross would call “the important role model and inspiration for me in my life” – Ross would get his LLM in Tax Law at NYU in 1966.

 

Ross began his career as a tax attorney at Coopers and Lybrand in Detroit before moving back to New York City to accept a job in the real estate department at Laird Inc. Ross would then work for Bear Stearns before leaving with a $10,000 loan from his mom to employ his tax knowledge and construct federally subsidized affordable housing with a syndicate of investors. The venture was successful and would propel Ross to take his earnings and experience and develop more traditional deals on his own. His new projects would have an emphasis on high-quality architecture and engineering and were the basis for which the Related Companies was founded in 1972 under Ross’s control.

 

The Related Companies has grown into a global diversified real estate developer and investor which employs approximately 2,000 people. Among other projects, Related is currently developing Hudson Yards on 28 acres on the West-Side of Manhattan which will eventually deliver 12.7MM SF of space. At $15B, the project is the largest private real estate development in America. In Florida, where Ross also has a residence, he and his long-time business partner Jorge Perez have helped shape the Miami and Ft. Lauderdale skylines delivering thousands of condo and rental apartments. Ross is also majority owner of the Miami Dolphins and their stadium which has propelled him into a more national spotlight. Stephen Ross is also a generous philanthropist with donations to the University of Michigan of approximately $300MM in addition to several other worthy causes. 

 

Through familial support, education, knowledge gained from previous jobs, hard-work, natural smarts, and likely some good old-fashioned luck, Ross built a real estate empire which has helped shape the NYC skyline and beyond.

 


Sell Properties Like Stephen Gostkowski

Posted: April 12, 2017 by Paul Cohen, Regional Director


SELL PROPERTIES LIKE STEPHEN GOSTKOWSKI

CREXi BlogI know what you’re thinking. Have I lost my mind? Why is the kicker for the New England Patriots selling real estate? Did he just get fired by Belichick and get picked up by the local Remax affiliate on the waiver wire? Not even close. Stephen Gostkowski is still alive and kicking (punt intended (that was intended too)) and getting ready for another 87.1% season.

 

One challenge with sellers is they want to believe the broker who forecasts the highest price not the broker who tells them the most realistic outcome. It’s all too easy to start a bidding war with other brokers and before you know it you have just landed a listing for 20% above your original valuation.

 

As a former broker, I liked to use the field goal analogy when speaking with sellers about their properties. I would put the price that even the most conservative investor would pay at the 1 yd line – about the equivalent of an extra point – and the highest price imaginable at the 45 yd. line (meaning a 62 yard field goal which has an approximate success rate of say 10%) and explain to the seller that the higher the price, the lower the success probability, but also explain that I was the best field goal kicker in town.

 

CREXi BlogIn fact, commercial real estate has different values depending upon who’s buying it. Take a suburban office property for example. To an investor, it will have a value based upon a cap rate range. An owner/occupier may be willing to pay slightly more if they view it as their office and have different economics, emotions, and maybe even different financing. A developer may value the property even higher if there are potential zoning changes and increased time to get said rezoning.

 

Selling to an investor at a market or slightly above market cap rate is like an extra point. Most brokers should be able to kick that. Only a bad snap or hold will stop you making a sale.

 

Selling at a premium cap rate or to an owner-user is a little tougher and requires wider reach. Most competent brokers can get the equivalent of a 25 yard field goal utilizing their broker and investor network but you need to have a more targeted approach if you want to hit from further out.  The success rate dramatically drops off unless you have Gostkowski accuracy.

 

Getting maximum pricing relies not only on accuracy but range. Only the top brokers have this.

 

A top Broker has deep relationships in the market, knows how to approach investors, owner users, and developers to structure a deal that makes sense and then strike at the right moment. They will use the best tools to help them reach the right buyer and then run a tight process to get the deal closed.  Many of them have made CREXi part of their team for it’s ability to enhance their range and accuracy!

 

Are you the Gostkowski in your market?  How do you drive pricing and help get that extra point or three?


