AS PUBLISHED IN THE WAYNE B. SWEARINGEN REPORT
FEB. 2002 EDITION
In early 1990 I departed the brokerage firm that I had started in 1972. While I was establishing my new operating platform (Barclay Commercial Group, I received a call from longtime friend, Richard Rainwater. I had become acquainted with Richard while leasing the Sid Bass City Center project in Fort Worth. He suggested that we talk about what I planned to do in investment brokerage. We met in Fort Worth where he asked me to find office-building opportunities for him. He was planning to start his REIT, which later became Crescent Real Estate Equities, Ltd. Crescent is one of the few publicly held real estate success stories. My investor brokerage specialty was born.
In July, 1990, I became aware that the 955,000-square-foot Continental Plaza was going to change hands. With no exclusive, I positioned Rainwater to purchase the building directly from the seller and lender. Rainwater so valued the work I completed on his behalf that he happily paid a sizable fee for my work. I then adopted the term Opportunistic Brokerage. Since that time I have continued to perfect this unique and profitable specialty.
The following report is an analysis of the factors leading to and allowing this paradigm shift in our industry. For some of us, compact is better.
COMMERCIAL BROKERAGE IN DALLAS-FORT WORTH A HISTORICAL PERSPECTIVE
The Dallas – Fort Worth commercial brokerage industry has long been recognized for having the top professionals in the nation. That is true today.
In 1962, I began my real estate career by managing and leasing the developments of Mayflower Investment Company in Dallas. This included office and industrial buildings, shopping centers, apartment developments, residential developments, and water and sewer systems. I gained experience in site selection, development, construction, management, and leasing. This was my Ph.D. in commercial real estate. When I decided to enter the brokerage business, I joined Henry S. Miller Company and gave up salary for fees and commissions.
|In 1972 I decided to go out on my own and build a brokerage company model that, at that time, did not exist. We would specialize in office and industrial leasing, management, and sales. As that firm grew to more than 230 people over the next 18 years, we pioneered office surveys, tenant representation, project leasing, and many other practices that are standards today. But, strangely enough, I never stopped admiring the ability and versatility of the few successful single-person practitioners. These were the very small firms that allowed the principals to practice hands-on brokerage and not get bogged down in offices, training, growth, and all of the other things that distract from production. I found that I was in the people business and had gotten completely away from the real estate business. I personally wanted to get back into the real estate business.|
UP BROKERAGE IN A DOWN MARKET
click here for moreIt never ceases to amaze me when so many of my fellow brokers have bad years when the market is in a downslide or recession. My business always booms when the market seems to be in the tank. The Rainwater sale in 1990 was a good example of this. My first office building sale was in the late ’60s. This was a one-story building containing 80,000 square feet, located in the Lee Park area of Turtle Creek.
I sold the building to a user client, incorporating a newly developed spreadsheet technology showing projected rate of return over a ten-year period. I used a remote computer by phone. Then, in the early ’70s, during a major business recession, I sold a downtown office tower to Dresser Industries, a Preston Center tower to Dallas Federal Savings, and the Blue Cross Building in downtown Dallas to an investor. I didn’t notice that we were in a recession. Then I realized that, with the right mind-set and attitude, my business could be recession proof. And the same principles apply today. Bargains appear when times are bad, and there are always investors waiting for those opportunities. Here again it is known as Opportunistic Brokerage.
In OPPORTUNISTIC BROKERAGE, our job is to represent the purchaser and position our client ahead of this process.
We are the opposite of the packager.
In 1968, I completed my first tenant rep assignment, a 100,000-square-foot relocation into a build-to-suit for Texas Credit Union League and Members Mutual Insurance Company. To my knowledge, I was the only specialist in that field at that time. Today I continue this specialty.
Thanks to new technologies and operating methods, the single practitioner will often provide superior service in the investment brokerage field. Opportunistic Brokerage is the opposite of Listing or Packaging Brokerage. Major corporate changes and continued consolidation will lead to additional opportunities for the experienced professional to service companies as well as investors.
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