Commercial Investment Real Estate

MAR-APR 2016

Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.

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20 March | April | 2016 Commercial Investment Real Estate C CIM b E D U C ATI O N Small-Market Survival by Sara S. Patterson Big-ticket transactions are tougher to fi nd in small commercial real estate markets. As a result, it can be more diffi cult for CCIM candidate members to reach the portfolio submission requirements to earn the CCIM designation. Expert Assistance However, many CCIM designees have pre- vailed despite small-market challenges. Here they share their tips for market — and mind — expansion with those who find themselves in similar situations. Expand Your Market and Asset Class Specialization. That's what Beau Beery, CCIM, in Gainesville, Fla., advises for greater success. While he has completed deals in of ce, retail, industrial, and multi- family, Beery gravitated toward multifam- ily. T ree years ago, he made multifamily his specialty and expanded his territory to all of north Florida, exponentially growing his business. His four other team members focus on the other commercial real estate sectors. Pay Attention to the Details and Become the Expert. In tertiary markets, commer- cial real estate professionals of en have to understand every aspect of the commercial marketplace. The details really matter to complete successful deals. "Understand- ing all aspects of a smaller market is more challenging than in big markets," says Larry Kuchefski, CCIM, managing broker at Cold- well Banker Commercial Devonshire Realty in Champaign, Ill. "I take calls for market information from real estate appraisers every day because it's not available anywhere else." Develop Creative Solutions. When a transaction almost collapsed, Ron Welebny had to think quickly, applying skills he had just learned in the CI 102 course from instructor Gary Ralston, CCIM. A qualify- ing broker at Rossman Commercial Realty in Cape Coral, Fla., Welebny had put together a deal for a multi-use industrial and stor- age building. T e buyer's contract had been signed, sealed, and almost delivered when the building was raided: A Miami-based crime ring had set up a chop shop involv- ing 30 percent of the tenants. Overnight, the previous 90 percent occupancy was history. Welebny did a quick supply and demand analysis and found a shortage of that type of space in the trade area. "We repack- aged the entire transaction to replace the bank loan with seller f nancing," he says. T e seller agreed to hold the note with one critical dif erence — no payments for the f rst six months. "T e cap rate is actually higher than with the place full under the terms that we had originally craf ed. So the gamble is really producing replacement tenants in that six months." Already two separate tenants already have signed up for one-third of the vacant space. Dominate Your Market Niche. As the only full-time commercial real estate bro- ker working in Danville, Ill., a community of 35,000, Kuchefski has also moved into development. "T rough both buying, selling, and devel- opment work in Danville, I of en get other investors interested in our city," he says. "It's Pinkypills/Thinkstock

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