Paul Cohen

Paul Cohen, CREXi Convenient TechnologyPaul 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 CRE Marketing Executive – DJ Sandler

Posted: March 14, 2017 by Doug Shankman – Regional Director, West Coast CREXi


PROFILE OF A CRE MARKETING EXECUTIVE – DJ SANDLER, VICE PRESIDENT OF MARKETING, JLL

DJ Sandler joined commercial real estate powerhouse JLL in 2015 after a very successful four-year tenure at Raytheon Company as the Deputy Director of Communications (#117 on the Fortune 500 in 2016). Now as Vice President of Marketing for the West Coast at JLL, the Seattle native has brought his data-driven, multi-channel marketing approach to another Fortune 500 company (#436 in 2016). Based in Downtown LA, I had the opportunity to catch-up with my old friend and colleague and learn more about him, JLL, and his views on the commercial real estate market and more.

 

DS: In the constantly changing brokerage landscape, JLL has stayed relatively consistent and focused on their core business. What do you see changing – if anything – during the next chapter of your storied company?

DJS: In my opinion, the next chapter at JLL will be defined by the digital and data revolution. Real estate has been slower than most sectors to feel the full transformational effects of digitalization – think of banking, retailing, and travel and how they’ve been dramatically altered by smartphones and online businesses. You really don’t have to look farther than CREXi to see all of the potential. The real digital opportunities for real estate are still to come. JLL is investing significant time and money with the goal of becoming the clear digital leader in real estate services.

 

DS: What role do you see tech playing in the commercial real estate landscape over the next ten years?

DJS: In ten years, I don’t think tech will be playing a role in the CRE landscape, it will be the landscape. Even in a built environment such as ours, we cannot ignore the trends and changing needs of B2B. After all, B2B is still driven by the people that make up those businesses. As a result, businesses will demand the same benefits from technology as the consumer: convenience, accountability, expertise, end-to-end solutions and transparency – any time of the day, all at their fingertips.

 

DS: You came to JLL following a very successful career at Raytheon. What similarities have you found within the commercial real estate and defense contractor industries? What glaring differences?

DJS: Both industries are driven by a core set of big players, which means sometimes you go up against them head-to-head on a pursuit and sometimes you might end up partnering on a deal. Reputation and integrity matter because you never know who you might be on the phone with a week from now.

 

DS: You have a data-driven approach to your craft. What piece of data or information about how marketing materials are disseminated and received do you think would surprise most people?

DJS: Data driven marketing is all about business development and revenue producing solutions. Many marketing organizations broadly circulate material, cross their fingers and wait to see who comes back – almost like throwing spaghetti at the wall to see what sticks. That strategy is expensive, unpredictable and hard to prove value. Through data-driven marketing, I know who my prospects are. This allows my team to develop targeted, relevant and engaging materials for a core set of decision makers. When marketing plays a role in converting prospects into customers it’s incredibly rewarding and allows us to justify our extended value in an organization.

 

DS: Without the blinders of a deep background in Commercial Real Estate, what inefficiencies do you see in the industry that sometimes surprise you?

DJS: Perhaps there’s a trend in my responses here, however I was surprised at the dependence on traditional quarterly reporting, which is valuable but is also less forward looking. With the incredible amount of data currently available, I’d like to see a shift towards more real-time reporting. What’s the narrative today? How can we help our customers make good decisions based on the latest market information right now? The speed of economy is increasing and our customers will eventually demand us to keep pace.

 

DS: Most of our early interviews have been with east-coasters so your west coast markets have been underrepresented. What is your favorite food city?

DJS: If you’re a foodie, pick a weekend and book a flight to Portland, Oregon. Hit the food carts for lunch, Pearl District for dinner, and the microbreweries in between.

 

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

DJS: I try to spend the majority of my day looking forward; it’s helped me and my team focus on the art of progress instead of trying to perfect the past.

 

DS: If money was of no concern and you were proficient at any skill you chose, what career would you have chosen if you could start over and do anything?

DJS: I’ve never parted with my childhood rock and mineral collection and often think I could have been a famous Geologist, if there is such a thing.

 

DS: What trend or fundamental do you think the market-herd is overlooking when analyzing the commercial real estate market?

DJS: In my experience, the ‘herd’ has embraced and successfully leveraged financial and real estate indicators very well. However, we partner with JLL Research very closely to study broader economic and industry sectors to identify up and coming trends in the market, specifically on the west coast. By doing so, we can get out front and meet the needs of both occupiers and investors in a new or developing vertical.

