CCIM Connections Continued
What CCIM Course Changed the Way You Do Business?
In the September/October issue of CIRE, CCIMs talk about the CCIM education course or concept that has meant the most to them. Here, other members continue that discussion.
By far, the course that has provided repeated and consistent rewards for me was Real Estate Investment Analysis. The information and concepts enabled me to engage in multifamily complex sales as well as every other investment vehicle such as warehousing and shopping centers. In one of the four outstanding courses, we were counseled to specialize. My area is a second-tier city, which means that I do have to deviate from such specialization from time to time and, certainly, in these bizarre times. However, I have never lost sight of the wise advice of one of my outstanding instructors. Without question, one of the numerous rewards which the CCIM designation has provided is the unbridled self-confidence that the training enables. As all designees know, the courses are demanding, but the rewards are infinite.
-- Margie Gordon, CCIM
The value of the CI 103 and CI 104 skills is almost indescribable. Having acquired this knowledge at the time an owner first approached our firm for assistance enabled us to provide analysis and recommendations in an extremely expedient manner that allowed a small, Redding, Calif.-based partnership to compete successfully with a very large, national corporation. My personal attendance at CI classes, my broker’s CI training, as well as efforts from the entire team enabled the owner to present itself as a knowledgeable and sophisticated manner. The irony is that I almost rescheduled the class and didn’t attend due to the time I anticipated that this transaction would involve!
-- Janice C. Cunningham, CCIM, CRE
CI 103 benefited me the most. As a tenant rep broker specializing in industrial properties, the lease vs. own analysis tools help me present a very professional presentation when comparing options.
-- Andy Wheeler, CCIM
I credit my first million-dollar transaction (1986) to a concept I learned in CI 103 that saved an otherwise dead deal. Basically, it was a tax incentive created by a “non-compete” fee that had no effect on the seller’s tax situation but enabled the buyer to expense a large deduction. Over the years, my focus has been on the tax strategies related to commercial real estate, many of which I learned in that course or through subsequent CCIM courses.
The thing that sets the CCIM courses apart is the awesome quality of the instructors who use their real life experience to show us how to use the courses’ concept in our day-to-day business.
-- Suzanne Scott, CCIM
I was fairly new in commercial real estate and had a client who had taken title on a tax deed for 65 acres for $ 42,000. He wanted to sell, but a decision was greatly influenced by his capital gains tax. To the rescue, I took the CCIM course on 1031 tax deferred exchanging. Returning to my client with a potential solution to sell, deferring his substantial capital gains, my client said, “Sounds good, but you need to run it by my tax attorney,” which I did. As he had never been involved, he was dismissive and said he could not recommend consideration of a 1031. I was so sure that this was an option that my client should consider that I made this offer to the attorney: I would pay for a study by the CCIM instructor who had taught the 1031 course. The attorney reluctantly agreed. Jack Pyle, CCIM, the instructor, did such a convincing job, the attorney reversed himself. I was given an apology and the attorney insisted that Pyle be at the closing. From this exercise I was convinced that the CCIM courses were what I needed to bring to my clients all options and to fend for myself with attorneys and CPAs.
-- Gary Sisler, CCIM
CI 102 focuses on market analysis and digging deeper into why a particular market would fit for a real estate project. That course changed the way I look at real estate and it is now the most important component when I work on a transaction. It is also amazing that even though it was the hardest class that I took as a student, I am a CCIM instructor who is teaching the course to students today.
I went into development because of CI 102. The course taught me how to recognize opportunity. I currently use it on my leasing assignments. I have a retail center that is anchored by a Pharmacy in La Vernia, Texas. I conducted a market analysis on the La Vernia market and determined that health and fitness was a market segment that was lacking in the area. It also fit well with the pharmacy-anchored retail center that had a local doctor already in place. My team reached out to health and fitness businesses both locally and nationally and eventually secured a national gym franchise to occupy our remaining space.
I use many of the course concepts in my day-to-day business. As a GSA tenant representation broker, I use the concept of defining a delineated area based on my client requirements, disaggregation of the local market, and identification of natural and logical barriers. As an investment broker, I use the concepts of demographics and psychographics to identify market segments that fit my client requirements and provide the most likely location for business success.
The CI 102 course teaches real estate professionals to know where real estate growth is going.
-- Alex Johnson, CCIM
In June 1984 I took my first class in the CCIM program. At that time CI 101 was called “Fundamentals of Real Estate Investment and Taxation.” I had been renovating houses for resale and wanted to get into the commercial side of real estate. What I consider my “big break” was presented in September 1985 in the form of a continuing education program called “How to Develop a Neighborhood Shopping Center.” It was taught by Bob Ward, CCIM, and Gary Hawkins, CCIM. The most important concept to be gained was return on investment. Other than all-cash deals, using “positive leverage” to create “positive cash flow” is essential to a good investment. If the project does not deliver an appropriate ROI for the risk involved, even with all the knowledge and the best research of the market, regardless of property type, “don’t do it.” The CCIM program is the epitome of investment real estate. The practical application that each instructor brings to the course is invaluable. I always recommend to college students and young people starting in real estate to get involved in the CCIM program. It is the best ROI for your money.
