CCIM Feature

Big League Deals

CCIMs hit a few out of the park this year.

Commercial real estate transactions are on the upswing in 2014. About 54 percent of CCIM Institute members report completing deals in 2014 than in the previous year, according to the 2Q14 CCIM Quarterly Market Trends report. And deals are getting bigger. In the past 12 months alone, CCIMs reported more than 20 deals of $30 million or more, comprising more than $1.5 billion, spanning all property and market types.

What’s the secret behind closing these major transactions? “Hitting singles and doubles on a consistent basis can afford you the opportunity to swing for the fences,” says T. Sean Lance, CCIM, of Vertica Partners in Tampa, Fla. While these types of deals pose unique challenges, they are not out of reach of CCIMs.

2014’s Biggest Deals

Dean Saunders, CCIM
Coldwell Banker Commercial Saunders Real Estate
Lakeland, Fla.
$565 million land purchase

Jill K. Rasmussen, CCIM
The Davis Group
Minneapolis
$131 million build-to-suit lease
Richard Egitto, CCIM
Inverness Properties
Englewood, Colo.
$81 million office lease

T. Sean Lance, CCIM
Vertica Partners
Tampa, Fla.
$54.5 million multifamily sale

Eric Tompkins, CCIM
CBRE
San Diego
$54.5 million office purchase

Brett A. Sherman, CCIM
Angel Commercial LLC
Southport, Conn.
$54.2 million retail sale
Christopher Caison, CCIM
Grandbridge Real Estate Capital
Charlotte, N.C.
$53 million financing
Duke A. Suwyn, CCIM
John J. Kuiper, CCIM
Colliers International
Grand Rapids, Mich.
Stanley J. Wisinski, CCIM
NAI Wisinski
Grand Rapids, Mich.
$46.7 million industrial lease
Peter P. Hegg, CCIM
Paul O. Hegg, CCIM
Hegg Cos.
Sioux Fall, S.D.
$44 million financing
Steven Medwin, CCIM
Jones Lang LaSalle
Miami
$42 million office purchase

Big Deal Mojo

Like all commercial real estate deals, expertise and relationships are essential, along with hard work and experience, says Jill Rasmussen, CCIM, of The Davis Group in Minneapolis. Rasmussen and two partners represented the National Marrow Donor Program in the 15-year, $131 million lease of a 237,500-square-foot build-to-suit development in Minneapolis from United Properties. “Focus on a market niche and be the expert,” says Rasmussen, who has established herself as a corporate office and healthcare specialist.

Using his multifamily and development expertise, Lance and a partner negotiated the $54.5 million sale of a 605-unit multifamily portfolio in Florida from a Mid-Atlantic investment group to Preston Giuliano Capital Partners. Lance was with NAI Tampa Bay at the time of the transaction. The deal involved a fractured condominium portfolio across three different properties. “Analyzing other similar deals and understanding where market cycles are at with different asset classes is critical to closing big deals,” he says.

“Doing large deals is only marginally harder than small deals if you have the right team surrounding you,” says Richard Egitto, CCIM, of Inverness Properties in Englewood, Colo. Egitto represented Denver United LLC in the 15-year, $81 million lease of 161,218 sf of office space in Lone Tree, Colo., to tw telecom. Egitto credits his relationship with his long-term client in helping to close the deal. He sold the client the building more than a decade ago and has played several roles with it ever since. “The details” pose the greatest challenge, Egitto says. “These types of deals are very different than standard lease negotiations. All aspects have to be handled with the utmost care.”

Dean Saunders, CCIM, of Coldwell Banker Commercial Saunders Real Estate in Lakeland, Fla., unknowingly initiated a large deal by gifting his own market report to an old friend looking for large tracts of Florida land. Saunders and a partner went on to represent AgReserves in the $565 million purchase of 382,834 acres of timberland in the Florida Panhandle from the St. Joe Co. The deal made The Church of Jesus Christ of Latter-day Saints, which owns the purchasing company, the largest land owner in Florida. Saunders credits his success with big deals to being confident in his expertise. “Don’t be afraid to let people know that you know your stuff,” he says.

It’s also important to add value: Know the “nuances of the market and where a property fits in,” says Duke Suwyn, CCIM, of Colliers International in Grand Rapids, Mich., who along with John J. Kuiper, CCIM, also of Colliers International, represented Franklin Partners LLC in the 15-year, more than $46.7 million lease of an 885,781-sf industrial property in Grand Rapids. Stanley J. Wisinski, CCIM, of NAI Wisinski in Grand Rapids represented the lessee.

Demonstrate persistence and tenacity along with full comprehension of a client’s needs, says Brett Sherman, CCIM, of Angel Commercial LLC in Southport, Conn. Sherman and a partner represented the Kowalski family in the more than $54.2 million sale of the 90,000-sf Village Center retail property in Westport, Conn., to Equity One. “Truly understand the role you play in the transaction,” Sherman says. “I like to say the broker is like the quarterback in the deal.”

Market Forces at Work

The improving economy is adding some much needed fuel to the fire for completing these large transactions. “There is a tremendous amount of equity in the market right now and the preference is to deploy it in larger amounts over fewer transactions,” Lance says.

Many CCIMs also cite limited supply as another factor contributing to clients willing to pay more for properties. But it’s a double-edged sword. “The lack of inventory is making it very difficult to find exactly what a client needs,” Wisinski says. However, it’s not stopping investors from looking to diversify their portfolios.

Build-to-suit office development is also gaining momentum according to Egitto. “Capital markets are hitting on all cylinders, and the rush to get leases signed, buildings built and sold to developers, and sellers to capitalize is as strong as has been since the mid-2000s,” he says. In addition, many companies are striving for space efficiency and pushing for increased build-to-suit developments, says Rasmussen.

Big Deal Advice

What do these experts suggest for other CCIMs interested in developing and closing big deals in their markets?

Make your client a top priority. “Put the client first at all costs,” says Sherman. Excellent customer service is essential in building strong relationships with clients to get deals done. “I try to put myself in my client’s shoes and always keep in mind what is ultimately best for them in all aspects of the deal,” adds Wisinski.

Take your time. “Big deals happen at the crossroads of experience, patience, and expertise,” says Lance. “Big deals have many moving parts and require more time,” adds Wisinski. “Each piece is extremely important.”

Don’t forget the “little deals.” Big deals will come but they don’t come right away, according to Saunders. “You still need the certainty of smaller deals to last a long time in the business,” says Egitto. “Stick with your clients: As they do bigger deals so will you,” he adds.

Engage with your peers and professional affiliations. It’s important to remember the resources already available to you. “As CCIMs, we set the bar for each other. The collaborative nature of the Institute — and the people who are a part of it — make us all better,” Saunders says. “I would not be who I am today without my affiliations like CCIM.”

It’s the CCIM designation that binds these deal makers together. “The level of sophistication in larger deals requires the same professional skills and concepts I learned in obtaining my CCIM designation,” Lance says.

So for CCIMs, moving up to the majors may be just a matter of refining your approach and looking for greater challenges. As Saunders notes: “When you want to get better at your sport, you play against the stronger teams.”

Stephen Rangel is communications coordinator for the CCIM Institute.

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