Commercial Real Estate Investment/starting a commercial dividion

Advertisement

Expert: - 6/25/2008


Question
I was asked to start a commercial division as part of a Santa Fe NM residential firm. I have developed properties, sold many investment properties etc yet never though about starting a commercial div. What advise can you offer me that would begin a foundation of commercial real estate. This is a new firm.

Thanks,
Marvin

Answer
Marvin-

I love Santa Fe and have always been jealous of the inhabitants.  That little train station Mexican restaurant is a favorite of mine.

Residential and commercial real estate have many similarities and also significant differences.  My experience has all been in major urban areas with only commercial real estate property, so I am jaded in that regard.  It may be that I do not understand residential operations well enough to give you the best advice.

I believe that scale can have much to do with entry into commercial. Santa Fe may be a much different environment as far as competition is concerned, than New York City, Washington DC., or Miami.  I expect there are several major players in Santa FE, but it may be that you have a better opportunity to play there if you don't try to go head to head with the heavily financed, mindlessly aggressive elements of big cities.

It is important that you pick a niche in the commercial market and become the best in that niche.  Don't try to compete in every product area just by putting minimally experienced sales people that were good at selling residential out there in commercial and hope for the best.  They may have plenty of desire, but players in commercial value experience and market knowledge.

Your sales force must be very bright and hard working because commercial requires that you know a substantial amount of information about the niche market you choose to compete in.  If your people are 24-7 types (or close to it)  that are always up-dating themselves on the product inventory, read and study everything available regarding the commercial industry, present themselves well, and communicate complicated material in a concise and simple manner, you should find that owners of commercial buildings and developers will eventually give you and/or your division an opportunity to show them what you can really do.  

Be straight forward and direct and don't try to project that you know more than you do about commercial.  Most commercial owners and developers are very savvy and cannot be fooled!  But they do appreciate hard working people that they can tell are going to be successful.  Start by asking for business that you can handle, get results, and then move up to larger scale business.  Once you are handling larger business you may find you wish you had gotten into commercial earlier in your career.  It is extremely rewarding and exciting for the 24/7 type.

Best of Luck. I will look you up next time I am in Santa Fe and see how far you have come.

-Jim  

Commercial Real Estate Investment

All Answers

Answers by Expert:

Ask Experts

Volunteer

Jim Avancena, CPM

Expertise

Best qualified to answer questions that involve commercial leases, that is, basic issues as well as the often unexpected effects of the complexities and inter-relationships of the provisions a lease may contain, explain how seemingly innocuous text in your lease can have a major impact on a Tenant or Landlord and their business operations, and the common practices utilized in the industry. I can untangle most matters that may come up from the time a tenant begins searching for a office or store space and the lease acquisition process, concerns related to remodeling/improving the leased premises, moving-in, subletting or assigning the leased space, and a long list of problems that may come up during the lease term and even after a tenant moves out. I have practical experience with most property management issues and resolving landlord and tenant disputes - especially those involving what may appear to be overcharges assessed for additional lease charges like CAM costs, operating expense reimbursement, real estate taxes, utilities, construction improvements etc. Note that I am not an attorney and cannot provide legal advice.

Experience

Thirty years active experience in the commercial real estate industry as a licensed real estate broker in the Washington DC Metro area (DC, Northern Virginia & Maryland). I have been admitted (approved) by the Maryland and DC courts to testify as an expert witness on the subjects of Commercial Leasing and Property Management in the area of standard industry practices. I have had a business for the last 14 years advising virtually every form of business entity from large national corporations to the smallest ma & pa new businesses regarding a wide range of commercial real estate matters in addition to property management and commercial leasing.

Organizations
Currently my three children keep me so busy that it is difficult to participate in organizations with continuing and specific time requirements.

Publications
I publish a local commercial real estate newsletter titled: "Tenants First". My firm was the subject of a high profile Washington Post business section cover page (2.25 full pages) feature story on January 13, 1993; titled "Overcharging Overhead".

Education/Credentials
BA in Political Science from Memphis University, and five years of study in the real estate development summer program at MIT. I was certified as a commercial property manager (CPM-IREM), and currently hold a brokers license in Maryland and the District of Columbia.

Awards and Honors
The same plaques and honors that most others in my industry have earned. I have none that I consider especially meaningful.

Past/Present Clients
Past clients include: The World Bank, George Washington University, National Association of Criminal Defense Attorneys, US Department of Commerce, The American Benefits Council, K-Mart Development, many law firms, a national union, other major organizations, and many, many small business firms and retail operators that I am most honored to serve. I estimate more than 1,500 firms/organizations.

©2012 About.com, a part of The New York Times Company. All rights reserved.