Big-ticket transactions are tougher to find in small commercial real estate markets. As a result, it can be more difficult for CCIM candidate members to reach the portfolio submission requirements to earn the CCIM designation.
However, many CCIM designees have prevailed despite small-market challenges. Here they share their tips for market - and mind - expansion with those who find themselves in similar situations.
Expand Your Market and Asset Class Specialization. That's what Beau Beery, CCIM, in Gainesville, Fla., advises for greater success. While he has completed deals in office, retail, industrial, and multifamily, Beery gravitated toward multifamily. Three years ago, he made multifamily his specialty and expanded his territory to all of north Florida, exponentially growing his business. His four other team members focus on the other commercial real estate sectors.
Pay Attention to the Details and Become the Expert. In tertiary markets, commercial real estate professionals often have to understand every aspect of the commercial marketplace. The details really matter to complete successful deals. “Understanding all aspects of a smaller market is more challenging than in big markets,” says Larry Kuchefski, CCIM, managing broker at Coldwell Banker Commercial Devonshire Realty in Champaign, Ill. “I take calls for market information from real estate appraisers every day because it's not available anywhere else.”
Develop Creative Solutions. When a transaction almost collapsed, Ron Welebny had to think quickly, applying skills he had just learned in the CI 102 course from instructor Gary Ralston, CCIM. A qualifying broker at Rossman Commercial Realty in Cape Coral, Fla., Welebny had put together a deal for a multi-use industrial and storage building. The buyer's contract had been signed, sealed, and almost delivered when the building was raided: A Miami-based crime ring had set up a chop shop involving 30 percent of the tenants. Overnight, the previous 90 percent occupancy was history.
Welebny did a quick supply and demand analysis and found a shortage of that type of space in the trade area. “We repackaged the entire transaction to replace the bank loan with seller financing,” he says. The seller agreed to hold the note with one critical difference - no payments for the first six months. “The cap rate is actually higher than with the place full under the terms that we had originally crafted. So the gamble is really producing replacement tenants in that six months.” Already two separate tenants already have signed up for one-third of the vacant space.
Dominate Your Market Niche. As the only full-time commercial real estate broker working in Danville, Ill., a community of 35,000, Kuchefski has also moved into development.
“Through both buying, selling, and development work in Danville, I often get other investors interested in our city,” he says. “It's working, and I stay busy and have a great sense of accomplishment.”
Help Your Community with New Businesses and Job Creation. In the tighter lending environment, Russell Webb, CCIM, expanded his business from leasing and land sales to a new niche to set him apart from other commercial real estate professionals.
“On office and industrial deals, mortgage companies will give loans to owner-occupants with good credit,” says Webb, vice president at Silver Oak Commercial Realty in Flower Mound, Texas. “I know bankers I can introduce to prospective buyers who can persuade them of the value of owning versus leasing.”
By implementing these suggestions, those seeking the CCIM designation or otherwise working in small communities can fulfill the portfolio requirements more easily.