The South Not Only Rise Again, It Won, Oh and More About Josh..Almost

Ann and I attended the Texas Dealmaking show and over 3,000 “Tall hats”
showed up to wheel and deal, nearly a 20% increase compared with last year’s
show. You can't ask for more than that, especially considering it was only
five or six years ago that the show attracted only 750 or so dealmakers.
High energy is the only way to describe this event. Texans love dealmaking
and socializing, and they do it well. Here's another market in which small
developers excel. The South seems to be an area that smaller developers
love; they’ve found a niche that the REITs can't touch. They may never be
Kimco or DDR, but they live the good life and have fun -- a great way to
make a living. The only real complaint we heard at the show was the lack of
“real” retailers, and that seems to be the rule at most events, so get over
it. The broker has become the mainstay of dealmaking for many, if not most,
retailers and you're going to pay that commission, like it or not.

Another change I noticed at this and most shows is that the actual
dealmaking is lasting longer. In the “old days,” if the dealmaking started
at 8 a.m., for all practical purposes, it was over by 1 p.m., even if the
official closing time was 3 p.m. or 4 p.m. Now, the activity goes on ‘til 2
p.m. or 3 p.m. So, people are staying longer and hopefully making more
deals. I had one interesting conversation with a developer who had just
finished building a Starbucks. He wanted to know what I thought the CAP rate
could be. I responded with a 6.2% to 6.5% rate. He said that's what his
friends are telling him, he just didn't think anyone was that dumb. I agreed
with his outlook but said there's a lot of dumb buyers out there. Anyway,
moving on, Josh and I went to the Atlanta show, which was larger than Texas
with about 4,000 dealmakers compared to last year’s count of 3,500. (It’s
almost getting boring to announce all these increases in attendance. I'm
warning you in advance: The New York show in December will be a nightmare;
there will be way too many people.)

The energy level of the Texas show was higher than Atlanta's, but the
attendees still did their share of "dealmaking." Like Texas, Atlanta has a
lot of smaller developers and, like Texas, their biggest complaint was the
lack of real retailers. Atlanta has their “Retailers” show the day before
the actual dealmaking and I’d guess they had 40 to 50 retailers exhibiting
at this busy event. But, my gut tells me that the amount of retailers
exhibiting was less this year than last. BUT, that didn't stop the wave of
developers/brokers stopping by each booth hoping to do a deal. The cocktail
party in Atlanta was jammed and most people in attendance had dinner
invitations for various gatherings right after the show. So, there were a
lot of tired people the next day, which explains why the show got off to a
slow start on Wednesday. BUT, by 10:30 that morning, the trade floor was
hopping and stayed that way until 30 minutes before closing.

I did hear one interesting tidbit: It seems that the government of Puerto
Rico has sent letters to the major retailer developers on the island saying
they are about to start an investigation into the possibility that these
landlords are gouging the tenants on CAM and electrical charges. Talk about
a disaster looking for a place to happen. Now, I'm totally opposed to owners
making more than nominal amounts of money on CAM, taxes, etc.; their profit
center should be the rents. BUT, I'm also a great believer in, “The
government that governs least, governs best.” Let’s hope the developers do
something before the government does. Otherwise, it might give some ideas to
states in the U.S., and then we all lose.

Changing subjects, as you are aware, I've been chronicling the “Adventures
of Josh” since he joined the company going on 5 months ago, and I have to
admit, it’s becoming LESS frustrating (but still frustrating) while trying
to teach him the business. Well, I guess my remarks struck home to a lot of
people, since we received LOTS of e-mail on those MyWay's. Here's two, which
are typical of the rest:

