2025 Commercial Real Estate Brokerage Outlook | Brokers Round Table
Join us for a roundtable discussion as we explore the key trends shaping the commercial real estate market in 2025 and beyond. Our panel of seasoned brokers will share their sector-specific insights on how transaction volumes, technology, and market dynamics are evolving, with a focus on industrial, office, and retail real estate.
Key Takeaways:
The industrial sector is expected to see steady transaction volume in 2025, driven by interest rates remaining relatively stable. A potential interest rate drop could spur more activity.
The office market is facing challenges, particularly with B and C class buildings, but 2025 is predicted to be a rebound year for leasing and pricing. Office to residential conversions will continue, but are limited in feasibility.
The retail market is seeing softening in luxury segments, with a lack of new development. The focus is on quality deals rather than quantity, as it's difficult to replace existing retail space.
When evaluating asset class performance, industrial, student housing, and senior living are highlighted as potential outperformers, though market-specific factors are crucial.
Technology is playing a growing role, with AI tools for summarizing industry news and data, as well as data analytics platforms transforming site selection and tenant needs in the retail and office sectors.
For job seekers in real estate, building connections in the industry and developing deep market expertise are key strategies to prepare for the 2026 job market.
When selecting lenders, factors beyond just interest rates, such as loan terms, personal guarantees, and fees, should be carefully evaluated.
Check out CRE Central: www.crecentral.com
About Your Host:
Tyler Cauble, Founder & President of The Cauble Group, is a commercial real estate developer and investor based in East Nashville. He’s the best selling author of Open for Business: The Insider’s Guide to Leasing Commercial Real Estate and has focused his career on serving commercial real estate investors.
Episode Transcript:
Tyler Cauble 0:00
This episode of the commercial real estate investor podcast is brought to you by my cre accelerator mastermind, where you'll get access to my step by step investment blueprint, essentially a library of resources on how to invest in commercial real estate. You'll get connected to a supportive community of other commercial real estate investors that are doing projects just like you. You'll get personalized coaching and feedback from me every step of the way. Go to www dot cre central.com, to learn more. Welcome back to the commercial real estate investor podcast. We are live with another round of the brokers round table, and we're gonna be diving into what is going on in 2025 what is everybody's outlooks on where brokerage will be, considering the New Year is pretty much upon us, the Urban Land Institute has released their emerging trends in Real Estate Report, and I figured now is probably a good time, as good a time as ever For us to dive into what's everybody's outlook on 2025 what are your projections as to what's going to happen? How is technology going to impact what we're doing in our day to day lives as commercial real estate brokers? Chad, I'm going to kick it off with you first man, I mean coming in on the industrial side, what do you think 2025 is going to look like in terms of transaction volume, and how will that compare to recent years, and what might be driving those changes? Because industrial has kind of been the Darling, right?
Speaker 1 1:31
Yeah, it's a great question, and I would say as a general answer, I think it's going to be similar to how 2024 is shaped up. And I say that because I think the main catalyst for transactions right now is a change in interest rates. And we saw that. We saw that in 2022 when interest rates started going up, transaction volume dropped. And I'm anticipating that interest rates are going to be the same in 2025 as they are now, solely on the basis that I don't think inflation is anywhere near under control, and if they were to lower interest rates further, I could see that causing pandemonium in the market, where everybody would just be super bullish on the economy. So I think, solely based on the outlook, that I think interest rates are going to be steady for 2025 that's why I think transaction volume will be consistent. But if we do see an interest rate drop, I think we'll see a flurry of activity. Yeah,
Tyler Cauble 2:27
it's pretty interesting to see interest rates starting to drop. We just had another quarter point drop pretty much within the past week, and that always sparks a lot of interest in the commercial real estate market, considering how much leverage is used in these deals. But I heard an interesting thing at the I went to the emerging trends in real estate breakfast this morning in Nashville, and the representative there from PwC was like, you know, there are pros and cons to lowering interest rates, right? She was like, lower interest rates don't necessarily mean that the market is strong, it could actually mean that the market is pretty soft, and there's some other issues that we need to pay attention to. So I was like, Wow, that's pretty that's an interesting take, because we almost always hear in commercial real estate lower interest rates, better deals. But that could mean that there's some issues in the economy. Jesse with with everything that's going on in the office market, man, I mean, it's there's some lingering challenges, but I also think there's some interesting types of Office that have taken off. What are your predictions for Office transaction volumes in 2025 what are we going to see in that in that
