November | December | 2014

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The Magazine of the

Institute

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CAPITAL MARKETS OUTLOOK

NNN RISKS

Buyers battle and sellers win

as investors fi ght for

apartment properties.

MULTIFAMILYSHOWDOWN

This article brought to you by Commercial

Investment Real Estate, the magazine of the

CCIM Institute.

To read the entire issue or fi nd out more about

the Institute, go to www.ccim.com.

by Stephen Rangel

2014’S BIGGEST DEALSDean Saunders, CCIMColdwell Banker Commercial Saunders Real EstateLakeland, Fla.$565 million land purchase

Jill K. Rasmussen, CCIMThe Davis GroupMinneapolis$131 million build-to-suit lease

Richard Egitto, CCIMInverness PropertiesEnglewood, Colo.$81 million offi ce lease

T. Sean Lance, CCIMVertica PartnersTampa, Fla.$54.5 million multifamily sale

Eric Tompkins, CCIMCBRESan Diego$54.5 million offi ce purchase

Commercial real estatetransactions are on the upswing in 2014. About 54 percent of CCIM Institute members report completing more deals in 2014 than in the previous year, according to the 2Q14 CCIM Quarterly Market Trends report. And deals are getting bigger. In the past 12 months alone, CCIMs reported more than 20 deals of $30 million or more, comprising more than $1.5 billion, spanning all property and market types.

What’s the secret behind closing these major transac-tions? “Hitting singles and doubles on a consistent basis can a� ord you the opportunity to swing for the fences,” says T. Sean Lance, CCIM, of Vertica Partners in Tampa, Fla. While these types of deals pose unique challenges, they are not out of reach of CCIMs.

Big Deal MojoLike all commercial real estate deals, expertise and relationships are essential, along with hard work and

experience, says Jill Rasmussen, CCIM, of � e Davis Group in Minneapolis. Rasmussen and two partners represented the National Marrow Donor Program in the 15-year, $131 million lease of a 237,500-square-foot build-to-suit development in Minneapolis from United Properties. “Focus on a market niche and be the expert,” says Rasmussen, who has established herself as a corpo-rate o� ce and healthcare specialist.

Using his multifamily and development expertise, Lance and a partner negotiated the $54.5 million sale of a 605-unit multifamily portfolio in Florida from a Mid-Atlantic investment group to Preston Giuliano Capital Partners. Lance was with NAI Tampa Bay at the time of the transaction. � e deal involved a fractured con-dominium portfolio across three di� erent properties. “Analyzing other similar deals and understanding where market cycles are at with di� erent asset classes is critical to closing big deals,” he says.

“Doing large deals is only marginally harder than small

Big League DealsCCIMs hit a few out of the park this year.

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deals if you have the right team surrounding you,” says Richard Egitto, CCIM, of Inverness Properties in Engle-wood, Colo. Egitto represented Denver United LLC in the 15-year, $81 million lease of 161,218 sf of o� ce space in Lone Tree, Colo., to tw telecom. Egitto credits his relation-ship with his long-term client in helping to close the deal. He sold the client the building more than a decade ago and has played several roles with it ever since. “� e details” pose the greatest challenge, Egitto says. “� ese types of deals are very di� erent than standard lease negotiations. All aspects have to be handled with the utmost care.”

Dean Saunders, CCIM, of Coldwell Banker Commer-cial Saunders Real Estate in Lakeland, Fla., unknowingly initiated a large deal by gi� ing his own market report to an old friend looking for large tracts of Florida land. Saun-ders and a partner went on to represent AgReserves in the $565 million purchase of 382,834 acres of timberland in the Florida Panhandle from the St. Joe Co. � e deal made � e Church of Jesus Christ of Latter-day Saints, which owns the purchasing company, the largest land owner in Florida. Saunders credits his success with big deals to being con� dent in his expertise. “Don’t be afraid to let people know that you know your stu� ,” he says.

