K.M. Minemier & Associates is a certified Woman Owned Small Business (WOSB) engaged in full service real estate asset management and marketing.

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No matter the technology, commercial real estate will always be a local trade

May 07, 2019

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When I started plying my trade in the early 80s, our means of sourcing new business were the phone, a Rolodex, shiny shoes, and a big smile! My, my, how things have changed.

If you were engaged to find someone a building or secured an agency to list a vacant property, your methods of getting the word out we’re limited to the U.S. mail, newspaper ads, calls, signs, and telling your fellow brokers. Area specialization was key. Because there were no multiple listing services — local knowledge was your value.

Flash forward. From our kitchen table, we now can access ownership of any commercial property in the United States — and there are over 48 million of them! Want to find a vacant building in Austin, Texas? No problem. Your client operates 400 locations nationally? We are now equipped to manage his account through the technology at our fingertips.

Competition for business is no longer local as everyone has access to the same information.

So with the advent of technology and the open doors we all share, has the local nature of commercial real estate been lost? Hardly!

Value is still local

One of my current assignments has taken me a bit out of my patch. I’ve been hired to locate a distribution center for an East Coast operator. Generating a list of available properties is a snap. Understanding the nuances? Not so much.

An example: We discovered the zoning of one of the buildings we liked would not allow our use. Hmmm. Had I been entrenched in that area daily I would have saved some time. In SoCal, the farther east you look the cheaper commercial real estate pricing becomes. However, distance from the port is greater, which adds a layer of cost. In some cases utilities are higher. Hmmm. Didn’t think about that.

Relationships rule

We recently competed against four different buyers for a building for sale. All four buyers had made asking price offers. All had demonstrated proof of funds and an ability to close quickly. We won the deal! Why? Because I had successfully closed several previous transactions with the owner’s broker. He had confidence in our ability. We see each other at the gym. We talk at open houses. We play golf together. I sat at his table at our recent SIOR (Society of Industrial and Office Realtors) event. This sort of familiarity is impossible if your practice spans many states.

It’s the market

I can look at a building on paper, let’s say in Tempe, Arizona. Certain boxes can be checked: size, amount of office, loading, warehouse clearance, price. I can jump on Southwest Airlines and see it in an hour. Great!

What I can’t determine are the recent sale and lease activity. How many properties with similar features are currently available? What are the local value drivers, such as employment, population growth, attitudes of municipalities and housing? Sure. I can utilize the same database used for the avails, but a true understanding of why the comps sold or leased can only be cataloged by someone there every day. That’s value!

 


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