Ted,
I just started in the real estate business a few months ago and enjoy
reading your articles. I am in the same boat as Josh and can understand what
he is going through. (Cold calling, asking what seem to be logical questions
to a higher authority.) I, however, disagree with the statement that we have
to be taught EVERYTHING. It’s not that we don't know how to fax or pick up
business cards, it’s that we understand that our superiors are succeeding at
what they do and we want to learn their style to emulate them. I think it’s
a good thing that you have new workers craving to learn more and more each
and every day. You should see that and be excited to teach them. This is
your passion, isn't it? As for me, I guess I am getting the best of both
worlds. I am starting out like everyone else does, however, I think my
bosses have a different view, one tailored more to getting me to their level
and watching me succeed. I think their reply to your friend would be, “Do
it, and find new possibilities.” We are not embarrassed. If we were, we
would sit at our desk waiting for you to come to us. We are seekers, ready
and willing to combat new things each day. I for sure know that if I don't
ask questions, I won't succeed. For you it's “Location, Location, Location.”
For me, it’s “Questions, Questions, Questions.” Shouldn't you always ask
questions before you worry about a location? In closing, I think we are an
asset and need to be accepted. All those VPs who are training should
understand and be willing to teach because I am sure, back in the day, those
were the guys bugging their bosses up the wall.
Tom DiCicco
Database Manager

Ted,
I read your articles in every issue of Dealmakers and, typically, they're
perfectly written and have humor to them. This is something I appreciate and
like, since sometimes I feel this industry lacks some comic relief and tends
to be too serious too often. Having said all that, your article about Josh,
while well taken and a point probably shared by many seasoned
brokers/retailers, has some “holes” to it. I started in this business just
over six years ago, when I was 22. Now, my story is somewhat different in
that my father has been in this industry since 1981. Because of that, I had
a very small and limited knowledge of this business when I started. I, too,
however, needed that training to get the necessary knowledge to be
successful. Here was the key that helped me become successful:

Our company is a very small company in terms of number of employees.
However, we compete on a larger scale with the likes of the Mid America's
and CB Richard Ellis’s of the world. Our inventory is massive compared to
the amount of people we have that work the brokerage end of this business.
Currently, we only have three brokers here, including myself. When I started
here, there were only four: The three principals of the company and one
other broker. Since my father is the President and principal of this
company, he certainly had no time to train me each and every day. His
partner was and still is equally as busy as my father. The third principal,
too, was busy doing her own thing.

My job was simple. I began as Database Manager here. I took an “old school”
3-ring binder crammed full of years and years of contacts (both locally and
nationally) and computerized them. Now I didn't just type them in a
computer, I called each and every one of them. Some were long gone and no
longer in business, but most were still active. Throughout my life, my
father has always preached to me about work ethic and striving to be “more
successful than he is.” Obviously, that is a typical statement and wish from
a father to his child. So, for as busy as my father was, he always took the
time to tutor me because, not only was I an investment to him personally as
his child, I was and still am an investment to his company. Additionally,
this was his way of training me. He put me on the phones making calls,
getting to know who people were, learning terms of the business and getting
my own name out there.

See, that is what the “elders” of this industry need to realize: Young
newcomers in this business are not a pain in the neck. We're an investment
to the companies we work for. We're not just around to bug busy brokers to
ask questions. We're here to soak in the knowledge from them. The one thing
I will always do is, when someone young enters into this business, whether
it be a friend or just someone coming to work at our company, I will always
take the time to talk to them and give them as much help and information as
they need. I needed it when I started, so will they.

Remember this, at some point or another, we (meaning all of us in the real
estate business) were all in the same boat. I'm sure you were when you
started in real estate, and I'm sure there was someone there to tutor and
mentor you along the road. That's why CB Richard Ellis is as successful as
it is today. It seems as though the majority of seasoned brokers from the
Baby Boomer era all started at CB (formerly, just Coldwell Banker). They had
it down perfectly. Each new entrant into the business “ran” for someone who
was seasoned. My father happened to get his first real estate job with CB,
and the man he “ran” for taught him some valuable lessons, which were passed
down to me.

All in all, let's take it easy on the young newcomers because one day, we
will be the generation that is the majority within this industry. And again,
I know for sure that when the next wave of young sales people come through
when I am old and have many years under my belt, I’ll be sure to fill them
up with as much knowledge as I can!
Jason R. Lenhoff
Horizon Realty Services, Inc.






Nick D'Amore