CCIM 50th Anniversary

CCIM Secret Sauce

CCIM education contributed to elevating the entire commercial real estate profession.

What's the secret? In its 50 years, how did the CCIM Institute grow into a 13,000-member-strong organization and become the leader in commercial real estate education?

It takes seasoned professionals who are dedicated to teaching the courses and working to develop new content, as well as continually bringing the courses up-to-date. It takes an openness to embracing new technology and new techniques. It takes the ability to adapt to an ever-changing market.

Hundreds of thousands of students have taken CCIM courses, which prepared them to be successful in their business. “CCIM training has educated all types of commercial real estate professionals, including brokers, developers, investors, attorneys, institutional reps, lenders, and appraisers, during our first 50 years,” says Ralph Varnum, CCIM, 1985 Institute president and founding principal of Varnum Armstrong Deeter LLC, in Overland Park, Kan. “This training advanced the entire industry together by using a common language and common ways to look at commercial real estate as an investment.”

Walmart, Ernst & Young, PwC, Bank of America, NAI Global, Transwestern, and the U.S. Navy are among the large organizations that have sent commercial real estate professionals to CCIM courses. CCIMs work at TIAA, the U.S. Department of State, and United Technologies Corp.

Adapting to Change

While the commercial real estate industry has embraced the versatility of roles for its practitioners, adaptability to changing business environments is critical. The profession is fairly new.

“In the first 25 years after World War II, the U.S. experienced a tremendous expansion in its population and the need for all types of real estate to meet the pent-up demand,” Varnum says.  “By the end of the 1960s, tremendous new opportunities to develop and own real estate were created, and more and more investors were taking advantage of the chance to own commercial and residential investment real estate.”

Those new opportunities brought a need for education. “In the late 1960s, a commercial real estate affiliate of the National Association of Realtors - then called the Commercial Division of the Realtors National Marketing Institute - decided to address the opportunities and the confusion in the commercial real estate field,” Varnum says. 

Those first courses, says Jim H. Dunn, CCIM, CPM, president of Keystone Realty Services in Nashville, Tenn., “brought us out of the dark ages into the current time when we were teaching topics such as the gross rent multiplier. CCIM courses taught how to analyze a property and what information you needed, and where and how to get it. Our consultant from the educational field, Steve Messner at the University of Connecticut, Bob Ward, CCIM, and Vic Lyon, CCIM, and some others were instrumental in applying the internal rate of return and the time value of money to real estate analysis.”

With universities offering their own real estate education, why CCIM? “Although I had a CPA certificate and had good financial and technical knowledge, I wanted to better understand the language of the real estate brokerage side, which I had heard the CCIM program had the capability to do,” says Ronald L. Myles, CCIM, CPA, GRI, a broker in Denver, a former CCIM instructor, and 1986 Institute president.

What made the CCIM courses different from university courses? Practitioners. From the start, CCIM courses used seasoned commercial real estate practitioners to teach its courses, while consulting with those in the education field.

“What the students couldn't find anywhere else in the marketplace was courses taught by practitioners,” says Dunn, who was designated in 1974. “I have always thought that's what made the courses what they came to be. It was one of the things that attracted me.” 

CCIM Institute also offered technology not found elsewhere. Designees have long heard the stories about the cumbersome Ellwood tables. Eager to embrace new technology, in the late 1970s the Institute introduced the hand-held calculator to the courses. But these, too, had a period of adjustment, says Dunn, who was a CCIM instructor for 20 years.

“There was a very significant, sometimes heated argument as to whether they should be used in the classroom for fear the students wouldn't learn the process,” Dunn says. Fueled by the enthusiasm of members and 1997 Institute president Palmer Berge, CCIM, the hand-held calculator was incorporated into the courses in the late 1970s.

“The first instructor up Monday morning had at least 25 percent of the class just tearing the cellophane off the calculator, which was difficult because at that point we had to teach them how to use the calculator as well as what it meant,” Dunn says. “But once they learned how to use them, the calculations they had to make went faster and, in all probability, were more accurate. From day one the financial calculators were programmed to calculate the IRR, so all you had to do was make the entries, and that just saved a lot of time.”

