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Baseball, Commercial Real Estate & the Big Game 👨‍🚀⚾️

I went to a Twins game not too long ago with a few friends I met through commercial real estate. Sitting in my seat at Target Field, I watched the game play out. Although, I know the general rules of the game (we only played street baseball back in the day 😀), I realized that there were subtleties going on that I don’t know. My son plays and the more he gets into it, the more I want to learn. Not as a fan, but because I’m a parent of a kid who loves baseball. ⚾️


Target Field, Twins game, and Carlos Correa's stats on the board.

I wondered when people pass by buildings (on their way to a ball field, gym, work, etc.), do they think about all that goes into keeping that building standing? Wonder who owns it? Do they realize the depth needed in the dugout (see what I did there 😆…learning) to keep the property functioning as a business?  There are a lot of things that happen behind the scenes, which surprises people new to the commercial real estate business. Brokers (and investors) starting out will experience learning curves. Here are my top five:

 

1.      The art of negotiation is a critical learning curve for new brokers (rookies). Ninety percent of making a deal work has nothing to do with emotion. It has everything to do with the numbers. It’s a broker’s job to figure out creative ways to make the numbers work for both parties in most cases, but specifically for their clients. Having an experienced team to offer guidance is essential for them to confidently navigate a deal. A strike or a ball is determined by the ability of a broker to know how to find that common ground. Pinch hitters come in handy.

2.     The commercial real estate business is a small world and burning a bridge can mean a losing record. It’s a relationship-oriented business where brokers mutually share what they have, what they need, and what’s available. For the players, it’s all about needs and wants and honest communication between them is critical to make a deal happen and another mark in the win column.

3.     The rules of the game in commercial real estate can be complicated. Brokers need to understand statutes, regulations, and zoning laws for each city and state they do deals. Leases are designed to protect both teams (owners and tenants), and each have their own protections from risk. The nuances can be complicated, so here, brokers are more like  umpires making sure play is fair.

4.    The game begins when a client reaches out to a broker and ends when a deal is done. Think of a lease cycle as 9 innings and a sale cycle goes into extra innings. A new broker can expect out of 100% work, only 10% may close. The rest are still singing, “Take me out to the ballgame” in the 7th inning. It’s an adjustment for new brokers and sometimes they’re left battling a feeling of failure. I think of those batters having a rough day. They keep swinging, knowing at some point, they’ll hit the ball. It’s important for rookies to have a support system in order to swing through the rough patch.

5.     Once they hit a home run, the payoff can be big –– especially if the bases are loaded. Although it can be tempting, I advise to not blow it all in one place. New brokers need to be smart about how they manage incoming cash and plan for those dry spells. With a good batting average, I suggest brokers move from the minors to the majors and learn about commercial real estate investing. You can read my CRE investment blogs here.

 

Levi, playing first base, is about to catch the ball for, "Batter out!"

Conclusion

The best way to learn a game is to get in the game. As with any profession, rookies need to find a good coach to help work through the learning curves. You don't want to be out at first. Really, we all need a great coach in life to make it to our World Series. 🧢 (I’ll have to check in with Levi and see how I did with my baseball analogies. 😆)


Levi in his baseball uniform wearing shades, waiting at first base to get the batter out.


Proud pappa

Jeff Salzbrun is the owner/broker of Commercial Equities Group (CEG). As a veteran-owned real estate brokerage, CEG has been involved in thousands of sale and lease transactions, ranging from single offices to 250,000+ square foot buildings. At CEG, we get your deal done. We know space, and we know the CRE business.

 


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