The Road to Success
Focus on Education and Specialization When Mapping Your Future.
he rocky economy presents
many bumps in the road for commercial real estate professionals mapping
their future paths. Other obstacles block the view of what tomorrow's
workplace will require. For example, how will you deal with a new breed
of savvier clients demanding faster and more in-depth answers? How will
you process the unending barrage of information that crowds your
e-mail, voice mail, and snail mail? That's the direction the industry
is headed, but are you paving the way or trying to decipher the road
signs up ahead? To stay on course, practitioners need to hone their
most marketable commodity -- their knowledge -- by staying current on
industry trends and new technologies. At the same time, they should
consider specializing in a certain niche or property type to separate
themselves from the competition.
Clearly, commercial real
estate professionals will have to be well informed, well read, and well
connected to reach their final destination -- whether it is increased
earnings, an expanded client base, or another career goal. Brokers must
invest in themselves to get ahead in the future.
The Learning Curve
be competitive, “more education is going to be required,” says Cliff
West, CCIM, vice president of land development services at Colliers
International in Cleveland. “Our industry as a whole is still
One particular area where brokers need solid
expertise is the financial end of commercial real estate deals, he
says. “Our clients consider us advisers, and therefore [assume we] have
the ability to analyze the investment potential and financial risks of
a transaction,” he adds.
Continuing professional education is
one way for brokers to broaden their knowledge base. West currently
sees more colleagues becoming interested in taking professional
courses. Another strong believer in professional designations is
William Hugron, CCIM, CPM, managing director of the Charles Dunn Co. in
Irvine, Calif., who has seven under his belt and an eighth in the
In addition, the increasing complexity of local real
estate ordinances demands that professionals be well versed in zoning,
regulatory, and environmental issues, says Joe W. Milkes, CCIM, MAI,
principal of Milkes Realty Valuation in Dallas. “Even if you don't have
the answers, you need to have resources or contacts who know how to
Additional education for staff members also helps
to increase a company's resources. “Our personal assistants need to be
better trained by us; they need to thoroughly understand what we do,”
West says. “They can handle a lot of problems, especially if we're
unavailable and a client really needs to have an answer.”
would like to see more personal assistants licensed, which would allow
them to discuss potential transactions with clients without violating
state real estate laws. “It builds a knowledge base for them, and they
become more of a partner for us,” he says. “That's going to be critical
in the future, because we have less time to do more,” he says.
Brokering Your Knowledge
being more educated isn't going to increase your business, but many
professionals find consulting a profitable way to market commercial
real estate expertise.
“Clients have access to an enormous
amount of information,” West says. “What they really need now is for us
to explain what to do with it.” As a result, straight consulting roles
with flat fees or hourly rates rather than commissions are becoming the
norm, he says.
Entities that aren't in the real estate business
also need consultants, says Maureen McAvey, senior fellow in urban
development at the Urban Land Institute in Washington, D.C. She cites
expanding colleges or churches and nonprofits that are developing
affordable housing as possible clients.
Breaking into the
consulting field requires a unique product or salable skills -- “a land
data bank in your area that's unmatched by your competition; a rŽsumŽ
of many business transactions, both consulting and straight brokerage,
proving a base of experience,” West says. He suggests marketing to
high-growth companies that may need strategic advice on real estate
Spotlight on Specialization
specializing is a way to set yourself apart, “specialization is going
to get more intense,” West says. “Just saying ‘I do industrial' or ‘I
do land,' especially in the major markets, is not going to be enough.
You need to be the person to go to in your market,” he says.
seeking to specialize must approach their strategy analytically, Milkes
says. He suggests looking at your market and asking yourself the
Where are your contacts?
What types of people do you work with best?
What pro bono work could you do that could lead to positive business relationships?
specialization trend applies to companies as well. Currently, most
small companies are broad-based to appeal to a wide range of clients,
West notes. “But in [Cleveland], the smaller companies that are doing
very well are more specialized,” he says. Such companies may represent
tenants only or concentrate on a specific area such as West's: land
acquisition for nonprofits' building projects.
team concept is another large- and small-company approach, says Don R.