It’s also important to add value: Know the “nuances of the market and where a property � ts in,” says Duke Suwyn, CCIM, of Colliers International in Grand Rap-ids, Mich., who along with John J. Kuiper, CCIM, also of Colliers International, represented Franklin Partners LLC in the 15-year, more than $46.7 million lease of an 885,781-sf industrial property in Grand Rapids. Stanley J. Wisinski, CCIM, of NAI Wisinski in Grand Rapids represented the lessee.

Demonstrate persistence and tenacity along with full comprehension of a client’s needs, says Brett Sherman, CCIM, of Angel Commercial LLC in Southport, Conn. Sherman and a partner represented the Kowalski family in the more than $54.2 million sale of the 90,000-sf Vil-lage Center retail property in Westport, Conn., to Equity One. “Truly understand the role you play in the transac-tion,” Sherman says. “I like to say the broker is like the quarterback in the deal.”

Market Forces at Work� e improving economy is adding some much needed fuel to the � re for completing these large transactions. “� ere is a tremendous amount of equity in the market right now and the preference is to deploy it in larger amounts over fewer transactions,” Lance says.

Many CCIMs also cite limited supply as another factor contributing to clients willing to pay more for proper-

ties. But it’s a double-edged sword. “� e lack of inventory is making it very di� cult to � nd exactly what a client needs,” Wisinski says. However, it’s not stopping inves-tors from looking to diversify their portfolios.

Build-to-suit office development is also gaining momentum according to Egitto. “Capital markets are hitting on all cylinders, and the rush to get leases signed, buildings built and sold to developers, and sellers to capi-talize is as strong as has been since the mid-2000s,” he says. In addition, many companies are striving for space e� ciency and pushing for increased build-to-suit devel-opments, says Rasmussen.

Big Deal Advice What do these experts suggest for other CCIMs inter-ested in developing and closing big deals in their markets?

Make your client a top priority. “Put the client � rst at all costs,” says Sherman. Excellent customer service is essential in building strong relationships with clients to get deals done. “I try to put myself in my client’s shoes and always keep in mind what is ultimately best for them in all aspects of the deal,” adds Wisinski.

Take your time. “Big deals happen at the crossroads of experience, patience, and expertise,” says Lance. “Big deals have many moving parts and require more time,” adds Wisinski. “Each piece is extremely important.”

Don’t forget the “little deals.” Big deals will come but they don’t come right away, according to Saunders. “You still need the certainty of smaller deals to last a long time in the business,” says Egitto. “Stick with your clients: As they do bigger deals so will you,” he adds.

Engage with your peers and professional a� liations.It’s important to remember the resources already avail-able to you. “As CCIMs, we set the bar for each other. � e collaborative nature of the Institute — and the people who are a part of it — make us all better,” Saunders says. “I would not be who I am today without my a� liations like CCIM.”

It’s the CCIM designation that binds these deal mak-ers together. “� e level of sophistication in larger deals requires the same professional skills and concepts I learned in obtaining my CCIM designation,” Lance says.

So for CCIMs, moving up to the majors may be just a matter of re� ning your approach and looking for greater challenges. As Saunders notes: “When you want to get better at your sport, you play against the stronger teams.”

Stephen Rangel is communications coordinator for the CCIM Institute.

Brett A. Sherman, CCIMAngel Commercial LLCSouthport, Conn.$54.2 million retail sale

Christopher Caison, CCIMGrandbridge Real Estate CapitalCharlotte, N.C.$53 million fi nancing

Duke A. Suwyn, CCIMJohn J. Kuiper, CCIMColliers InternationalGrand Rapids, Mich.Stanley J. Wisinski, CCIMNAI WisinskiGrand Rapids, Mich.$46.7 million industrial lease

Peter P. Hegg, CCIMPaul O. Hegg, CCIMHegg Cos.Sioux Fall, S.D.$44 million fi nancing

Steven Medwin, CCIMJones Lang LaSalleMiami$42 million offi ce purchase

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