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MY WAY
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MY WAY Not Only Did The South Rise Again, They Won. Oh, more about Josh...well, almost...Ann and I attended the Texas Dealmaking show and over 3,000 “tall hats” showed up to wheel and deal, nearly a 20% increase compared with last year’s show. You can't ask for more than that, especially considering it was only five or six years ago that the show attracted only 750 or so dealmakers. High energy is the only way to describe this event. Texans love dealmaking and socializing, and they do it well. Here's another market in which small developers excel. The South seems to be an area that smaller developers love; they’ve found a niche that the REITs can't touch. They may never be Kimco or DDR, but they live the good life and have fun -- a great way to make a living. The only real complaint we heard at the show was the lack of “real” retailers, and that seems to be the rule at most events, so get over it. The broker has become the mainstay of dealmaking for many, if not most, retailers and you're going to pay that commission, like it or not.
Another change I noticed at this and most shows is that the actual dealmaking is lasting longer. In the “old days,” if the dealmaking started at 8 a.m., for all practical purposes, it was over by 1 p.m., even if the official closing time was 3 p.m. or 4 p.m. Now, the activity goes on ‘til 2 p.m. or 3 p.m. So, people are staying longer and hopefully making more deals. I had one interesting conversation with a developer who had just finished building a Starbucks. He wanted to know what I thought the CAP rate could be. I responded with a 6.2% to 6.5% rate. He said that's what his friends are telling him, he just didn't think anyone was that dumb. I agreed with his outlook but said there's a lot of dumb buyers out there. Anyway, moving on, Josh and I went to the Atlanta show, which was larger than Texas with about 4,000 dealmakers compared to last year’s count of 3,500. (It’s almost getting boring to announce all these increases in attendance. I'm warning you in advance: The New York show in December will be a nightmare; there will be way too many people. And, FYI, most of the "better" hotels are sold out for Vegas and it's only November.)
The energy level of the Texas show was higher than Atlanta's, but the attendees still did their share of "dealmaking." Like Texas, Atlanta has a lot of smaller developers and, like Texas, their biggest complaint was the lack of real retailers. Atlanta has their “Retailers” show the day before the actual dealmaking and I’d guess they had 40 to 50 retailers exhibiting at this busy event. But, my gut tells me that the amount of retailers exhibiting was less this year than last. BUT, that didn't stop the wave of developers/brokers stopping by each booth hoping to do a deal. The cocktail party in Atlanta was jammed and most people in attendance had dinner invitations for various gatherings right after the show. So, there were a lot of tired people the next day, which explains why the show got off to a slow start on Wednesday. BUT, by 10:30 that morning, the trade floor was hopping and stayed that way until 30 minutes before closing.
I did hear one interesting tidbit: It seems that the government of Puerto Rico has sent letters to the major retail developers on the island saying they are about to start an investigation into the possibility that these landlords are gouging the tenants on CAM and electrical charges. Talk about a disaster looking for a place to happen. Now, I'm totally opposed to owners making more than nominal amounts of money on CAM, taxes, etc.; their profit center should be the rents. BUT, I'm also a great believer in, “The government that governs least, governs best.” Let’s hope the developers do something before the government does. Otherwise, it might give some ideas to states in the U.S., and then we all lose.