Speaker 2 3:37
market? I think we still have a lot of distressed assets kind of going through the process right now in terms of writing down book values, I think that the B and C Class office buildings are going to be challenging most major markets in terms of leasing volume. From what we see, leasing volume is starting to kind of bottom out in terms of where we've seen the pricing at, I know in our market we, you know, 2025 seems to be kind of the rebound year or the baseline year, from all the indications that we look at. So I do think that we've finally come to, I guess, a realization of how much people are going to be using Office. Maybe that's three or four times a week. And I think a lot of companies have, like, calibrated how much office space they need as a result of that. But I mean, there's some interesting things that I think are going to continue to go on. I think that, you know, office to residential conversions where they make sense. Could could we could see that continuing, I know in a lot of markets now that had mandates or requirements for Office replacement when you were doing residential or other projects. I'm starting to see some markets that are easing that just because the demand is not as big as it was prior to this. But yeah, I still think it's kind of a year, bit of a year in flux, and just trying to get our. Hearings to see what exactly we need going forward. I think we all know that there's been definitely a shift in the office market, and I think we're starting to finally see where the dust is settling there.
Tyler Cauble 5:12
Yeah, it's interesting. We heard this morning that across the United States the amount of office buildings that are actually ideal for office to residential conversions is 2.7% right? A much lower number, a much lower number than everybody thinks, right? Everybody's like, oh, just convert it into residential what's it's not that easy. And in fact, it also is market dependent on the type of Office that you're developing. Nashville, specifically, around 1% of office space made sense to be converted into residential. So you're probably not going to see a whole lot of that so interesting. I think
Speaker 2 5:52
pricing is really where we're starting to see kind of the craziness of 2018, 2019, we're starting to see that come down. And I mean, it's, it's such a tired phrase, but there is the flight to quality, or flight to amenities that we're seeing the A class, triple, triple A trophy assets in our market. And I know in a lot of us major markets there, they really have not been affected in the same way that tertiary and even suburban markets have been affected from a vacancy standpoint. So we are seeing people move towards the towards the those upper end of the of the office world.
Tyler Cauble 6:32
Yeah, it's interesting how much more advanced today's new construction office space is compared to even 510 years ago. I mean, it seems like office that was built five years ago is now obsolete, which is kind of wild to say, right? But that's just how quickly the office market has changed. Adam, let's, let's get to you on the retail side. Man, what are your predictions in 25 for the retail market? What will transaction volume look like? What are retail sales and consumer activity? What's that going to
Speaker 3 7:06
look like? Really different questions. I mean, I think the sales activity from like a sales per square foot is changing. You're starting to see a little bit of softening in the luxury markets. People aren't just like spending money, like, it just doesn't matter anymore, like the Gucci's and the Louis Vuitton's of the world, people like that, although they're still growing, I just think that there's not this, like runaway you know, there's not the wrap around lines at the Louis Vuitton store like was six months ago. So I think luxury, you're starting to see a little bit of softening, but actual, like lease volume and just transaction volume is, is kind of being hampered by no new product, right? There's just not a lot of new development. You know, retail is, it's kind of harder to to hit the streets with because it's so location specific. Industrial at least, you can kind of just go a little bit further out, right, and build a really good industrial park, whereas retail, you've got to be kind of on these main corridors. And I think the flight to quality comment was was very true, right? Like the people in the in committee are being a little bit more careful with approved new deals. Like, instead of doing, you know, 10 deals, they're going to do, you know, four really good deals. So I think that, I think that the volume will will kind of continue to be what it's been the last, you know, 18 to 24 months and until there is more investment on, on new ground up construction, there's just going to be a natural constraint on, on new product in my world.