 


Lessons Learned Part IV – Networking, Honesty, and Teaming

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

LESSONS LEARNED IV – BROKER ADVICE ON NETWORKING, HONESTY, AND TEAMING

And the advice keeps on coming.  This post we cover topics from the importance of networking, honesty, and teaming.  I look forward to receiving more advice.  Checkout the past three posts: 

Lessons Learned Part I – Ten Takeaways from 25 years in CRE 

Lessons Learned Part II – Broker Advice From Around the Country

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


More CRE Lessons Learned - Carolyn Niemczyk
Carolyn Niemczyk, CFM
Keyes Commercial, Port St Lucie, FL

Be willing to go the extra mile:  The majority of my clients stay with me thru purchase after purchase and lease after lease. I can get the a/c fixed on a Sunday or a locksmith there Friday night to avoid any overtime charges. Maintain good relationships with all service providers.


More CRE Lessons Learned - Alan Bolduc Avison YoungAlan Bolduc CCIM, SIORSenior Vice President
Avison Young, Charleston, SC

Networking 101.  Find a group, association or organization where you will find the people you want to meet and get to know as possible clients or can refer you to potential clients… BUT, you need to be the only one in the room that does what you do!  And go often.  No one knows when you aren’t there, only when you are!


More CRE Lessons Learned - GG Galloway - CBCG.G. Galloway – Associate/Partner
Coldwell Banker Commercial Benchmark, Ormond Beach, FL

  1. Never be afraid to ask a dumb question…… it may save you or your client a lot of money.
  2. Being in the business for 30 years, one would think you have about heard everything there is too hear…. wrong…… stay actively involved in your trade associations as well as continuing your continued education.  Give back to your communities by being actively involved not just in your professional and trade associations but equally involved in community activities and nonprofits. Reach out and become mentors to others, and help and share some of the success, failures, pitfalls, and sidesteps that we ALL have enjoyed throughout ones career.
  3. Teaming is the way to go.  A team will accomplish so much more than an individual that thinks they have to have it all. There is no “I” in TEAM, a team has multiple fronts, hands, ears, and eyes. Best of all a Team can be at multiple locations at the same time as well as completing multiple tasks outside an office as well as multiple tasks within an office.
  4. Don’t bull shit your way out of a question that you don’t have the answer for…. We are professionals….. and when a question arises that you have no real answer for….. let the person know you don’t know; however, I will find out the answer to your question and report back to you with my findings.
  5. Live by the sunset rule….. if it was important enough for someone to call you today….. call that person back by sunset the day of  or at least before you leave your office if it is after sunset…even if you leave a message to an answering machine….. let ALL know your call is very important to and the success of my business……thank you for the consideration.
  6. Email, LinkedIn, Facebook, Twitter, texting……………. how about just an old fashioned hand written thank you note or card……… Thanks for your business or thanks for your time today.
  7. Business cards are not dinosaurs…. pass out two when you give one out…… one to the customer and ask them to give one to a friend or customer of theirs who may need your services.

More CRE Lessons Learned - Aaron LigonAaron Ligon – Managing Principal
LCRE Partners, Charlotte, NC

  • Be clear, and tell the truth.  Brokers often try to solve problems before presenting a difficult situation to a client.  Or in an effort to be helpful, they’ll obsess about how to present a situation or set of circumstances in the most positive way possible. Simply be clear, and tell the truth.  Do it quickly.  State the problem, outline the circumstances, and suggest solutions, or at least some potential action steps to navigate toward a solution. Most problems get worse when you delay discussion.
  • Simple is best.  In a world of deep analytics and tons of data, sometimes simple is best.  Delving into cap rates, levered yields, after-tax IRR’s, and complex waterfall structures can leave your head spinning.  When analyzing a potential acquisition for yourself or a client, don’t forget to also make the simplest possible analysis.  How does the purchase price of the asset compare to other trades on a cost per square foot basis? Is this purchase below or above the cost of reproduction?  Irrespective of a tenant/lease, what is the real rental rate for the property?  Is the underlying land likely to appreciate?  Answering those and other basic questions will often provide clarity around an otherwise complex transaction.
  • Be a value-add for your clients:  Adding value in the real estate service business requires one or more of three basic contributions: 1) Information, 2) Resources, and/or 3) Hard work.  The most successful real estate brokers and investors leverage all three.  If you don’t have financial resources to invest, you should be well-informed and working hard for your clients.  If you’re not offering intelligence, financial resources, or diligent work, you’re not adding value, and you won’t fool them for long.

