Retail Chatr Commercial Real Estate Blog

I’m not sure I have the words to describe this.  I will say that I am constantly amazed at how many people operate in our industry that have absolutely no clue what they are doing.

WTF?  In 19 weeks the property should be free!

How exactly does this headline help get this property sold?  Way to create a sense of urgency and spark that coveted biding war.

We really need governance of minimum aptitude levels in the CRE industry.  First Fresh & Easy’s real estate director and now this guy.  This is getting ridiculous.

This is a quick (7 minute) video by Carmine Gallo outlining why Steve Jobs is such a captivating speaker.  There is nothing earth shattering here but sometimes it is the simple things that make all the difference.  I could not help but think about how this relates to how I present to both sellers and buyers.  I am often told that I am very enthusiastic about selling, often speaking quickly and using “wow” words like amazing and awesome.  Enthusiasm and excitement about the product you are selling is contagious.  If you are presenting to another broker, you don’t want anything to be lost in translation when they present to their client without the benefit of your presence.  Make sure you convey exactly how you feel about the property you are selling each and every time, no matter how monotonous it may become.  I firmly believe that each time you recite your pitch on a property, it gets more and more refined and more and more clear.  Don’t underestimate any lead that comes into your office – sell with enthusiasm at all times.

I just had to post this.  I just closed a Fresh & Easy ground lease that was purchased by Fresh & Easy on 12/31/09.  Earlier today, we sent out an email blast announcing the sale of the property.  I received the following email (with his attorney cc’d as well) from UK transplant Tom Scorer, Real Estate Director for Fresh & Easy at 3:25 PM this afternoon:

Chris,

I have received your email blast directly and from many other sources.

The executed PSA contains a confidentiality clause, which clearly prohibits the publication of any details of the deal without our express  permission, which was not sought and is not given.  See below the relevant extract from the agreement:

Please be advised that your publication breaches the recorded agreement.  We are considering the action we will take.

Kind regards

Tom

Tom Scorer

fresh  & easy Neighborhood Market Inc.

Real Estate Director

310-867-0418

———— Disclaimer ————–
This is a confidential email.
Fresh and Easy may monitor and record all emails. The views expressed in
this email are those of the sender and not Fresh and Easy. Fresh & Easy
Neighborhood Market, Inc. 2120 Park Place, El Segundo, CA 90245

Naturally, I could not resist responding to such foolishness.  Here is the email I sent back to the bloke:

Tom,

This is one of the most ridiculous emails I have received in my career.  Your claim is a joke and without merit.  I don’t really think I need to explain why but I will do so anyway.

You (on behalf of Fresh & Easy) went out of your way to circumvent my involvement in this transaction, specifically refusing to include language in the purchase and sale agreement protecting my position and specifically refusing to have brokerage representation in the purchase.  As a result of your efforts, I am not a party to your purchase and sale agreement and am therefore not bound by its terms.

The property was marketed for sale for well over 1 year prior to your purchase.  The terms of your lease agreement are widely known.  The date, purchase price and identity of the purchaser are public knowledge.  If you take a moment to read the language of your PSA that you so kindly provided to me you may notice that particular phrase stating "to the extent reasonably practical."  I would think that information that resides in the public domain would fall outside of this clause, don’t you?

Lastly, I would think that any claim you may attempt to make would need to be based upon actual damages.  Do you have actual damages?  You may want to brush up on your US law.  Your attorney is a very good one.  You should consult him before sending out emails like this again in the future.

At this point it seems like you may just be wasting your company’s cash on unnecessary legal fees.  Maybe I should copy your superiors in the UK.  I’m sure they would love to hear how you are spending your time these days.

Thanks for the new blog content.  I haven’t written a post in quite some time.  This one should be up shortly.

Cheerio!

Chris

P.S. – As a point of clarification, I did not consult any person or entity which was directly involved in this transaction in preparing my email.  I did not, nor am I required to, seek approval from anyone prior to sending the announcement.

Tom, instead of threatening brokers with lawsuits, why don’t you focus your attention on opening stores that actually attract customers?  Don’t you think that might be more productive and beneficial to the bottom line?  Just a thought.

For the record, the property was a ground lease.  The leased fee interest (land) was purchased by Fresh & Easy on 12/31/09 for $2,650,000 which was equivalent to an 8.49% CAP rate on the in-place ground rent of $225,000 / year NNN.  If you are a seller negotiating with Fresh & Easy to sell them your property I would think this would be a pretty good comp for you to reference when they submit their 9.50% CAP offers.

I love citizen journalism.

Enjoy.

(HT – Calculated Risk)

The image below is from an email blast sent out by a brokerage firm selling a retail property in Southern California.  Really, “Cooperating Broker Fee Offered” is your number #1 selling point?  I have cropped out the distinguishing portions of the image to protect the identity of the offending brokerage.

Last time I checked, offering a cooperating broker fee is pretty much industry standard.  Basically, it comes down to this:  If you have to state “Cooperating Broker Fee Offered” it is because you have a reputation of NOT offering cooperating broker fees and therefore have a reputation of not working with the outside brokerage community.  Clearly, this is not in the best interest of your clients.  I highly doubt your clients are specifically requesting that you do not share fees with the outside brokerage community because they think your greed will lead to a higher net sales price for their property.