Tyler Cauble 8:52
Yeah, it's, it's really interesting to see how little new construction retail is going on. I mean, Nashville is is at an unbelievable market low in terms of vacancy rates, because there's just nothing there, you know. I mean, a lot of the deals, and I'm sure you're experiencing this in Charlotte, a lot of the deals that my guys are having to work on, on the brokerage side, are off market. We're having to get a hold of these, you know. I mean, it's a going direct to a tenant that's maybe a struggling restaurant that nobody knows about. So you're calling every restaurant you can get your hands on and just figure out, Hey, how are you guys doing? It's, it's tough work right now, man. I mean, it's, I always find it funny when people see, like, the commercial real estate market, and it's, you know, doing well in the headlines. But I'm like, Man, all of my brokerage friends, all of my investor friends, were all tired of it because it's so much work to get the same deal done. If you are joining us live question of the day, what do you think will be the biggest driver of commercial real estate transaction growth in 2025 better financing MARKET CLARITY or tenant demand? What are your thoughts? Maybe you've got another one. Let me know in the comments. Yeah, let's talk about it. Also. I've got a fire question for you guys real quick. We'll start it off with Chad. This one comes in from Doug. Which asset class will perform the best in 2025 industrial question mark. Question mark.
Speaker 1 10:14
I like Doug already. I'm certainly, I'm certainly biased, so I guess I would look at it. If you look at office, retail, industrial, multi family as being the four to look at retail and and Jesse and Adam, can correct me if I'm wrong on both these assessments, but I think retail is going to be relatively flat right now. There might be some growth, but I don't see a ton of it. Office, I think is still going to continue struggling into next year, until people just figure out what what their requirements look like. I think industrial is going to still have top line revenue growth. It's going to be offset some somewhat by property taxes, which are spiraling out of control in virtually every city, and every city seems to be using industrial is their poster boy for trying to get that growth out of so I think that's going to hurt. I think insurance is going to hurt across the board, but I would still be bullish on top line rent growth for industrial and multi family. I think that's going to be a little stagnant too. It just went up so much so fast that people are trying to adjust and calibrate. But I'm also laser focused on industrial. So I'm kind of speculating as an outsider, trying to look at those asset classes like I'm I'm just all I do is industrial. So I'd leave it to those guys to give their commentary on, on why I may be wrong, but I like Doug. I'm long industrial.
Tyler Cauble 11:40
Jesse. What are your thoughts?
Speaker 2 11:44
Yeah, it's a good question. I don't know. I'm pretty bullish on student housing and old age communities, depending on the area. I think it's just a cohort that's that's going to going to need more. I might be biased on that from the student rental standpoint in Canada, because, because we have rent destabilization or rent control in almost every province, or some version of it in almost every province, what's nice about student rentals is we get around that, because you get a new cohort every three, four years. So if purchased at the right price, it's, it's a asset class that I think is going to continue to be, you know, continue to be powerful in our in our markets.
Tyler Cauble 12:32
That's, that's really interesting. We'll have to do a deep dive some time on on student housing in Canada, because I didn't realize that that was such an interesting opportunity up there. Adam, what are your thoughts? Man?
Speaker 3 12:43
Well, I mean, I'll just do the same Homer type view that Chad did, and just talk about retail, right? So I think what's interesting that is being driven by what I mentioned earlier, the difficulty, or inability, to just put more, you know, retail square footage on the ground. I think the real opportunity is, you know, wearing out shoe leather and finding kind of mom and pop guys that own four or five shopping centers that their grandfather built or their dad assembled, and go in and take more of a capital markets or quasi institutional approach to running those, because a lot of those, those opportunities were, hey, I'll get you in for no money, you know, I just want you to pay your rent. You know, the rent is kind of really reasonable, where, if you come in and really spend some money on the property, make it beautiful, make it accessible, make the signage great, upgrade the infrastructure. You can get it to a more market rent rate. So I think there's still a lot of opportunity to do that, and it's being really brought to the forefront, because retail is kind of a sexy asset class right now, and there's it's just really hard. I mean, you're buying the stuff when you can't really replace it with other things. So that's something that I want to do more of this year. Yeah,
Tyler Cauble 14:07
I think the thing to keep in mind too, is it's so hyper market specific, like, you can't blanket coat anything, you know, because what was interesting is, like hearing from PwC this morning, you know, nationally, across the United States, industrial is the number one property type to keep an eye on, right? But it's third in Nashville, like Nashville has has almost been overbuilt, at least for the foreseeable future, not, not like in such a devastating way that we'll never be able to catch up. We've just built a lot of industrial. Number one is retail. Number two is single family rentals, right? It's that's interesting to think about, like it really does depend on the market, and when
Speaker 3 14:49
you guys's tourism, throws off everything you guys have, like that tourism engine that's just going at 10,000 RPMs, you know, 12 months out of the year. So you. It really does just totally skew. And that makes total sense, right? Retail and single family for rent makes a ton of sense in that market. That's right,
Tyler Cauble 15:07
yeah. And hey, we can't figure it out, right? We don't have enough hotel rooms. The Airbnbs piss everybody off. It's just, it's interesting. Chad, let's, let's get into technology, man. Because I mean, one thing that we've really seen over the past couple of years is, I mean, commercial real estate, in many ways, is taking some massive leaps forward in terms of technology utilization within the industry. Because I used to always say, like the commercial real estate stuck in the 1980s and now, if you're not utilizing AI in some sort of aspect in your business, I feel like you're already behind in the brokerage world. What data driven tools or what tools in general are you seeing in the industrial world that are helping you all stay competitive?
