The commercial real estate industry is constantly changing. Navigating and thriving in that world requires expertise, education, stability and knowledge.
Certified Commercial Investment Members earn their designation as CCIMs through extensive and ongoing education, and submission of a portfolio of real-world deals. Before they ever guide a client through a transaction, they’ve proven their skills.
In 2020, Southern Nevada CCIMs braced for a devastating year as businesses in all CRE sectors closed in response to the pandemic.
Devastation didn’t happen. Instead, CCIMs found themselves busier than ever as clients turned to them for expert guidance through a changing market.
“At the beginning of the pandemic, things changed dramatically, and we took on an advisory role for tenants and landlords, on how to weather the storm, how to best accommodate tenants so that they could survive and thrive once things turned around,” said David Bauman, MDL Group, CCIM programs chair. “I don’t think I was ever busier in my career as I was three months after we shut down.”
Investors, owners, buyers and sellers, landlords and tenants expected a hard economic downturn. Some sectors, like gaming and hospitality, restaurants and retail, experienced just that.
Even in such unique circumstances, CCIM professionals helped clients navigate the suddenly changed market. Helping CCIMs themselves was the CCIM Institute.
During the start of the pandemic, the CCIM Institute developed a COVID resource page,” said Robin Civish, ROI Commercial Real Estate, CCIM communications committee chair. The resources page listed information geared to helping CCIMs help clients. CCIM Connect allowed CCIMs nationwide to discuss best practices for assisting clients in dealing with unfamiliar events like force majeure clauses which were activated last year. The Institute created free refresher courses for getting back to basics and dealing with situations CCIMs hadn’t encountered before.
“A broker who has achieved the CCIM designation is better equipped to help clients weather economic shifts due to the level of education and expertise that CCIMs possess,” said Amelia Henry, Logic Commercial Real Estate, CCIM scholarship chair. “As CCIMs we’re trained in financial, market, and strategic analysis along with investor and user decision making. This level of expertise and training allows us to analyze the big picture.”
Real World Education
CCIM designees possess the knowledge, stability and expertise to help clients weather economic storms. Relationships made through membership allow networking nationwide with other CRE professionals.
“I can call any one of my instructors, my competitors, or my associates, and know, first, they’ll take my call. Second, they’ll assist and support me without judgment. The end result is the highest degree of council to ensure our real estate community is held in the highest regard,” said Carole Cline-Ong, MDL Group, CCIM past-president.
Working a deal with another CCIM means knowing that person understands the market. “There’s an ethics code that CCIMs live by, so you’re working with someone who’s going to be ethical in their dealings,” said Bauman.
Even if a CCIM hasn’t experienced an economic disruption or downturn themselves, they probably can connect with someone who has and can lend guidance. Having the tools to navigate sudden changes is valuable for clients, and good for the industry.
Tools and Education
When it comes to forecasting the CRE market, CCIMs have the advantage of nationwide networking with industry professionals, and the tools to understand market fluctuations and take advantage of them. Networking and expert data and analysis are standout tools, as is access to the knowledge of experts in related fields.
“We have our own CCIM Institute Chief Economist K.C. Conway [who gives] quarterly webinars and updates to our members,” said Civish. There’s also the Institute’s portal software called Site to Do Business, which provides chapter members with social media and marketing training.
Earning the designation requires four core classes, the ethics course, and elective classes taken through the Institute. Candidates submit a portfolio detailing actual deals. The comprehensive exam at the end is similar to an attorney passing the bar, but CCIM designation is voluntary; CRE professionals can practice without it. That level of dedication is one reason the designation is so well respected in CRE.
“This is 100 percent elective,” said Bauman. “When you see someone with the designation, you know they went the extra mile.”
As recently as 2004, CCIMs met in person with clients and walked every property. That was already changing when COVID made face to face impossible.
“Today it’s all virtual, everything is Zoom,” said Adam Gregory, CommCap Advisors, CCIM president. “The younger generation coming up will be better suited to that than those of us that have been here longer. They’re more comfortable emailing and texting. I get an email from somebody, and I immediately pick up the phone and call them.”
Quarantine forced professionals to get comfortable with new communications technology and gave them the time to do it.
