The Commercial Real Estate Investor Podcast

Key Takeaways:

Multifamily real estate, especially existing Class B and C properties, can be recession resistant due to people always needing a place to live

Healthcare real estate like medical offices is also recession resistant as people will continue needing medical care

Grocery-anchored shopping centers can perform well in recessions as people still need to buy groceries and other daily goods

It's important to underwrite conservatively, scrutinize tenants, and focus on acquiring assets that can withstand economic downturns through flexible leasing terms and creditworthy tenants

Strategies like locking in long-term fixed-rate debt ahead of potential downturns can help make portfolios more recession-proof

Key Takeaways:

- Seller financing, joint ventures, crowdfunding, and lease-to-own arrangements are alternative financing strategies that can be used to purchase commercial real estate without relying solely on traditional bank loans.

- These strategies can help circumvent strict bank qualification requirements like credit scores, cash reserves, and experience.

- Factors like current finances, experience level, the seller's situation/motivation, and flexibility needs should be considered when choosing a financing strategy.

- Being creative and persistent can open doors to capital beyond just banks to start building a commercial property portfolio.

Key Takeaways:

Tyler gave a talk on building a personal brand at a conference and is preparing for another talk at Brandon Turner's REI Summit about how to get started in commercial real estate.

He recently got approvals to start construction on his boutique hotel project called Salt Lick Ranch in East Nashville after two years of working on it.

He is considering hiring another assistant to help with community engagement and daily tasks.

He answered various questions about financial modeling, shopping centers vs apartments, deal flow generation, and other commercial real estate topics based on his experience.

Key Takeaways:

- Charging for brokers opinions of value (BOV) can help ensure brokers put more time and effort into the analysis, and get clients more invested in working with them.

- A BOV should include an in-depth analysis of the property through site visits, comparable property research beyond just Costar data, and a comprehensive written report.

- Presenting BOV work as having value for the client's needs, rather than just doing it for free, helps establish the broker's professional expertise and value proposition.

Key Takeaways:

Flex spaces are one of the easiest commercial real estate assets to own, with low vacancy rates and high demand

Developing flex spaces can be profitable if land costs are below $5/sqft and building costs are around $136/sqft

Underwriting deals with an 8-9% cap rate upon completion and an exit at a 7% cap rate can provide good returns

Selling deals allows investors to complete more deals over time for higher returns than refinancing

Flex warehousing provides easier ownership than multifamily due to triple net leases

Key Takeaways:

Tyler discussed the recent NAR ruling on real estate commissions and how it may impact home buyers and sellers. He had mixed views on the ruling.

Tyler shared updates on his recent trip to Buffalo and some of his upcoming speaking engagements and projects he's working on.

In the Q&A portion, Tyler provided advice to various commercial real estate questions from listeners regarding development projects, land ownership structures, and strategies for new investors.

Key Takeaways:

- There will likely be distressed commercial real estate opportunities coming up, but it may not be as widespread or at "pennies on the dollar" prices as some headlines suggest due to the large amount of capital on the sidelines looking to invest.

- Distressed opportunities will be very market-specific, with some markets like San Francisco facing more issues than growth markets like Dallas, Nashville, etc.

- Finding distressed deals may involve working directly with banks on problematic assets they want to offload, or approaching distressed owners directly for off-market deals.

- When evaluating distressed deals, it's important to underwrite the fundamentals of the specific property and market to identify upside potential.

Key Takeaways:

Commercial real estate transactions seem to be picking up based on the data Logan and Tyler presented from their brokerages. Pipeline values and number of deals are increasing.

It's important for brokerages to track key performance indicators and visualize data to understand where opportunities exist to improve. This helps brokerages be more strategic.

Developing an ideal customer profile helps brokerages understand who to target and how to craft their messaging. It also acts as a screening tool for opportunities.

Communication and sharing data visually with the team is important for motivation, accountability and understanding the brokerage's progress and goals.

Utilizing tools like CRMs, dashboards and email marketing can help brokerages improve processes and track leads better.

Key Takeaways:

- Tyler provided updates on projects being worked on at Peerless Mill, including a second version of the Wash project and plans for industrial outdoor storage.

- He discussed upcoming events like CCC in Nashville on April 25th and his guest appearance on Brandon Turner's coaching call on April 28th where he will discuss getting started in commercial real estate.

- Tyler answered questions about mastermind groups he finds valuable, partnering with sellers, and cap rates for self storage properties. He emphasized looking at the experience and track record of investment sponsors over projected returns.

Key Takeaways:

- Retail occupancy in Nashville is above 97%, showing retail's resiliency despite challenges like the pandemic
- Rents have been increasing, currently averaging around $27 per square foot but higher in areas like East Nashville
- Investment sales of retail properties have been occurring, though development of new retail space remains low at around 1.1% of total inventory
- Mixed-use and smaller footprint retail spaces around 5,000-10,000 square feet have been more attractive to tenants and landlords