Speaker 1 15:57
Yeah, great question. And I think the biggest thing that I'm using AI for right now actually combines all the data that's out there, because there is so much out there, and 10 years ago we we've always had a data problem of data overload, but it's growing exponentially. There's so many companies out there that are providing data and insights and market reports and commentary and insights and everything you can think of that it really is much more overwhelming than it than it was even a few years ago. So what I use AI for quite often is just to get a summary of the of a report or of a news article. So I've stopped watching mainstream media for the most part five years ago. I don't watch any news. The only thing that I subscribe to is Wall Street Journal, which is also getting a little bit wonky lately. But I subscribe to a number of different magazines and trade publications like globe Street and biz now and the real deal, like some of those ones that are very focused on the industry, but even that, it's, it's, it can be inundating having that much information hitting you all the time. But if you put in, if you put an article into chat GPT and just ask for a summary of one paragraph summary, it'll give you those cool notes. So I could now go through and read 2030, articles a week, or market reports, but it's very condensed, so I found that to be a very efficient way of just staying on top of things and and it's it goes to your point as well. You You do have to keep on top of this, because now that we've got a new presidency, we're going to see more change in the next year than we've seen in the last four years, probably combined. So I think everyone's going to have to stay on top of all this macro economic data. It's going to be really important to stay on top of micro data. And if I can just take one more quick minute here without cut me off if I ramble, but I think you mentioned Nashville is the industrial is the third biggest category. I think that that's going to be emblematic across a number of different markets. There's going to be markets that win, there's gonna be markets that lose, but there's also going to be subsections of different asset classes that win in some of those other markets. And I look at Dallas as an example. I think Dallas is going to continue doing really well, but they've heavily overbuilt on their warehouse space. So for big box distribution, they're going to have a problem getting all that absorbed and chewing through all that space, whereas some of the port markets that have very low vacancy rates anyways, they're probably still going to do quite well. So I think it's going to be incumbent on anybody in the space, whether you're a owner, user, a tenant or a broker, you've got to be up to speed on every single thing that's happening in your market. But also differentiate between a 200,000 square foot warehouse space and a 10,000 square foot industrial outdoor storage space, because those are two completely different things, even if they happen to get grouped under an industrial vacancy rate. So if you see like a report in in Nashville or Charlotte or Toronto, it says industrial vacancy rate is, is 5% well, is that 5% for the 200,000 square foot warehouse, or is it for the 10,000 square foot spot on two acres? So I think people are gonna have to get really granular, and ai, ai is gonna be a great tool for that. That's That's where the opportunity is gonna be, in my mind, for tech savvy people to be able to interpret and narrow down and be laser focused on the exact type of data they want, instead of just having a bunch of high level noise.