-- Van Corr, CCIM
All the courses made me think again about the analyses and techniques we were currently using or had used in the past when looking at a piece of property. As a commercial property investor and developer, the past few years were definitely challenging and taking the CCIM courses “rebooted” my thinking. CI 104 was a great course as it highlighted some financial analyses items that I immediately incorporated into our existing APODs. CI 102 seems straightforward enough, but I don't think many smaller investors are doing such extensive analyses. I will definitely incorporate a more detailed feasibility analysis next time I look at a property. I don't think a comparable professional education course exists for the commercial real estate industry. I highly recommend it to other industry colleagues!
-- June Paek Farahan, CCIM
My favorite CCIM course is “The Impact of Human Behavior on Commercial-Investment Decision Making,” which I took in 1987. By understanding “people aspects” and how to deal with them accordingly, a CCIM can just make the difference to either complete the transaction or fail to complete the transaction.
In one leasing transaction, upon finalizing the commercial lease when I represented both the landlord and the new tenant, the landlord took the ready-to-sign commercial lease to his attorney for review. The attorney, also a developer, told the new tenant that the rent would double from $6,500 monthly to $15,000 upon renewal at the end of five years, thinking a 10 percent return of the fair market value of the property, which, at that time, was about $1.5 million projected. The tenant then withdrew from the lease. Understanding the attorney/developer’s human behavior and the tenant’s attorney’s human behavior, I implemented all those concepts from CI 104 to save the leasing transaction. At the same time, another broker brought a purchase offer directly to the owner at a price of $1 million, interfering with my leasing transaction. I quickly did a lease vs. sale financial analysis for the owner that the owner decided not to sell but to complete the leasing.
CCIM courses provide a dynamic, practical, thorough understanding of today’s commercial investment real estate transactions.
-- Sam Fung, CCIM
My partner and I were in the middle of a negotiation on an office building. We were representing the seller. The buyer wanted the property, but we were $300,000 apart on the price and neither party would budge. We agreed to meet again with the buyer and his agent after we returned from our CI 101 class in Phoenix. In that class we learned how to evaluate property and how to do a 10-year cash flow projection, which is exactly what we did upon our return. We called the buyer’s agent and asked for a meeting and presented him with our 10-year cash flow projection, which demonstrated that his after-tax return met his purchase criteria. He studied the spreadsheet, and then said he wanted to review what we gave him with his CPA. After his CPA reviewed it and agreed with our projection, he met the $300,000 price and we closed the deal.
The commission from that one deal, which I am convinced was made possible only because of what we learned in that first CCIM class, paid for all my and my partners’ CCIM courses. Since that time, I’ve done that same analysis for every buyer I represent. I can only imagine how many times that has been the difference between closing the deal and not closing the deal. Without a doubt, this was the best investment I have ever made in my business.
-- David Buurma, CCIM
CI 101 is a class I use every day. I represent building owners and owner-occupants, helping them set up their financing through lenders. Many are first-time commercial buyers and have no idea how to estimate an annual debt service payment, which I do with the famous T-bar that I learned from Mac McClure, CCIM, who taught the 101 course in 2005 in Dallas. I also use the cash-flow chart and IRR to show prospective investors what kind of return they can expect out of a particular investment.
The CI 101 has stuck with me because it really drills into your head how the time value of money works whether you are working with a tenant, buyer, or building owner. This course has helped me close many transactions with owner-occupant clients who have to be “held by the hand” when it comes to reviewing their annual costs and debt service associated with a particular investment.
CCIM courses are set apart from other real estate classes because the skills you learn in your CI 101-104 are everyday applications you can use with your clients and prospects that ultimately help you close transactions!
-- Russell Webb, CCIM
As a broker who specializes in office leasing, I found CI 103 to be most beneficial. In my market, I am often met with the lease vs. own question from my clients. Many tenants feel that they would be better off not paying rent to a landlord and to be gaining equity in a property. CI 103 taught me that the correct way to answer this question is from a financial perspective based on either net present value or internal rate of return. I especially like the IRR method because it highlights the fact that real estate is simply a financial instrument, much like stocks, bonds, or the return one may achieve in their own business.
-- Chad Boddez, CCIM
I liked all the courses! CI 101 is where I met my future partners in the business. One was in Arizona, one was in California, and I was in Nebraska. After that class, it made me want to move to Phoenix. I still talk to my instructors (Steve Price, CCIM, and Todd Clarke, CCIM). They have a knack for getting you all fired up about continuing on in your coursework and obtaining the designation.
I like being able to show an owner/tenant/prospect real numbers that they can expect from a property in a way that is easy to understand and verify. I have not found any other education programs that are geared specifically for underwriting/analyzing commercial properties from the standpoint of acquisition/disposition/lease-up. The instructors are top notch and most of them know the “back of the napkin” approach to help you become more successful when you find yourself in a similar situation that the instructor was in.
