Wow, what a tremendous year. Not what you might expect to hear when the topic of commercial real estate comes up. This has been a very productive year, with an amazing amount of activity, which has in turn lead to real estate transactions. This may surprise you, as it seems most of what we hear and read about the commercial real estate market is less than positive.
Why have the past two years been filled with real estate transactions when we are being told the market is so bad? Typically when we hear the term “commercial real estate market” it is mentioned in a very broad sense. There are so many facets of a “commercial market,” including property type, office, retail, industrial, investments and land, as well as location, national or local – not to mention all of the local locations, i.e., southwest Boise, Meridian, Eagle, west Boise, and many more. All of these come into play when a buyer or tenant starts looking for space.
For example, I have yet to have a client, in my 25 years of leasing and sales, who didn’t have some criteria, therefore narrowing “their market” of options.
My client base is local and there have been a lot of leasing transactions this past year. The interest rates are low and the owner/user purchase market has been steady. So I would have to say “my market” has been great. It is always interesting and sometimes surprising how few options there are for tenants and buyers. Again, depending on the location, size of space needed, price they are willing to pay, layout of space, and term of the lease.
The past two years, 2010 and 2011, 75 to 80 percent of my leasing and sales transactions have been in Meridian. All but one or two have been in second generation (existing) built-out space and the lease terms have been shorter and deals are driven by properties that are priced to move.
One thing is for sure, we can’t control much in life and it doesn’t do any good to be obsessed, depressed, or distressed about those things. We need to focus on what we can control, which is how we respond to things out of our control. In fact if we think of the market as neutral, that clears our way to choose how we respond and make our own decision if it is good or bad. Just like the weather: When it snows some would say the weather is bad, but those who ski think it is good.
Winners decide their future rather than let external circumstances dictate their future. Jim Collins, in his book “Great by Choice,” says, “Today’s lack of stability and turmoil isn’t necessarily bad news for those who come at it the right way.” He goes on to say “uncertainty isn’t all bad, and we shouldn’t necessarily fear it as much as we do.”
He said he used to fear uncertainty and chaos but has learned to “not have any more emotion about it than gravity, gravity just is. I don’t wake up in the morning afraid of gravity. You’ve got to learn how to live with gravity; you have got to learn how to live with uncertainty. The beauty of it is you can, successfully and in very practical ways.”
Many successful companies started and have prospered during chaos and uncertainty. In the recent Idaho Top Private 75 Companies of 2011 the common message was: Have a vision, identify customer needs and opportunities, focus on customer service, and execute. Winners think about thriving versus surviving.
So in closing, I just want to say how grateful and blessed I am to be a commercial real estate professional in uncertain and chaotic times. (This isn’t my first experience with it.) It is in these times that you grow and become a better person, a better professional and have the opportunity to help and encourage others. That is, if that is what you choose to do. And I know you will – that is what winners do.
This guest commentary was written by Debbie Martin, principal and broker of DK Commercial Real Estate Services in Meridian.