“What are the most important contributions to the practice of commercial real estate that the CCIM Institute has made since its founding?”
When CCIMs were asked this question, their answers were remarkably similar, whether they received the designation in the last 10 years or nearly 40 years ago. The power of the designation is in the education, the networking, and ultimately, the success it brings its members - whether they have pin number 826 or 10,846.
1. Industry Standardization
More than any other factor, the creation of a common language for commercial real estate is an important theme heard from CCIMs. It brought clarity to the field.
Before CCIM training, commercial real estate did not incorporate financial and market analysis principles. “In some parts of the country, cash flow meant the same thing as net income,” says Ralph Varnum, CCIM, founding principal of Varnum Armstrong Deeter in Overland Park, Kan. Varnum is co-chair of the Institute's 50th anniversary committee and was 1985 Institute president.
“Today, if the California owner tells an Illinois banker what his net operating income is, both parties understand just what is meant by the term,” Varnum says. “If a Texas broker has a listing in Austin and a Minneapolis broker represents a REIT interested in purchasing, all parties are on the same page when they are discussing a 7.65 percent cap rate.”
The result of this common language is an “increased level of professionalism,” says Patricia Lynn, CCIM, CDEI, principal at LYNNK in San Francisco. “It's also provided access to commercial real estate for many residential practitioners who wanted to transition to commercial real estate, but didn't know where to obtain the common language.”
While universities offered real estate programs before the Institute, “It took organizations like CCIM to standardize terminology, procedures, and business models,” says Steve Cannariato, CCIM, MET, CDEI, managing broker of Hawkins & Cannariato in Boise, Idaho. “That's one of the key contributions CCIM has made to our industry.”
2. Quality Education
With the education bringing that common language, it also brought practical experience through real-world examples and the experience of those who teach it.
“This gives students a much greater understanding of and focus on the practical applications of the concepts given,” says Craig Blorstad, CCIM, CPA, CFO of WS Property Group in Bloomington, Ind.
What CCIM education content has changed the industry? “I would say that the Institute has promoted the use of the internal rate of return as a more meaningful single-number analysis of a property,” says Lou Nimkoff, CCIM, CPM, commercial real estate adviser with Brio Real Estate in Winter Park, Fla. “Until the Institute really started pushing commercial real estate education, few people understood it, and even fewer used it. Being able to understand what those numbers really mean helped practitioners show a potential investor what their real return would be.”
Another key concept is standardization of the net operating income calculation through the Annual Property Operating Data, according to Blorstad. “Calculating NOI is critical when reviewing debt underwriting or possible appraisal issues,” he says. “Many investors may not learn the importance of this until reversion, when the next investor does buy on NOI.”
Key to its education mission, the Institute's relationship with the National Association of Realtors has helped it reach a much broader audience. “Through its affiliation with NAR, the Institute has been able to reach out to the (now) 1.25 million Realtors and teach them that commercial is different from residential,” Nimkoff says. “I'm amazed at the number of residential practitioners who think that making a deal on a commercial property is basically the same thing.”
3. Greater Success
First and foremost, getting the designation is about doing business. Being a CCIM has brought its members confidence, success, and leadership in the industry.
“The impact (of the designation) was much more professionalism in the commercial real estate arena, which allowed us to really gain more business,” says Dan Page, CCIM, commercial real estate broker with Michael Saunders & Company in Sarasota, Fla. Page was the 1997 Institute president and spent 30 years as an instructor.
Success through education brings many benefits, Blorstad says. “CCIM skills can give the holder extreme confidence in the marketplace,” he says. “Competence and a thorough application of taught techniques provides a foundation for attracting and retaining investors.”
One member tells of the importance of applying key concepts accurately. “The education almost made me lose a deal basically,” says Charlie Mack, CCIM, owner and broker with Mack Realty in Las Vegas. “Utilizing tools from CI 101, I discovered that a property I was selling to a client had a very low capitalization rate. I brought it to the investor's attention because it could have messed up this whole deal.
“The property had other benefits to the investors. By incorporating my CCIM education, I saw the bigger picture instead of just focusing on the education itself. The education makes us all more professional and proficient, which is a major benefit for our clients.”
The designation also has given many members an opportunity to lead. “Beginning at the chapter level, then progressing through regional and national levels, the Institute provides an opportunity for people to get involved in leadership and receive guidance,” says Donald S. Huddleston, CCIM, managing broker at Village Square Realty in Spokane, Wash. “Many designees have grown through those opportunities to enhance themselves personally and professionally.”
4. Network & Friendships
The Institute has created a strong network of professionals who share the same background and turn to each other for referrals and to work together on transactions. Often these relationships were created in the very beginning.
“Many of the bonds developed in early classes are long-term,” says Bob Rosenberg, CCIM, GRI, CEO of Inve$tnet in Sacramento, Calif. “There are countless examples of people who still network with people they met in classes going through the program 25 or 30 years ago or more.”
The beauty of the designation, says Nick Miner, CCIM, senior vice president of ORION Investment Real Estate in Scottsdale, Ariz., is in “being able to pick up the phone and call someone I've met and immediately get the warm conversation, which is meaningful. There's that credibility component and unwritten expectation among those with the designation to be as responsive as you possibly can when another CCIM reaches out to you.”
That confidence in the network spans across to corporate real estate professionals. “The first job I had was as an acquisitions officer, tasked with finding commercial properties throughout the United States that met investment criteria for our company,” says Tom Nordstrom, CCIM, GRI, retired from AEGON based in Cedar Rapids, Iowa, and a member of the CCIM Foundation Board of Directors. “I focused pretty much exclusively on CCIMs. We would speak the same language. When I would find a CCIM to purchase property, it was a very symbiotic relationship.”
Key to continued networking has been the opportunity to feed the network, according to Nimkoff. “Chapters are important because at the end of the day, real estate is local,” he says.
Rosenberg says that local and regional chapter events, as well as national conferences, have increased the experience, business, and success of CCIM members.
“Thanks in no small part to the Institute's designation promotion over the years and the growth of CCIM chapters, CCIMs are afforded the opportunity to close more transactions and have higher incomes than those commercial practitioners who have not earned the designation,” Mack says.
In addition to the networking, members report forming lifelong friendships with other CCIMs across the country.
“I remember meeting David Bickell, who was a brand-new designee, and grading resumes with him in San Antonio,” Nordstrom says. “We found we had a lot of common interests, and it's developed into a nice relationship.”
Those friendships are created through a common bond, according to Miner. “Among the CCIM family, we all know what it took to get the pin,” he says. “It creates a sense of place and camaraderie among those that have achieved the designation. Locally, I was blessed having Tim Hatlestad, CCIM, who is a past president of the Institute, as a mentor who helped me to get involved on a national level. He introduced me to people who did what I did locally.
“Seeing similar designees in other markets and knowing that we all went through the same program was the connection point. We were able to develop those relationships over the years at local and national events. At the end of the day, that's really what commercial real estate is about - the people.”
The incorporation of technology into CCIM education has had a profound impact on its education and its members' ability to conduct business.
One example is the Site To Do Business. “STDB is 24/7 accessible, a dashboard connecting information, data, services, and know-how with a frame for updating, improving, and expanding as technology changes,” Rosenberg says.
The Institute also puts data at its members' fingertips. “Data sets on business, aerials, and patterns all put our people out in front of the industry at one time,” Rosenberg says. “Our training and user groups have had a wide-ranging impact upon the commercial real estate industry and enhanced the quality and value of our presentations and service.”