building
brokerage

What I Learned On My First Day of Work

I’d like to preface this by saying that I am extremely excited to start my exposure to the actual world of brokerage.

From the books, stories, shows and podcasts that I’ve been exposed to on the subject of commercial brokerage, I had a vision of how the industry looked. I envisioned a lot of suits, emails and dinners. I had a picture in my head of brokers in suits, 24/7. No smiles and lots of heartbreak with deals taking months and months.

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I learned very quickly that brokerage is much more about your work ethic and the way you have positioned yourself in the market. Also, I felt like the office was part of something bigger. The entire staff, including secretaries and IT professionals, were all there to help an unfamiliar face. I realized then that it wasn’t just “talk” when someone says, “real estate is a people business.” Anyone involved in the process from start to finish, needs to be personable, knowledgable and accountable. Without this simple principle, the entire system would come crashing down.

The Team

Just like many other brokerages, the office I am working in is centered around a commercial realtor/broker team. This team is made of around 8-10 total professionals. During my first day, they had their weekly meeting where they all sat down around a table and reflected on the past week. It was amazing to see how active the Gainesville market really is. I was so impressed with the activity in such a small market like Gainesville. This got me truly excited for a future in brokerage in a larger market like Miami. I thought to myself, “if Gainesville has this much activity, imagine how much opportunity there will be in your future, David?” That motivated me to truly keep pursuing this profession.

Wants And Needs

One aspect of the broker/team dynamic was a practice called, “wants and needs.” I’m sure that every realty services team does something like this, but it was an epiphany moment when I watched each real estate professional tell the room what his client’s wanted (tenant representation) and needed (landlord representation). I literally saw the beginnings of a deal right then. One agent says, “I have a client looking for 2*** sqft downtown around $**/sqft.” Then, another looked up and said, “I’ve got it. I’ll show you right after this.” And just like that, the process has started. I know that it seems like a no brainer, but it boils down to the most basic and prized principle in commercial real estate. When you are part of a team, it is best when everyone involved succeeds. You are only as strong as your weakest link and by looking within and finding great solutions to your client’s needs, you can make great strides. This aspect of the business excites me and keeps me hopeful for the future.

Good luck out there,

David Corbin  

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cre, retail

Cyber Monday’s Success Doesn’t Mean The End of B&M Retail

As we all could have guessed, Cyber Monday shattered previous sales records. IBM Digital Analytics tracked activity during the web-phenomenon. Yesterday, total sales were up almost 9% from last year. Last year, sales during Cyber Monday were up 16.5% from the year before. This is confirming what we all know and dread, that online shopping is truly becoming a stronghold in our new tech economy. Something even more interesting is the figures on mobile sales. The amount of activity on mobile devices was up over 30% from last year. That is a trend that might be dangerous in the future. Growth like that can show an undeniable truth that the average consumer is not only utilizing tech, but also embracing it. Overall, however, total Thanksgiving weekend spending declined 11% to $50.9 billion.

With all of that being said, online commerce only accounts for around 6% of total retail sales. This figure is from 2012, so we can assume that it has continued to grow with the growth of online retailers like Amazon, Ebay and Overstock.com. But, this growth and the success of Cyber Monday does not mean anything to the future of retail. Brick-and-Mortar will continue to be the most popular avenue for retail because of a simple fact: we need immediacy. A study by WD Partners, a retail consultancy, shows that 79% of consumers listed “instant ownership” as the most appealing attribute of any retailer. However, that doesn’t mean that brick-and-mortar retailers can just stay in their current state and they’ll be fine. The future of these retail stores will look very different than how it does currently. Millennials have grown up in the age of big-box, impersonal shopping, such as Toys-R-Us, but we know the value of an experience. We can imagine the store like the one pictured below.

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If we think that retail is about an experience now, imagine when retail becomes all about the experience. WD Partners posits that the future brick-and-mortar store will have lounges and meeting areas that will not only help showcase the products, but also create a relationship with the customer. This relationship will translate into deeper consumer loyalty and that will be the key to success.

