4 Reasons CRE Investors And Developers Should Work With A CCIM
Despite the uncertainty in the U.S. economy, commercial real estate remains largely resilient. The multifamily, retail and industrial sectors are all strong, and there are several strong investment opportunities in these markets, as well as in workforce housing, office and more.
Of course, these opportunities aren’t worth much if investors don’t know how to take advantage of them properly. From selecting the wrong site to making zoning errors, several things can go wrong when looking to buy, sell, lease, finance or develop commercial real estate.
This is why it is important to work with a CRE professional who fully understands the ins and outs of the industry. According to Steve Rich, Colliers Charlotte director of retail services, there are no more knowledgeable CRE professionals than those who have earned a Certified Commercial Investment Member Designation, or CCIM.
Rich is the global president of The CCIM Institute, and he said that to earn a CCIM Designation, a professional needs to not only have a vast portfolio of CRE experience but also take four designation classes, a negotiations class and pass a final exam.
“It’s like earning a master’s in CRE while also proving that you have expertise and experience,” Rich said. “There are no easy deals in CRE, but CCIM professionals are people with a proven record who know how to successfully complete a transaction.”
Rich said that research shows that, on average, CCIMs close 42% more transactions each year than those without the designation. He spoke with Bisnow about why people who are interested in making the most out of the CRE market should work with a CCIM.
Benefiting From Education And Experience
The coursework needed to complete the designation includes a rigorous financial analysis course, which covers time, value, money, net present value, debt coverage ratio, discounted cash flows and evaluating hold-sell decisions. The market analysis course focuses on supply and demand and competitive positioning.
The user decision analysis course teaches how to identify key market drivers, such as labor force, customer access, regulatory environment, supply chains and whether to lease or own. The fourth class, investment analysis, brings everything together with lessons on forecasting future cash flows, appreciation, tax implications and more.
All this knowledge sets CCIMs up to help their clients make the most informed decisions and avoid common pitfalls that can come with CRE transitions, Rich said.
Avoiding Pitfalls
Rich said there are several common mistakes that CRE investors and developers can make that a CCIM can help them avoid. For example, selecting a bad location or site.
“There are several things to consider when analyzing a site, including labor force, growth patterns, absorption, gap analysis and financial feasibility, to name a few,” he said. “A CCIM designee has this expertise.”
Uncovering Opportunities
Rich said that thanks to the tools he has access to and the knowledge he has gained as a CCIM, he can help clients unlock new, more lucrative opportunities. He spoke about a client who is a franchisee for a national sub sandwich chain who was looking to open a new shop.
Rich conducted a retail market potential analysis of the trade area his client was looking at and discovered that 92% of the people had visited a fast-food restaurant in the last six months. While that number is typical in the U.S., he also discovered that 18% of people in the area had ordered delivery from a fast-food restaurant, which was 48% more than the U.S. average. He also discovered that within a mile of the space his client was considering, 35% more people than the national average were going to sub or deli-style restaurants.
“This additional information allowed my client to better understand the location and potential success of his restaurant,” Rich said. “I am confident the information I provide him is why he has been a client of mine for over 20 years.”
He said that when analyzing the CRE market overall, he has noticed many national retail chains are reducing the size of the brick-and-mortar spaces and blending them with e-commerce and curbside pickup. He is also seeing a rise in experiential retail, where stores are implementing everything from pickleball courts and adventure courses to wedding venues in their spaces to draw in customers.
Utilizing Proven Expertise
The bottom line is that when clients work with a CCIM, they can feel confident that they are working with someone with proven expertise in CRE, Rich said.
“A CCIM has the education and the experience in CRE to get complex deals done,” he said. “CCIMs don’t just complete more deals — they help their clients minimize risk and maximize value.”
This article was produced in collaboration between Studio B and The CCIM Institute. Bisnow news staff was not involved in the production of this content.
Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.