Changing Industry Dynamics

The 1980s saw a very different climate for the commercial real estate industry. After a boom in commercial construction activity fueled in part by the Economic Recovery Act of 1981, the end of the decade brought a market crash due to overbuilding in many markets.

During the early 1990s, the number of savings and loan institutions that failed and the volume of their losses hit record numbers.

“The market did collapse substantially,” says Mark Lee Levine, CCIM, CIPS, MAI, professor at the University of Denver in Denver. “CCIMs were right on top of it. We had to survive through these changes for a number of years and make changes.”

This was further complicated by tax law changes. “Subsequent to the 1986 tax act, we had rampant inflation, high interest rates, and many foreclosures,” says Patricia Lynn, CCIM, CDEI, a senior instructor and principal at LYNNK in San Francisco. “1989 saw the creation of the Resolution Trust Corporation, a U.S. government-owned asset management company, which was selling off properties en masse. Auctions became a popular disposition vehicle in the early 1990s.”

The Institute was quick to respond. “We saw a need for dealing with a different kind of client and a different disposition approach,” Lynn says. “We brought in experts, as well as used some of our own people, to develop a course that helped our clientele understand how to work with regulatory agencies, such as the RTC and the FDIC. Since we were selling large blocks of property as opposed to individual one-off properties, a nontraditional approach needed to be deployed. That was either the auction or the sealed bid sale.”

But the Institute had more changes in store - beginning in the early 1980s with the introduction of computers and investment analysis software into the classroom. “Technology became another reason why people flocked to the courses. We were ahead of our time at that point,” says Myles, who worked on the education committee that embraced the investment analysis software that Palmer Berge, CCIM, had developed using Hewlett-Packard's equipment.

CCIM Institute very early on adopted computers, says Ralph Spencer, CCIM, SIOR, principal with Innovative Learning LLC, in Richmond, Va., and a senior instructor. Bob Ward, CCIM, developed the Excel workbooks for CCIM courses.  In the early 1990s, people started bringing their own computers to the classes.

“Excel had a profound impact on our courses. Instead of memorizing keystrokes, you could use the Excel workbooks to analyze on the fly,” says Joseph Larkin, CCIM, MCR, SIOR, a senior instructor and CEO of First Realty in Denver. “The CCIM Excel workbooks brought our curriculum to a very high level. The student now has the ability to change economic variables with ease and can evaluate the impact in seconds. In the past, it has taken hours to recalculate the impact of the change.”

An example at the forefront in today's economy pertains to what would happen to the analysis if tax rates were reduced. Now this can be completed with ease, according to Larkin. “That's an incredibly powerful tool for our students,” he says.

Transitioning the investment analysis materials to the computers “was a milestone,” Spencer says. “Those changes enabled a wider, deeper level of analysis and understanding of the basic cash flow model.  They also enabled us to provide additional applications for user analysis - cost of occupancy, lease analysis, lease versus own analysis, and sale leaseback analysis. They distanced CCIM education from most of the industry and enabled us to provide students with a very high competence level in decision making.”

The addition to the curriculum for the user side of the business was driven in large part by Victor Lyon, CCIM, 1972 Institute president, according to Lynn. “No one had viewed commercial real estate from the perspective of the user,” she says. “Vic saw a huge market there and worked to develop what we called a user track. This was the first time we recognized the cost of occupancy as educational content. It was a shift from wearing the investor hat to putting on the user hat and considering their perspective - that of cost of occupancy as opposed to return on investment.”

This transition to include the user side, Spencer says, was important because there are many more transactions compared to investment brokerage. “That enabled CCIM, in part, to be recognized as the most respected designation in the industry, particularly on the brokerage side,” he says. “CCIM took user occupancy analysis to a much more technical and higher level.”