So, if you’re in retail, I know it is easy to be scared of the future. My father has worked in retail for 30 years and I have seen the stress that the market creates. But, don’t think that these huge online sales mean the end of your stores. Be flexible, be innovative and create an experience. Your customers are your lifeblood. Treat them right and you’ll be fine.

Good luck out there,

David Corbin 

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television

Million Dollar Listing: Good Or Bad For The Business?

Million Dollar Listing, for those of you who don’t know, is a very popular reality show on Bravo TV that follows the lives of 3 residential real estate agents. This show garners around 1 million viewers each week. It has undoubtedly, brought a new focus to the profession of residential brokerage and with that, has come an increase in realtor licensing. The increase in license applications slightly correlates with the popularity of the Million Dollar Listing series. Of course, the focus of this increase is in residential real estate, but the growth of the profession is noticeable.

That being said, these shows are painting a picture of real estate that might not be as honest as some might imagine. For example, in a few different interviews with individuals involved in the production of Million Dollar Listing, they recall numerous different instances where scenes were manufactured or brokers instigated situations to get better dramatic effect. An example of this is this account by Holly Parker, an Elliman broker; “the show had staged a broker party at a penthouse at 100 11th Avenue that she had sold for $19.4 million. So brokers were ostensibly being introduced to the listing after Ms. Parker already had a signed contract. She referred to the show as all make-believe.”

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As much as we would like to bash reality television, this show might not be all bad. We are seeing a side of the brokerage profession that we would never have seen. The luxury residential real estate industry is a very lucrative one and can seem appealing. It looks even more appealing when the brokers on the show look like they barely work. The work that I do in my commercial office is very intense, numbers heavy, and complex. I guess that is the difference between residential and commercial, to an extent. But, this show does convey a bit of a lofty lifestyle. Either way we look at the situation, we are seeing more interest in the profession and industry. That being said, the quality of these younger, wealth-motivated professionals has yet to be established.

Current hiring trends seem to lean towards promoting from within and hiring select recent graduates. The business has continued to be focused on relationships so if your motivation to begin in the business came from Million Dollar Listing, but you have connections, there is some hope! Whatever the circumstances are, I believe that Million Dollar Listing has been good for the business and the brokers involved. Just like many other professions, real estate representation can be taken for granted by those who don’t use their services.

Good luck out there,

David Corbin 

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Uncategorized

When Will Green Buildings Become A Standard?

We all know that the world is changing. We all understand that our climate is undergoing an unprecedented shift in our atmosphere’s composition. As real estate professionals you are all aware of the potential for rising utility costs and the impact that that will have on ROI. With that being said, there has been a movement towards greener buildings and an emphasis on LEED certification. When will this priority on green construction become an extreme necessity and not just an option.

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New construction is on the rise, as well all know. With this new construction comes the development of new land, or the redevelopment of a previously occupied site. According to the U.S. Green Building Council, “By 2015, an estimated 40-48% of new nonresidential construction by value will begreen, equating to a $120-145 billion opportunity.” We can see that being green has become a priority through the increase in LEED applications. For projects over $50 million, LEED is referenced by 71% of projects. Achieving this LEED certification is a top sustainable goal for both private and public projects. Public projects that are seeking LEED certification are up by 50% over the past year. This is a huge indicator for green construction because, one of the first things you are taught as a real estate professional is to follow the big money. Well, there aren’t many institutions bigger than state and federal governments.

According to the Building Council, the 3 biggest drivers of green buildings are: the economy, large non-residential projects booming and government mandates and policies. These drivers are obvious, but when put into perspective, we need to understand that as these drivers are constantly changing, constantly being tugged in different directions. One thing that is for sure is that as energy prices rise, a priority will be placed on building performance. LEED projects are in the 11th percentile in U.S> in terms of energy usage and have a 57% lower source energy intensity than the national average.

All of these facts and figures lead to one thing, the future for green construction is bright, and I believe that green building has become the standard and will continue to set the standard.