 

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 – The Gambler, Steve Wynn

Posted: March 3, 2017 by Eli Randel, Director of Business Development

 

PROFILE OF A LEGEND – THE GAMBLER, STEVE WYNN

 

“Money doesn’t make people happy. People make people happy.”

 

Steve Wynn has built an empire worth an estimated $2.6B with serendipity and entrepreneurial grit.

 

Born in New Haven, CT in 1942, Wynn would eventually graduate from University of Pennsylvania with plans to attend Yale Law. However, Steve’s father passed away before his UPenn graduation leaving him with $350,000 in gambling debt which forced him to take over and operate the family’s many Bingo Parlors mostly surrounding Wayson’s Corner, Maryland. Wynn would expand the business before moving his family to Las Vegas in 1967.

 

It was in Las Vegas that Wynn entered the casino business by buying a small stake in the Frontier Hotel and Casino with the profits he eventually made in the family business. By 1971, Wynn had managed to profit enough from the Frontier and several well-orchestrated land deals to gain a controlling interest in the Golden Nugget Las Vegas. Through a series of renovations, he would attract high-end clientele to the Golden Nugget and would increase his stake to become the majority owner by 1973. In 1977 Wynn opened the casino’s first hotel tower which would be followed later by several more hotels. Around that time, Steve built a lasting friendship with the Sinatra family before focusing east towards Atlantic City where he developed the Atlantic City Golden Nugget which he would later sell for $440MM.

 

Wynn would go on to build the Mirage, the Bellagio and several other well-known hotels and casinos before selling his company, Mirage Resorts, to MGM Grand for $6.6B in 2000. He would then form Wynn Resorts Limited which he would take public in 2002 becoming a billionaire two years later. Most of Wynn’s empire was built with his ex-wife, Elaine, who he would marry twice and who sat on the board of directors for 13 years. Today Wynn is remarried, an active art collector, and was also the inspiration for Andy Garcia’s character in Ocean’s Trilogy.

 

Wynn’s rise to prominence can be attributed to his smarts, honesty, big vision, guts, a strong support network, and of course some luck.

 

SOME SELECT STEVE WYNN QUOTES:

“Keep it simple. Tell the truth. People can smell the truth.”

“This office is smaller than the last one I had. I’m not trying to impress people. I want to be close to them.”

“Other people’s successes are good news – for them and for you. Good for you because they show you a way to go.”

“If I complain about a traffic jam, I have no one to blame but myself.”

“Change is not threatening.”

“I am a self-made brat.”

Why Now?

Posted: January 18, 2017 by Eli Randel, Director of Business Development

WHY NOW?

When recently discussing our company mission with a well-known investor he asked one wise and Buddha-like question in its simplicity: “why now?”

While I had immediate business answers which I’ve shared below, I continue to ponder the question. The entrepreneur always says “why not now” and presses forward, however today is only a droplet of water in a waterfall of time. Why should anything special happen NOW and not tomorrow? Why hasn’t it already happened?

I haven’t found the answer to the deeper question, but now is the time to continue to grow CREXi, an online CRE platform connecting brokers with buyers and simplifying the often slow and clunky real estate transaction process using cutting edge technology. Here’s why (now):