This was an area that universities weren't teaching at the time. “We have continued to make sure that we are the leader in user decision making,” says Steve Cannariato, CCIM, MET, CDEI, a senior instructor and managing broker of Hawkins & Cannariato in Boise, Idaho. “That's evidenced by those who attend, from tenant representatives to the General Services Administration to corporate real estate departments. We do an excellent job of teaching comparative lease analysis, lease versus own analysis, and sale leaseback analysis, subleases, and buyouts.”

Advancing to Be Relevant

Staying relevant and current in education is an ongoing challenge. In 2001, the Institute established a new committee to meet that challenge, the Body of Knowledge Committee.

“The establishment of the BOK Committee was a strategic move by the Institute to ensure that its curriculum was comprehensive, robust, and current to things going on in the marketplace,” Cannariato says. “BOK was charged with identifying core concepts, practitioner competencies, and relevant content to make sure that we were at the cutting edge.”

Part of staying cutting-edge is to continuously evaluate the tools that practitioners are using or need to use. The Institute's market analysis course was updated during this time to incorporate many of those technologies.

“Over the past 10 years, there has been an acceleration of technology on many fronts,” says Gary M. Ralston, CCIM, SIOR, CPM, a senior instructor and managing partner of Coldwell Banker Commercial Saunders Ralston Dantzler Realty in Lakeland, Fla.

Geographic information system technology was emerging as a practical way to understand the market demand associated with specific properties and geographies. “CCIM education included the analysis of geographies associated with properties with a view to articulating demand,” Ralston adds. “The gap analysis model - demand less supply equals gap - was demonstrated as a practical application with a view to understanding how to maximize the value of properties.”

While Site To Do Business was developed in 2000, CCIM began incorporating STDB as online tools for financial, market, spatial, and competitive analysis in 2006. This was rapidly integrated into CI 102, the market analysis course.

“STDB has had a huge impact on the industry, using demographic and psychographic data to make a real estate decision,” Larkin says. “Normally, a developer would complete market analysis to determine if there is a gap in the market for a project first, and that's where STDB comes into play. Very few countries in the world have access to the granular level of demographic data and market information as we do in the United States. It's unique and a huge benefit to our members.”

In the past 10 years, “there was an increased focus on  on-site analysis using mapping tools,” Ralston says. “And CCIM was developing tools for articulating the population and associated characteristics of the market and trade areas associated with commercial real estate.”

Creating Educational Flexibility

The Institute was an early force in alternative delivery methods. Dedicating four days out of the office to a traditional class can be difficult. Today, students can take the core courses in one of four formats: classroom, blended, online instructor-led, and online self-paced.

“CCIM has been an innovator in alternative course delivery methodologies,” Cannariato says. “One of the outcomes of the blended learning initiatives is an online learning library that can also be accessed by members to refresh their skills. We created the assets for the blended learning course and repurposed them for the general good of the CCIM community, which is accessible to our members online.”

In 2007, the Institute launched the Robert L. Ward Center for elective content. Named for the renowned 1978 Institute president and senior instructor, the Ward Center offers specialized courses in topics such as negotiations, tax, splitting profits, financial investment, and business development.

“The Ward Center provides mostly short, online-delivered courses that provide state-of-the-art, up-to-the-minute educational opportunities for practitioners to refine and hone their skills,” Cannariato says.

Another addition is the Development Specialty Track program, which serves the markets that have experienced an increase in commercial real estate development. “The Development Specialty Track program provides commercial real estate developers, investors, and consultants with an understanding of the resources and business practices required for successful development projects,” Larkin says.

The unofficial CCIM motto is “come for the education and stay for the business,” Larkin says. Traditionally this has referred to the strength of the CCIM chapters, as well as the personal and professional relationships that members develop along the way. Today, that has been extended to the many educational offerings that go beyond the designation.

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Catherine Simpson Olson

Catherine Simpson Olson is a freelance editor and writer based in Chicago. 

CIRE Nov/Dec 2017 Issue Cover

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