-- Nicholas L. Miner, CCIM
I loved 101. It gave me my first look into the magic of the numbers and made me fall in love with both the investment side of this business and the CCIM Institute. After the course, I did a lease comparison analysis for a client and was able to show him that the deal was going to cost him an additional $25,000 over the term of the lease.
I can walk into any meeting and be confident I am providing the best financial advice for real estate transactions. What other programs provide that?
-- David Schnitzer, CCIM
CI 101 was my favorite course. Ralph Spencer taught it. I met a guy that sat at my table and ended up selling him a $6.8 million piece of land. I placed a portion of my commission aside and vowed to finish the CCIM program. As of today, I've never had a fellow CCIM not take my phone call or help answer a question. I've done deals via FedEx with CCIMs I've never met. That level of trust is just there. Additions to our CCIM membership, like the MailBridge system, have allowed me to meet and do deals with CCIMs all over the country. It's the single most valuable membership I possess.
Frank O'Connor, CCIM
My favorite CCIM course was the CI 105 course that I took in September of 1976. This course was the capstone course when we delivered five courses of six days each. It was similar to the CI 104 course in that it taught, via case study, practical advanced calculations and concepts of real estate analysis.
The specific skill I learned in that class was the lease vs. own or sale-leaseback financial model. It is a tool that I pull out of my analysis toolbox about three times a year and has resulted in a lot of satisfied clients. The most recent was a consulting assignment last year for a class A high-rise office building that resulted in a respectable fee and a potential transaction when the economy regains stability.
When I was a developer, I used the CI 102 Market Analysis techniques. Today, I use the information taught in the Robert L. Ward series on current topics. If you’re serious about learning about the fundamentals of real estate analysis in a short period of time, there is simply no better value.
-- Walter Clements, CCIM
CI-103 is helpful since tenant representation is large part of my practice. I recently used a comparison spreadsheet to leverage a tenant’s position with an out-of-town REIT.
-- Ira Korn, CCIM
The best course for me was CI 104 in the early 1980s. While IRR, NPV, and APOD and cash flow charts were new and exciting technical concepts, I think that the psychological concepts taught in CI 104 were the most beneficial. Those concepts taught us how to gain trust, how to modify our behavior so that we could be trusted advisors to our clients, and how to read and react to clients. Good stuff.
-- John K. Letherman, CCIM
As a commercial real estate appraiser, the full curriculum has been useful and informative both from a technical application standpoint as well as a psychological standpoint. The greater understanding of the commercial real estate investment decision analysis has helped substantially, specifically reflecting current economic conditions (see article, “Cap Rate Crazy”).
In the current market climate, most brokers are not as willing to share information with appraisers. Having a CCIM designation, I can contact other CCIMs to obtain primary market data. A CCIM designation fosters an increased level of respect from most industry participants. People are more willing to talk as well as listen.
CCIM courses are more focused on real-life application. The majority of other commercial financial real estate-related courses focus more on theory and tend to lack practical application.
-- Brian D. Frank, CCIM, GAA
My favorite classes were the tax and exchange classes. I enjoyed them so much that I became an instructor who loved to teach those classes. I have since worked with many investors that had little or no experience with taxation and exchange issues. They soon became very strong investors, and I still work with many of them. I have worked with over 100 investors in many states such as California, Arizona, Texas, Mississippi, Alabama, Florida, Georgia, North Carolina, and Virginia.
I have had a number of students send me messages about their classes, especially those who finally became CCIMs. My thanks to the cadre and staff for the education I got from my CCIM teachers and the students that followed.
-- K. Wayne Rice, CCIM
The CI 104 course has been most influential because it enabled me to calculate the impact of the increase in capital gains taxes my clients will experience if they sell before Dec. 31, 2010 or after Jan. 1, 2011. There isn't a day that goes by in which the subject of capital gains taxes doesn’t come up. I am able to differentiate myself from the competition as well as offer a valuable service to my clients because of the knowledge I picked up in CI 104.
-- Michael P. Jakubiec, CCIM
Without a doubt my favorite course was CI 101. You learn the universal language of investment real estate. This course really gave me the tools to succeed as a broker and as an investor. Once you complete this course, you are on your way to greater understanding of investments, which brings greater value to your services.
-- Len Magnani, CCIM
The most important CCIM course for me was CI 101. Understanding present value is essential for any commercial real estate broker, especially those who specialize in office leasing. I never go more than a day without doing a present value calculation and would recommend that anyone in the commercial business take this course.
-- Wayne Shulman, CCIM, SIOR
In CI 102, I gained the knowledge and tools to prepare a market area analysis complete with maps and other visual aids to depict the essence of the narrative. The most valuable lesson was the value of a lease term when selling an investment property. I thought I knew a good deal about real estate until I took my CCIM courses.
The things that set CCIM courses apart are the practical applications via case studies and the relationships developed with fellow students.
-- Timm Stubbs, CCIM