  • There is a large demographic and generational sea-change occurring in CRE. Brokers, buyers and investors who are accustomed to and demand technology in their everyday-lives are replacing their predecessors. We are witnessing unprecedented industry wide tech-adoption. The demand for the tools exists, but many of the tools have not yet been created;
  • Most of the marketplaces that do exist are ill-suited to handle the changing demands of the market. Many were designed in the 90s or 2000s and have only slowly evolved. Complacent with their early success, many have not kept up with most technological advances and in many ways are people-heavy real estate firms more than tech firms. Most current platforms are satisfying today’s demand with yesterday’s product;
  • Incumbent fee models are widely disliked and perceived at best as necessary-evils. Much like the taxi industry, the service should be better and the costs should be lower. We believe tech and resulting transparency should empower buyers and lower their costs. Sellers should also benefit as buyers can now use their buying power to pay them and not transaction fees. Sellers also benefit from increased liquidity (“liquidity equals value” – Sam Zell);
  • Users want to help design and control their process in conjunction with market forces. Netflix and Amazon users want to promote content with their ratings and feedback. Wikipedia users create and regulate content. Uber does not tell drivers where they should drive, the market does. Brokers want to design and manage their own process and react to market forces with data and assistance from the service provider, but limited interference and friction;
  • The market cycle and overall economy is changing and change will fuel evolution. Value and demand shifts will bring demand for new tools with wider reach as market conditions will likely make deals harder to execute. Conduits connecting brokers with out-of-market buyers are needed. Assuming some distress emerges, lenders and servicers will continue to be early adopters and use online marketplaces to promote transparency and liquidity. Our platform is designed in-part with this in mind (lenders being the only non-brokers we will engage with).

NOW is the time to connect with CREXi and find out how we can help you do more deals, and reduce your professional expenses either as a buyer or broker while speeding up your transaction cycle and making your work-flow more efficient.

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.

Short & Sweet With No Fluff

Posted: January 4, 2017 by Eli Randel, Director of Business Development

SHORT & SWEET WITH NO FLUFF

No, that is not my order at Starbuck’s or my match.com header, this week’s blog is meant to be short, sweet, and sans any company fluff about why you should visit us at CREXi.com (although you should).

Having grown up and spent my whole career in the commercial real estate industry, I wanted to share some concise thoughts on why I love the industry and asset class:

  1. Low individual barriers to entry. Real estate investing requires no formal education or licensing requirements and while some areas of the business can be incredibly sophisticated, many concepts are very simplistic and intuitive. The result is a colorful and entrepreneurial culture full of unique personalities and personal stories.
  1. Diverse skill sets. Within one day you can exercise your finance chops and underwrite a complicated deal, exercise your marketing muscle and promote your newest project, or put your salesman hat on to win a new tenant. There are a broad set of skills which drive the industry;
  1. Instinct and intuition. While there are many sophisticated nuances, many of the concepts in CRE are intuitive. We all live somewhere. We all shop somewhere. These are not foreign concepts. Recognize that there aren’t enough apartments for rent in your area? Buy or develop an apartment building to capitalize.
  1. Control. Some of us don’t like the idea that unless we are an activist investor we can’t control the value of our equities investments (stocks). Further, the value is at the mercy of someone else’s control. What if the CEO gets caught in a scandal or retires sooner than thought? Most CRE professionals can still directly (attempt to) add-value to their investment or business.
  1. Real estate is a hard asset. Some people (myself included) don’t have the wiring to blindly trust an investment that can only be seen as numbers on a computer screen. Real estate is a real tangible asset you can drive by and touch.
  1. They aren’t making any more of it. I hesitated to include this as I believe this idea can sometimes be a trap. This notion does not mean values always rise and I think it’s underestimated how much untouched land there is. Additionally, technology has blurred the lines of physical and virtual space. However, the fact remains, the population continues to grow while land availability continues to decrease.
  1. Use of debt. Real estate is financeable whereas financing bonds or equities investments is a tricky business. Debt allows investors to lever returns, do more with less, and creates other industry opportunities (lender, servicer, appraiser).
  1. Other people’s money. The use of other people’s money (OPM) is an important component of the industry. Friends and family or institutional capital investors are always looking for avenues where they can find returns and are willing to pay fees and promoted interests to those who can access those investments. This allows investors to further lever returns and/or play in a greater arena than they otherwise could.
  1. It’s fun. For the restless like myself, it’s an industry that often revolves around meetings, looking at properties, driving, or getting a drink with other professionals. It’s a people industry that often puts you on the move as opposed to chained to your desk.

Tell me what I missed or share your thoughts @ eli@crexi.com or 305.331.2881.

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.