This is why many brokers will not bring their clients to these guys.  They want the name, number, address, etc. of your client so they can tell you they already know him and that you are not getting paid if he buys it.  Oh really?  I guess you didn’t realize that the buyer is allowed to determine who represents him and that your ridiculous confidentiality agreements (whether online or via fax/email) don’t mean a damn thing.

Maybe the next marketing package from these guys will have selling point #2 read “Will not attempt to go directly to your client.”  These guys may need to read my Marketing 101 post to get up to spend on some of the latest trends in marketing commercial real estate.

I have just been notified, via Twitter that CNRPA is now following me.  So I go to check out who CNRPA is and I find the Commercial National REO Professionals Association!  Anyone who has read this blog for any amount of time will understand when I say I can’t remember the last time I was so excited!  The stated intentions of the CNRPA are as follows:

Commercial National REO Professionals Association is a trade organization for those who conduct business within the distressed commercial real estate industry. The focus of CNRPA is to establish and promote education, as well as networking in business development opportunities for its members. Education and knowledge are combined to achieve certifications, which are applied with experience to achieve master designations. Preparation, integrity, reliability, consistency and teamwork are the defining characteristics of our members.

Here we go again.  The list of founders and their resumes are about 10,000,000 times more legitimate than those of CREOBA but I still just don’t understand why I need to join one of these associations to work on distressed assets.  I don’t have to take classes or join associations centered around non-distressed assets to work on non-distressed assets.  Any classes I may take or associations I may join should benefit me for any property type.

Membership dues are $795 annually plus a $75 monthly fee.  For what, I have no idea.  The right to sign up for one of these classes maybe:

Commercial BPO 101 Form and Function:
This course explores the basics of commercial real estate and how it differs from residential real estate. It discusses the general theories and compares and contrasts each of the six broad property types covered in commercial real estate. At the end of this course you should have a good basic understanding of each property type so that you can decide which types of commercial property most interest you.

Valuations and Financial Indicators:
This course covers the fundamentals of how to effectively value each of the six types of commercial real estate. It also gets you comfortable with financial indicators – cap rates, gross rent multipliers, cost per square foot, and cash on cash return.

Commercial BPO 201:
In this course we share with you all of the tools necessary to complete the industry’s most elite and professional commercial BPO. These BPO’s are completely comprehensive and typically will run around 70 pages of pure content with zero fluff. In addition you will learn – step by step – how to use each of the software tools that we recommend. You will apply the knowledge you learned from the Advanced Valuations Course. You will learn about highest and best use practices, how to write a development proforma, how to establish value on fractured projects, and how to write do a BPO for Note Sales.

I am just left to wonder if any of the banks and other financial institutions have any idea that CNRPA and CREOBA are about to come swooping in and instill their “best practices” and “industry standards” to which said financial institutions must adhere.

See you guys at the next REO BPO 101 course.  Unfortunately, I’ll be retaking it because it was too hard the first time around.

One last point:  It is pretty sad if you are copying from CREOBA.

Just got this email from a friend this morning.  Not much commentary necessary other than to say that a picture is worth 1,000 words.

Here’s the email:

I don’t know if you got this loopnet blast but it is one of the funniest things I have ever seen. Below are two different blasts that this broker has sent out on this property within a couple of weeks from each other. First, notice the picture. If that doesn’t sell this property I don’t know what will! Then notice the tag lines. Classic! Could be good fodder for the blog.

Note: The tagline in the other blast (which is sitting in the same place as “All offers to be considered….” reads “Thanksgiving Sale- Ask about special pricing.”  You can’t make this stuff up.

One more thought:  Maybe the broker is trying to say that the property is a piece of shit!

Here is a “Just Closed” email flyer I sent out this morning for a deal I just closed.  I don’t really want to use this blog to promote all things PCI, but I thought I’d share anyway because the fact that this deal closed in 1 week start-to-finish with a holiday and weekend in the middle is no small feat.

I realize I need to get someone way better at creating these flyers than me.  Either that or I need some new software to make it easier to make these things.  Suggestions?

P.S. – The “Call Now” link does not work on the above image as it is just a snapshot of the actual flyer.  If you want to “Call Now” you can click on the subtle call to action here. 

Here is an email flyer I got yesterday.  These guys are trying to sell 30 acres of raw land for commercial development in Murrieta in a “C” location (on its best day).  Who is buying 30 acres for commercial development in Murrieta right now?  I don’t know anyone with that strategy in their business plan.  Maybe I’m missing something but I think most people would tell you that you would have to PAY THEM to take this site off your hands.  I love the “Must Sell” – ah, no kidding you’ve got to sell, the site is killing you.  At least its priced “Way Below Market.”  Enjoy.

I just got the email below from NNNEX, a listing website I have always liked for its simplicity and ease of use.  It does one thing and does it well: a Craigslist of retail investment properties, if you will.

The message is a very powerful one.  It is just too bad most people in commercial real estate have no idea what keyword search, search engine optimization (SEO), traffic referral, etc. mean to them and how it can impact their online presence.  Real Property Alpha had a post some time ago on the same subject, conveniently indexed forever by Google for your reading pleasure.

NNNEX was also kind enough to feature my company on their commercial broker resources page many moons ago for which I am grateful.  Thanks again guys.  Keep up the great work.