“There’s a lot of really great software programs that offer mapping, demographic data, analysis reports and even risk reports, so by combining our real-world education with technology, CCIMs are able to add value for our clients,” said Cline-Ong.
The technology available to CCIMs is also available to their clients. That doesn’t mean navigating CRE has become simple. One benefit a CCIM can provide is interpretation of the information available, because everything isn’t always what it seems.
“They don’t always know how to decipher the information,” Bauman said. “One tenant wanted to show me there were thousands of available spaces in the Las Vegas market when in actuality there was probably only about a dozen that would actually meet his needs.”
That kind of misunderstanding can create mistrust. “That’s why you need a professional to help you find the right space and eliminate the waste of time so you can get back to work,” said Bauman.
“Our clients have a lot of information at their fingertips,” said Civish. “It’s our role as a CCIM to understand the information they have and make sure we are still the experts in CRE. There are more and more tech companies rolling out products that will help us provide our clients with more real time analytics to ensure they are buying in the right location and the right time for the right price.”
CCIM’s Ward Center for Real Estate Studies keeps CCIMs current with industry changes. The Members Advantage Program provides them the newest technology services. CCIM Institute offers courses on development, site selection, financial investment tools, market analysis, tax issues, and professional growth.
“If you need it, we probably have it,” said Civish.
Expanding the Tradition of Excellence
“I like that we have a 50-plus-year tradition of excellence within CCIM, and we still have a high bar for designees, so it’s not simply anybody can do it if you just pay your fees,” said Andy Crawford, CommCap Advisors, CCIM designation promotions chair. “That allows us to make sure we have quality designees capable of and qualified to write the next chapter.”
Bobbi Miracle, Commercial Executives Real Estate Services, CCIM president-elect, is a former chapter president, returning because the designation has meant so much to her career. She wants incoming designees to have the same experience.
“We’re one of the biggest chapters in the country, and one of the most successful,” said Miracle. “So, to continue growing it, that’s essential.”
Good leadership is a mix of new ideas and history, said Miracle. As past president, she’s bringing back some history.
The board wants the “new ideas” part of the mix to come from new designees taking leadership positions.
“It’s time for them to step up, get on the board, and move the chapter not in a new direction but to the next level with that fresh blood,” said Gregory.
Gregory earned his designation in 2008 and got on the board in 2009. Being on the board helps CCIMs network and build relationships. Now Gregory’s ready to see the board entrusted to new hands.
“It’s important to me because CCIM is important to me, to leave having been president, as opposed to just leaving the board,” Gregory said. His term coincided with COVID. Having created a business plan detailing what he wanted to achieve, he didn’t know if any of it was feasible. “Some presidents spend their whole term weathering [an economic] storm. I thought my year was just to keep us afloat and Miracle would come in and build us back up.”
When the CRE market didn’t crash, Gregory turned his attention to expansion.
“We’ve pinned seven designees in the past 12 months,” Gregory said. Over the next six months he wants to bump membership and hold as many events as possible. “That’s what I’d like to see for the last six months of my presidency. Make changes and expand the chapter.”
Writing the Next Chapter
What should a newly pinned CCIM expect? They should expect an ever-changing market, new technology and new challenges.
“New brokers and CCIMs should expect there to be challenges in the beginning of their career,” said Henry. Like any business, it requires hard work to create momentum and keep it going. The industry needs more technical analysis and people who understand the financial aspects of the deal as well as sales, said Bauman.
The Southern Nevada market is changing as brokers with 30 years experience retire and younger brokers emerge into the field. Programs like the Institute’s Cultural Diversity Education Program encourage more minorities to enter the profession.
“The next chapter for our local CCIM is to continue to build our membership base and recruit a younger, more diverse group of real estate professionals,” said Henry. “I wanted to be on the board of directors because representation is important. I feel if other young minority women see myself holding a position on the board it will encourage them to get involved in CRE, join the chapter and hopefully take on a leadership position, as I have.”
“I’ve had the opportunity to work with designees all over the country, and really work with the candidates coming up to be pinned and the new people getting involved,” said Miracle. “With a bit of direction, the new [designees] will take our CCIM designation and make it ten-fold of whatever we were before. With the new vision of the designees coming in, and how the industry is changing, it will make everybody better at what we do, and more successful.”