Tyler Cauble 19:25
Yeah, it really, it really helps you, you know, peek through the clouds, so to speak, right as you're going through that process, Jesse, talk, talk to us about what office brokers are seeing, either in terms of office brokerage or what your tenants are doing now that we've got, you know, hybrid work needs for tenants sometimes, I mean, we're seeing a lot of companies not necessarily abandoning office space altogether, but they're reformatting, you know, hey, maybe we only need half as much space. Or we're having some, you know, workers come in on different days. What kind of technology? You seeing to address kind of the hybrid, hybrid work needs,
Speaker 2 20:04
yeah. First of all, I can definitely vouch with chat on summarization of articles, that's a great tool. A lot of fluff, yeah. So for us, there's a number of different things that we've been seeing, from a tech standpoint, with offices. This is stuff that has existed for a while, I think, is getting better, smart scheduling when it's coming to hoteling. You know, we're starting to see, even in a new office, relatively new office that we've moved into, senior staff is, you know, less reluctant than they have in the past, to sit on the floor, to schedule different seating arrangements. We're starting to see, continuing to see, more we space than me, space so collaborative kind of workers. And yeah, I think you're right that the actual space needs for a lot of companies have come down because they're getting more efficient, and they're being a little bit more careful with the what exactly they need for their workers. But I've always, you know, the senior guy I trained under, he always gave me kind of this chart that has an exponential curve of how companies grow, and then something that looks right behind it like stairs, and that's really the real estate, or the stairs that you're trying to map, because you hit a wall, then you got to get more space. You hit a wall, and you have to get more space. So we have yet to create the continuous office that you know slowly adjusts to every kind of move that your company makes as it grows and shrinks. And so for us, it's always going to be a bit of trying to map on the right office space to the to the growth that you have as a company. So as long as that is a reality, I do think if you're still in the office three, four days a week, you need office space. That's that's kind of the bottom line. Now, we do have solutions. Co working is continues to to do well in our markets. You know, where you have some flexible offices that are kind of the same idea as co working, but maybe under a different name. You know, we're seeing that as well, but I do think just utilization, trying to get more specific on what companies need. I think that's kind of the trend that we're seeing more so, and I think that technology will will be there to assist that. And the last thing I say, I'll say, is, hopefully, you know, we don't make the mistake we've been making in the last 3040, years in commercial real estate, and have the residential guys just light years ahead of us all this stuff. Yeah,
Tyler Cauble 22:23
they typically are, dude, I real quick back to you, Jesse again. I mean, there's this software that I've seen where you can drop a floor plan into it, and it'll start giving you all sorts of different ways to lay out the floor plan to maximize, you know, open workspace versus, you know, closed offices. Are y'all using that now to present to clients to say, Hey, by the way, if you guys do start to outgrow this space, here's some ways that we can see you fitting more employees into this for, like, temporarily.
Speaker 2 22:58
Yeah, we've, I can't remember the name of the company, but similar to, like, what we've done in the past, we've done in the past, where we would give, like, a dense a density, a high density, a medium density, and then a low density floor plan, we're starting to see ones that are actually evolving based on how you toggle the employee count. So if you want to be, say, 120 square feet per employee, now you've gained, say, x amount of employees. You toggle that, and then you can see layout slowly changing. So stuff like that, I think is only going to make things better. You know, another kind of interesting, one little bit off topic with this, but even AI where, you know, sub tenants, for instance, for instance, they're not in the business of about, sorry, sub landlords are not in the business of really evaluating tenants. So we're often they often come to us and say, do these financials look good and not? Obviously, privacy issues are going to be a chief concern. But we're starting to see different software like chat GPT, where you can say, Listen, I want you to look at the credit worthiness of this company based on their financials. I want you to make a focus on cash, on hand, quick ratios, and then it can give you an evaluation. And I think we're going to start seeing more self serve tools like that in the financial and the legal world that pertain to real estate.
Tyler Cauble 24:12
Interesting that'd be that'd be really cool to see Adam. The retail world has shifted quite a bit. I feel like a lot of tech is focused on what's going on in the retail world. I mean, you're seeing a lot of these softwares pop up that really bring in, you know, granular foot traffic analytics, right? I mean, how is, how is software kind of reshaping the way that you all do retail real estate?