Scheidt, CCIM, GRI, MAI, president of Indianapolis-based Don R. Scheidt
& Co. Companies can organize a team of specialists to provide
expert service during every step of a transaction, he says.
Finding New Opportunities
to the surge in city infill development, opportunity abounds for
professionals experienced in public/private partnerships, mixed-use
projects, and zoning and permitting, especially in previously ignored
neighborhoods, McAvey says.
“Any area that has income -- even
low income -- needs grocery stores, auto parts stores, and dry
cleaners. Residents are spending a lot of money somewhere, but they're
just driving farther away to do it. There are a lot of inner-city
markets where there's going to be tremendous opportunity for growth,”
High-growth suburban areas also present development
opportunities, McAvey says. “We're expecting an additional 63 million
people in the country over the next 20 years,” with most growth
occurring in southern and western states, she adds.
companies must accommodate these new residents' needs. Fluency in
additional languages, expertise in analyzing a diverse population's
market characteristics, and experience with multinational corporations
are important skills, she says.
Older, midsize urban markets
face different challenges than those affected by new populations. For
example, in Cleveland, the number of corporate headquarters has shrunk
in recent years due to mergers and downsizing. “The major markets are
going to have more of the corporate headquarters, and more of the
decisions are going to be made in those cities,” West says. “We may get
a piece of that business in Cleveland, but the person making that
decision is likely to be in one of the major markets. That's where
specialization comes in. In a market, you need to be the very best
Focus on Properties
estate practitioners also must track shifts in the industries they
serve. For example, in retail, “what you see today is not what you saw
20 years ago,” Hugron says. “There are no more mom-and-pops; they're
being killed by the big boxes.” Also, traditional grocery- and
drugstore-anchored shopping centers now have more service-provider
tenants, such as mailing centers, chiropractors, and beauty salons.
“There's a fair amount of opportunity in leasing to service and food
providers, which typically pay higher rent,” he says.
office market, an evolution is occurring as well. Currently, smart
buildings are hot, but increased wireless communications soon might
redirect this attention. “In the last five years we've seen a lot of
money go into infrastructure to support the technology, and now all of
a sudden, we've found other ways to get around it,” Hugron says.
recommend for someone to stick to one product type in one geographic
location, and really know that market inside and out,” Hugron
Staying on Top of Technology
real estate professionals emphasize that technology skills primarily
are a means to an end -- a faster and more efficient communication
vehicle and a way to stay current with client needs.
is raised every year for agents to be more proficient and more
professional and [to] provide greater services quicker,” Hugron says.
“Speed is a key issue in our industry now.”
That need for speed
has changed the way brokers interact with clients as well. “There are
clients who, if I call them up, might return my call in a day or two,
but if I e-mail them, I might get a response in 30 seconds,” he says.
“So now I ask people what form of communication they prefer: e-mail,
telephone, or fax.”
Although clients expect technological
expertise, West notices some backlash. “People are a little concerned
that we're too dependent on the information that comes off of computers
and that we've lost some of our reliance on the human ability or
knowledge that we used to depend upon,” he says. “Some of our clients
are getting a little turned off by high-tech presentations. More
importantly, they want to know that you understand the information
that's being generated and how to use it to make money for them.
are here to stay, and they're excellent tools. Where the danger might
lie is that we stop using them as a tool and start using them as our
skill base,” he adds.
Milkes agrees. “You still have to work on
developing relationships,” he says. “Look at nontraditional ways to do
so -- through involvement in nonprofits and civic organizations and by
being willing to do some pro bono work. There are ways of building
relationships other than selling people things or buying them lunch. In
the coming years, you've got to use that type of long-range approach.”
commercial real estate professionals continually should hone their
human relations skills to build the best foundation for the road ahead.
“It's still a relationship business,” West says. Especially in light of
the recent spate of corporate scandals, “people want to make sure they
trust the person they're dealing with. Human contact, personal
relationships, trusting relationships -- they're going to be involved
in this business forever.”