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What I’ve Learned About #CRE Living In A College Town

 

**Keep in mind that these are my thoughts and observations**

Gainesville: Gator Country

As some of you already know, I am a proud Florida Gator, residing in beautiful Gainesville, FL. I have lived in Gainesville for about 3 and a half years now and I can tell you that this is one of the most interesting cities I’ve ever been to. The population is dynamic, young and educated and there is intense competition among tenants and investors in both multifamily and retail. With that being said, we have a very interesting office market thanks to the plethora of entrepreneurial ventures brought online by UF students and graduates. There also has been a huge push from the University to become a much more competitive option for incoming students and with that comes some very innovative investments into creative spaces and private partnerships.

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Priorities 

The overall market has three major priorities to satisfy: student housing, fast-casual dining and innovative office. The student housing market is Gainesville is unbelievable. The competition for the luxury apartments in two specific submarkets has continued to push rents very high. This growth in

Submarkets

The Gainesville market is very interesting because it has such an enormous anchor in the University of Florida so the submarkets are all in relation to that anchor. Below is a map of the University of Florida and the surrounding streets. The three major markets in relation to the University is 13th street (Downtown), University Ave (Midtown) and 34th street (Archer). The 13th (Downtown) market is very dense with student housing. Most are single family homes but there are some very strong and competitive apartment complexes. This is the market closest to our sorority row so rents can fetch upwards of $1,000/month/room and the rents vary in relation to their proximity to sorority row. The 13th street market is also where the biggest and most innovative development is going. A public/private partnership has brought together a 30 year planned community of office/retail/residential living in Innovation Square. Construction has started and businesses are making their commitments but locals are weary of its success due to its high rents and target market of entrepreneurial ventures. With rents in the higher end of the rental spectrum ($20 sq/ft $5 NNN) it’ll be hard to get newer startups to take that fixed cost if they have other options, which they do. Either way, this is very interesting submarket. The University Ave (Midtown) market is heavy on student housing and retail. The area is known for being where all our bars are. There are a couple thousand single family homes in this submarket and a handful of multifamily complexes. This market has lower rents, but still high for the market. The last market is 34th and Archer which is primarily retail with some multifamily complexes. This apartment market is still extremely competitive but less expensive. The retail sector in this submarket is anchored by a huge center called “Butler Plaza.” Butler Plaza has numerous anchors (Target, Walmart, Lowes and Publix) and dozens of great restaurants and outparcels.

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Should Investors Look To College Towns for ROI?

I believe that college towns are an extremely safe market for institutional and individual investors. Although the returns might be slow because rents have to be competitive, prices are low so cap rates are still attractive. Smaller investors need to follow larger capital investments when it comes to deciding on a market. When it comes to Gainesville, investors should take note that not only are institutional investors pouring money into our market, but also the State of Florida is investing millions in the University of Florida. With this investment and faith in our market comes a stable investment opportunity. So next time you’re searching for a new market to show investors, make sure to stop by your state’s flagship university because I can assure you that it will most likely be one of the most vibrant, exciting and stable markets in your area.

Good luck out there #CREFam

David Corbin

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Are Millennials Ready To Take Over The World?

Who are we?

Millennials are a fickle group. We are stubborn, hungry and passionate. Some generations think of as a group of immature, tech obsessed, children, but I can promise you that we are not nearly that bad. As a generation, we have grown up in some of the most interesting times we have ever seen. Not only have we seen war and recession, but we’ve also seen a complete revolution of our daily lives *technology echemm*. Think about that…

We are a product of our environment

The world that millennials have been living in is much more like the world of the next 50 years than the world of previous generations.That already will give us an upper hand in the workplace, but that won’t come for years. Look at the below graphic to see the “Great Divide” between how my generation thinks of ourselves and how HR professionals think of my generation. These perceptions will need to be overcome because these aren’t just workplace perceptions. The world has similar feelings as well about our generation. That principle might not be able to be overcome by the time millennials just naturally take over. But, until then, we will spend each day fighting that perception of being socially inept, lolly-gagging, joy boys.

How does this relate to real estate?

