The Equalizer
Throughout his four decades in commercial real estate, Henry H. Hanna, CCIM, SIOR, has experienced strong and weak markets and learned how to analyze and solve many real estate conundrums. Currently, he spearheads the Mid-Atlantic team for Sperry Van Ness Asset Recovery, helping local, regional, and national banks and their borrowers to strengthen their real estate portfolios as the economy recovers.
For his specialty in industrial sales, Hanna has worked with national and international companies, including firms from Germany, Italy, and Belgium, and sold a variety of pharmaceutical, defense, high-tech, manufacturing, modular home, and boatbuilding companies. Additionally, he has been actively involved in the government arena to develop commercial real estate opportunities.
CIRE: What major trends are you seeing in the Baltimore industrial market right now?
Hanna: My market is the Eastern Shore of Maryland and southern Delaware. These counties are on the Delmarva Peninsula between the Chesapeake Bay and the Atlantic.
Historically this region is late in experiencing recessions and slower to recover. Healthcare, educational institutions, and several diversified manufacturers support a strong agricultural base, while retirement and second-home communities provide a solid foundation for construction jobs.
Early in the Great Recession, these sectors remained vibrant. Many defense contractors were winding up long-term manufacturing contracts at their plants. Retirement and second-home developers initially slowed their operations, which eventually came to a standstill.
Most of those developments had bank financing in place. However as the recession progressed, it became difficult to obtain new financing. In 2015, limited new financing is available, and several defense contractors have converted to new commercial contracts, although on a reduced scale.
This region has several manufacturing plants ranging from 50,000 to 200,000 square feet, which closed due to industry consolidation. For example, the recession led to a collapse of the pleasure boating industry, resulting in about 400,000 sf of vacant warehouse space.
These buildings have now been subdivided for smaller users at $10 to $25 psf for industries beginning to expand in 2015, including modular construction for poultry houses, medical supply distribution, and public warehousing. New growth is also coming in the production of food and beverages and their packaging.
There is also strong future interest in unmanned systems and aerospace companies at NASA's Wallops Flight Facility. These companies are resupplying the International Space Station with unmanned cargo ships and are involved in the development and testing of unmanned aircraft.
CIRE: Do those local trends correspond with the national industrial trends or do you see something else happening nationally?
Hanna: Our region is just seeing the bottom of pricing with many sellers ready to accept reduced pricing and move on to new ventures. Financing from local and regional banks is now below 5 percent with economic development agencies helping to offset down payment requirements to create local jobs.
CIRE: What types of projects have you been working on recently?
Hanna: Sperry Van Ness is seeing strong growth in energy, food, and beverage sectors; medical and pharmaceutical industries; and poultry companies. Our firm is involved in expanding production facilities and improving logistics for these areas of growth. Additionally, Maryland is promoting alternative energy plants.
CIRE: You've been active with state and local economic development organizations. How does that affect your commercial real estate business?
Hanna: Both Maryland and Delaware are great partners in working with Sperry Van Ness to attract new industries and to provide attractive financing. We work with strong, creative economic development directors in each county to leverage the state programs to create new jobs.
CIRE: How has your CCIM designation training and continuing education through CCIM enhanced your ability to analyze the market dynamics of the industrial market?
Hanna: Our office has seven brokers who have earned the CCIM designation and three more CCIM candidates who are working on gaining the designation. I know that gives us all the best educational foundation and strongest network of contacts for every client assignment. No matter what area I look to get professional assistance, I can find a CCIM to help me with the best possible advice for the specific assignment.
CIRE: What has been the biggest advantage the CCIM designation has offered you in your career?
Hanna: During the recession in the 1980s, I knew the CCIM education program would assist me and help my clients to succeed. Now three decades later, CCIM education helps keep me informed in our ever-changing and competitive marketplace.
CIRE: You've had a long, successful career in commercial brokerage and won several top producer awards. What advice would you give new brokers on creating a successful career?
Hanna: Select a specialty, get a solid education in that specialty, and keep learning. New brokers should join a professional group like the CCIM Institute and become involved locally and nationally. They will earn great dividends by improving their skills on behalf of their clients, and their involvement will help to ensure their success in the profession.
Sara S. Patterson is senior editor at Commercial Investment Real Estate.