Exploiting Opportunity in CRE Brokerage

OK, thanks for the input--sounds like you have some good opportunities ahead, both with your current job and with your family. Overall, I think your intellectual curiosity (especially at your early career stage) and drive (plus the fact it sounds like you work for a great boss and are getting great experience) bodes well for your future. Whatever you do, DON'T STOP LEARNING! Most businesspeople I admire (Fred Smith of FedEx) say they spend a lot of their time time reading and absorbing--which makes them better equipped to deal with what's coming around the corner.

A few thoughts on your questions:

1) "What specific skills/experience would you place emphasis on developing?"

Learn to think like an investor (a lot of blog posts on WSO echo this)--It sounds like you are well on your way.

The flip side of this is don't be a "dumb" broker who never thinks beyond getting your cut (you don't sound like this type of person). If you can do this, you will be an asset to your clients and build your skills and reputation. What do I mean? if you have a dollar to invest, like your clients do, why should you (or they) put it in retail CRE? is it better put in hotels? Industrial? Stocks? Bonds? Cash? Look for the highest and best return on money invested--that is what your partners will be doing. They are paying you for results, not advice (I assume). This will also pay off when you do acquisitions with your family.

So, how to think like an investor? I think the best and cheapest way (without working for an investor or doing an MBA, etc.) is to read Buffett's letters to shareholders--all free on the BRK website. A mentor of mine who went to HBS (for what it's worth) said reading all of them is just as good as business school (sure, easy for him to say, but the letters are incredibly well-written--he writes them so his non-quant aunt will understand them--, often funny and VERY educational). Thre is a book that breaks the letters down by subject, making the reading easier--I think it's Lawrence Cunningham--just make sure you get the most recent edition. There is also a great YouTube Clip of Buffett speaking to the U of Florida (in 1991?) where her talks briefly about how he looks at owning CRE and REITs. I found it very interesting.

A related part of this is to build trust...you are investing in your career for the long term with (ideally long term) investors. I think many "dumb" brokers don't think past their commission--if they just get paid to sell industrial CRE, then they will try to pitch it to customers even if it's not a good deal for them. And if you are willing to tell a client it's not a good deal (and possibly forgo an attempt at a commission) you can build a lot of trust.

2) Think Big Picture.

Closely related to "Think Like an Investor" What are the technological/social/demographic trends that are happening that will affect CRE? And your investors? As someone once said, "Demography is destiny"--or as Barry Sternlict said on a Bloomberg Interview (I paraphrase here) "if you buy CRE in a place where there is demographic growth, growth can bail you out [of potential problems/dips in the cycle, etc]". Many people are flocking into cities and out of suburbs--so what does this mean for your clients? The fact that after the 2008 crisis, you have seen a lot of offices shrink sizes and shared office space like WeWork grow rapidly--and a growth in demand for small food-truck-size retail food spaces (at least in my city). What does this mean for your clients? Or put another way (also by Barry Sternlicht)- an entrepreneurship professor of his told him (as career advice while he was a student) to "Get on the freight train of your life, not under it". Massive demographic shifts (baby boomers selling suburban houses and going to big cities to rent, for instance) are an example of the freight train. Help your clients get on it (and enjoy the ride with them--hopefully profitably)!

3) "If you were in my shoes, would there be anything in particular that would you try and get your hands dirty with?"

Build barriers to entry in your business--by locking up clients. Brokerage is so cut-throat because there are no barrier to entry and everyone is scrambling for the same pie (IMHO). I work for a retail developer in a large US city, and we work with a very successful broker at one of the firms you mention above. Part of the reason this broker is successful is that the broker reps more than one national firm--one a grocery store that started out on the opposite side of the country. This broker I assume saw the grocery store was growing, and before they reached our city, reached out to them and built rapport. Now she has prestige because she reps a quality, credit tenant--and has a (relatively good) barrier to entry in the brokerage world as she is the go-to person for this firm in our city. Now, as a B-school professor of mine once said, barriers to entry (once built) are constantly being eroded--and this is no different. The broker still needs to deliver for the client, (and of lesser importance),send champagne (I assume lots) at the holidays, remember birthdays, etc. Get known as the person who successfully repped a chain, and that can help ensure an income stream and future opportunities--even if it involves switching sides and working on the Real Estate team of that chain. And looking at small, growing companies people haven't heard of yet is probably a good idea, as they are not picked over by brokers yet. Remember, when Sam Walton started out, he had a small chain of discount stores in the Midwest, while major companies like Sears had better credit and were generally much sexier (they had just built the Sears Tower, etc.). Most brokers then probably would prefer to chase after Sears (or some other big chain) first. Remember what Wayne Gretzky said: "I don't skate to where the puck is--I skate to where it's going to be."

Good luck--and PM me if you have any other questions.