According to Savills Studley, “We estimate that the value of all world real estate totals around US$180 trillion. Most of this is directly owned residential property and most of that (72%) is owner occupied. About 17% of it is commercial property. Investable commercial property totals around US$20 trillion, of which about half is owned by private individuals, either directly or indirectly, and the remainder by corporate and institutional investors.” Screen Shot 2014-10-23 at 7.43.44 PM

One day very soon, we will take over the world. And that will definitely include an enormous majority of the world’s real estate. The future of commercial real estate and investible property lies in the hands of my generation. Land will be passed down, properties will be purchased, decisions will be made and they will be by my generation. I have so much faith in the millennials because we are undoubtably the best educated and most competitive generation the world has ever seen. And when more of us are in leadership positions and making decisions, we will make thoughtful and deliberate decisions. Not to mention when it comes to overcoming adversity, my generation will come up with some of the most creative deals and innovative transactions that this world has ever seen.

So…Are we ready?

Right now, we are not ready to take over the world. Millennials need some time to mature. We can see plenty of my generation running the world’s largest corporations, but that does not mean that we are even close to being ready. Right now, the oldest of my generation are around 34 years old. It would make sense that we will be ready to lead when that same group reaches around 50 or so. Personally, I believe that we will be ready sooner because there is no generation better suited or prepared group of young people so excited to make a difference and live in a better world. That time is coming. 

Good luck out there #CREFam,

David Corbin 

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The Fast Approaching Future of Fast Food (Dictated by Millennials)

Post inspired by Michael Bull’s Commercial Real Estate Show**

According to company statistics, 1 in 8 American workers have been employed by McDonalds. But that will soon change. Momentum Machines have come up with something that looks to completely take the human worker, out of the kitchen. Momentum promises that their machine can do everything a line cook can do, but better. Below is what their machine looks like. It looks like it is efficient and compact. But, this is just the first of what is yet to come.Robot-Specs

What does this have to do with commercial real estate?

If you’ve ever been through a drive-through (which I’m sure you have…let’s be honest, we’re all friends), you can see the kitchen. You can see that there is plenty of open space for the multiple employees that need room to run around. If one of these machines can make 400 burgers an hour, and it is modular, there is scenario that could play out where the development or redevelopment of these single-tenant out parcels look more like a mini Checkers drive-through than the usual Wendy’s. With a smaller footprint and less capital being used to support staff, these types of restaurants will become much more cost-efficient. This won’t happen over night though. I believe that one chain will adopt this new system and once the process is proven, others will slowly adopt it as well.

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 What will this mean for jobs? 

With pressure from the public, Washington is hearing cries to raise the minimum wage to even $15.00/hr. Now, that would make a serious impact on the fast/fast-casual food industry. Some will choose to bite the bullet and remain dominantly human staffed restaurants. Others however, will choose to go in this new world of automated production. If you think about the process you go through at a fast food restaurant, there really isn’t much that can’t be done by technology. From taking your order to receiving payment to (now) production of product, technology can do ALL of it. Joseph Durocher, a professor of hotel administration at the University of New Hampshire, told The New York Times,“The fast food industry has no alternative; it will have to robotize. No longer can they afford the luxury of having human workers standing at the beverage bar with a cup or watching hamburger patties on a grill.”

Why can we thank millennials for this? 

Now, to millennials. The generation that is ruining everything. Millennials have a spending power of about $1.3 trillion according to RBC Capital Markets. With that, they have shown a clear priority when it comes to fast food. There has been an annual decrease in millennials visits to fast food establishments since 2007, but there is a light at the end of the tunnel. We are becoming tired of the quality of the food being served so we are seeing a very prominent increase in traffic to higher-end fast-casual establishments. Brands like Chipotle, Panera Bread and Starbucks are seeing great successes. But it is not as much about the food itself as it is the quality of the ingredients. Check out this video of what McDonalds looks like after 10 weeks. Pretty interesting.

With that….the savings from these fast food brands going robotic, they can afford higher quality ingredients!

With that, have a great rest of your week!

Good luck out there #CREFam,

David Corbin 

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