Commercial Real Estate Market in Southern Nevada Post Pandemic
Retail and Restaurant
“Retail has been challenging for a while with the Amazon effect,” said Civish. Online ordering multiplied ten-fold during the pandemic, speeding up the need for retailers to adapt to customer behaviors.
Shopping centers with experiential anchors—gyms, salons, businesses that require customers to physically visit—were created to draw customers and were the exact kind the pandemic closed.
“We saw that come to a grinding halt,” said Gregory. The sector is coming back, but slowly. “You’re paying a premium to do a retail deal in today’s market, compared to an apartment or industrial deal, at least here locally. That was the biggest change I saw.”
Retail is changing, physical stores are adapting and online stores are expanding. And despite the predictions in Q1 2020 that non-chain restaurants were doomed, the question Civish gets the most is, “Do you have any 1,500-sf second-generation restaurant space?” The answer is no.
“The last recession taught landlords and tenants to work together,” said Civish. “We always saw this as a short-term change and both sides worked well to make sure that when it was time to reopen, there were still tenants to do so. I am as busy now as I have ever been in my career.”
There’s been minimal turnover in retail, said Henry, who specializes in retail investment sales. “It’s really a direct result of the eviction moratorium and landlords being willing to work with tenants that were hardest hit during the shutdown.” Which means Q1 2021 retail vacancy rate was 7 percent, only slightly higher than 6.5 percent for the same period last year.
Henry predicts continued strong demand for warehouse and distribution space in Southern Nevada, and that retailers will continue to shift toward e-commerce. As unemployment decreases and consumer spending increases, Henry expects continuing stability in retail and multifamily, in part due to the housing shortage and increased interstate relocation.
“The market is incredibly dynamic right now,” said Bauman. Southern Nevada remains an attractive option for California businesses. There’s historically low vacancy in industrial, and the office market came through better than expected. Where Bauman expected more distressed properties and fallout, the market is healthier than it was before the 2008 recession.
Some of the resilience in the office market stems from employers’ need to increase space between employees, post-quarantine. Rather than downsizing space even if staff was downsized, they’re keeping what they have. Other office users who couldn’t get out of a lease subleased.
Time for a Refresh
“In general, it’s as busy as it can be,” said Miracle, who specializes in leasing and sale of office, medical, retail and industrial properties. The Las Vegas CRE market is on a growing trajectory, with businesses relocating from other states. It was hot before the pandemic hit, and it continues to be healthy in the aftermath. Anyone willing to work is busy.
“There are people wanting to relocate, businesses wanting to expand or contract, and/or just get new, fresh locations,” said Miracle. “A lot of people just want a fresh start.”
Rather than a fresh start, some businesses are just starting. One client signed his lease on 6,500-SF of retail two weeks before the March 2020 shutdown. “Nine months later he finally opened and he never complained about having to pay rent before being open. He just paid the rent and did what he had to do,” said Jakke Farley, Mountain West Commercial Real Estate, CCIM newsletter chair.
Farley, who works in retail and office, both tenant rep and non-tenant rep, said spring 2021 was crazy busy and depending on the type of client in the retail sector, she advises clients not to wait.
“COVID is not really stopping the risk takers from taking the risk,” said Farley. “You’re going to miss out if you don’t take the risk.”
For Gregory, 2020 was a good year, driven by interest rates at historic lows before the pandemic. Once the pandemic hit and rates dropped almost all the way to zero, even conservative lower-level borrowers became active, wanting two things: The extremely low interest rates, and as much cash in pocket as possible so in the event of a serious downturn, they could scoop up new properties.
“We’re a commercial mortgage banking firm,” said Crawford about CommCap Advisors. “We represent institutional lenders for a whole variety of income producing properties.” Those properties are within the four main sectors: office, industrial, retail and multifamily.
How did mortgage banking survive the pandemic? “By the nature of my workload right now, it’s bonkers,” said Crawford. It’s hard to tell how many of the inquiries are legitimate, or feasible, given the leverage buyers want and the fact that lenders haven’t relaxed underwriting standards just to get money out the door. But demand is high.”
Demand is high and the CRE market is healthy. It’s a good time for CCIM to write the next chapter.