Changing subjects, as you are aware, I've been chronicling the “Adventures of Josh” since he joined the company going on 5 months ago, and I have to admit, it’s becoming LESS frustrating (but still frustrating) while trying to teach him the business. Well, I guess my remarks struck home to a lot of people, since we received LOTS of e-mail on those MyWay's. Here's two, which are typical of the rest:
Ted, I just started in the real estate business a few months ago and enjoy reading your articles. I am in the same boat as Josh and can understand what he is going through. (Cold calling, asking what seem to be logical questions to a higher authority.) I, however, disagree with the statement that we have to be taught EVERYTHING. It’s not that we don't know how to fax or pick up business cards, it’s that we understand that our superiors are succeeding at what they do and we want to learn their style to emulate them. I think it’s a good thing that you have new workers craving to learn more and more each and every day. You should see that and be excited to teach them. This is your passion, isn't it? As for me, I guess I am getting the best of both worlds. I am starting out like everyone else does, however, I think my bosses have a different view, one tailored more to getting me to their level and watching me succeed. I think their reply to your friend would be, “Do it, and find new possibilities.” We are not embarrassed. If we were, we would sit at our desk waiting for you to come to us. We are seekers, ready and willing to combat new things each day. I for sure know that if I don't ask questions, I won't succeed. For you it's “Location, Location, Location.” For me, it’s “Questions, Questions, Questions.” Shouldn't you always ask questions before you worry about a location? In closing, I think we are an asset and need to be accepted. All those VPs who are training should understand and be willing to teach because I am sure, back in the day, those were the guys bugging their bosses up the wall. Tom DiCicco Database Manager
Ted, I read your articles in every issue of Dealmakers and, typically, they're perfectly written and have humor to them. This is something I appreciate and like, since sometimes I feel this industry lacks some comic relief and tends to be too serious too often. Having said all that, your article about Josh, while well taken and a point probably shared by many seasoned brokers/retailers, has some “holes” to it. I started in this business just over six years ago, when I was 22. Now, my story is somewhat different in that my father has been in this industry since 1981. Because of that, I had a very small and limited knowledge of this business when I started. I, too, however, needed that training to get the necessary knowledge to be successful. Here was the key that helped me become successful:
Our company is a very small company in terms of number of employees. However, we compete on a larger scale with the likes of the Mid America's and CB Richard Ellis’s of the world. Our inventory is massive compared to the amount of people we have that work the brokerage end of this business. Currently, we only have three brokers here, including myself. When I started here, there were only four: The three principals of the company and one other broker. Since my father is the President and principal of this company, he certainly had no time to train me each and every day. His partner was and still is equally as busy as my father. The third principal, too, was busy doing her own thing.
My job was simple. I began as Database Manager here. I took an “old school” 3-ring binder crammed full of years and years of contacts (both locally and nationally) and computerized them. Now I didn't just type them in a computer, I called each and every one of them. Some were long gone and no longer in business, but most were still active. Throughout my life, my father has always preached to me about work ethic and striving to be “more successful than he is.” Obviously, that is a typical statement and wish from a father to his child. So, for as busy as my father was, he always took the time to tutor me because, not only was I an investment to him personally as his child, I was and still am an investment to his company. Additionally, this was his way of training me. He put me on the phones making calls, getting to know who people were, learning terms of the business and getting my own name out there.
See, that is what the “elders” of this industry need to realize: Young newcomers in this business are not a pain in the neck. We're an investment to the companies we work for. We're not just around to bug busy brokers to ask questions. We're here to soak in the knowledge from them. The one thing I will always do is, when someone young enters into this business, whether it be a friend or just someone coming to work at our company, I will always take the time to talk to them and give them as much help and information as they need. I needed it when I started, so will they.
Remember this, at some point or another, we (meaning all of us in the real estate business) were all in the same boat. I'm sure you were when you started in real estate, and I'm sure there was someone there to tutor and mentor you along the road. That's why CB Richard Ellis is as successful as it is today. It seems as though the majority of seasoned brokers from the Baby Boomer era all started at CB (formerly, just Coldwell Banker). They had it down perfectly. Each new entrant into the business “ran” for someone who was seasoned. My father happened to get his first real estate job with CB, and the man he “ran” for taught him some valuable lessons, which were passed down to me.
All in all, let's take it easy on the young newcomers because one day, we will be the generation that is the majority within this industry. And again, I know for sure that when the next wave of young sales people come through when I am old and have many years under my belt, I’ll be sure to fill them up with as much knowledge as I can! Jason R. Lenhoff Horizon Realty Services, Inc.
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