Speaker 3 24:34
Well, it's almost changed the DNA of retail, you know. I mean, the new companies. And this happens in every industry, but like the New Kids on the Block that were kind of born online, the digitally native companies completely transformed the way people use data and analytics, and have led to all these new innovations. So you know, the groups that are. Born online from Warby Parker is kind of the most famous example. But there's, there's dozens and dozens of these guys. They go in, they know where every single one of their customer lives, works, plays. You know, they're buying all the cell phone data. They're buying all the geolocation data. So groups like placer AI and that data and technology has just completely transformed the the way that that we analyze sites, and it used to be as simple as, like, traffic counts and, you know, just really basic and demographics, obviously, right. Demographics are still kind of the Holy Grail, but, but it's changed from that to like psychographics, and then it's changed from that to, you know, rankings of every single retailer within a mile radius, and graphing it out to kind of build a really, really specific picture of who the buyer is, and is your buyer on site, And do they transact here? So the place or AIs of the world and those groups, in addition to the in house data that all these digitally native companies use, has completely transformed retail like and not just with the Warby Parkers of the world. Right now you have, you know, the buxtons and all of the big mapping software guys that are coming out and giving retailers the ability to just get insanely detailed with the way they they look at sites. So there's no going back, like I was even with you. We do a lot of work with Ace Hardware, which is not considered the next Warby Parker of the world, right? They're not considered, you know, this like futuristic group, and the data that they use tied in with heat maps and the place where AI data is light years ahead of even what a more sophisticated user like, think about a big growth user from 10 or 12 years ago, like an Outback Steakhouse. I know everybody make fun of the blooming onion, but they opened a shitload of stores, right? These guys were freaking blowing and going the data that even a more standard group uses now is completely different than what you would have used 10 or 15 years
Tyler Cauble 27:15
ago. Hey, man, the blooming onion has to be one of the greatest appetizers of all time, because here we are, 20 years later, still talking about it. I mean, well done. You're
Unknown Speaker 27:26
still opening stores. I mean, yeah, that's great. We
Tyler Cauble 27:32
got some, we got some great questions in the live chat. I want to make sure that we get to get to these. So let's, let's dive into that van is saying, please, if possible, speak to job security and availability for those doing a real estate masters throughout 2025 and looking for work in 2026 what should we focus on throughout 25 in preparation for the next year? Chad, I'm gonna, I'm gonna start that off with you. If somebody's going through getting their real estate masters. What could they be doing this year to prepare for the job search next year?
Speaker 1 28:06
Yeah, I'll give you two actionable things that I would be doing right now. The first is get to know as many people as you can. So try to connect with brokers, try to connect with property owners, try to connect with anybody that is involved in in the real estate business, and just ask them if you could grab a 1015 minute coffee with them and give them something of value. I think I'll increase your chances of having them say yes. Perhaps, if you're working on your masters and you're working on on a project, you could go and say, I, you know, I'd like to have 1015 minutes your time in exchange for that. I'll share with you this report that I worked on that explains something in the business, which I think will be of interest to you. I think that gives you a pretty good chance of getting to meet a lot of people. And I know all three you guys will agree with this as well. The real estate community is awesome. If you're if you're polite and you're diligent and you're following up with people, there's a very good chance that someone's going to say yes to meet with you. So go to their office, get to know as many people as you can, and that will you'll find a job if you if you're effective, just by doing that. Second thing that I would do is become an expert in your local market. And I know I've kind of talked on that a little bit, but get start studying it already. Start seeing what listings are available. Start seeing what properties have sold. Start seeing market trends on vacancy rates and absorption and really actually understand the market. Because if, if you're going the academic road of learning everything you can about the finance side, which will probably be heavily focused on your your blind spot is actually known in the market. So you'll be trying to get a job with someone, and you won't really understand what's going on the market beyond having a really good education and a good sense of what's happening from a financial standpoint. But if all of a sudden, you combine that with knowing a bunch of people out of the gate, and you have a solid understanding of what the market is, man, you're unstoppable. You
Speaker 3 29:55
don't need any more advice than that. That's perfect advice. I was
Tyler Cauble 29:59
going. To say we're not even gonna, we're not even gonna send that one around. That was perfect. But I agree with that, man. I mean, if you, if you are working on your real estate masters, and you reach out to me and you're like, hey, I have something interesting I want to share with you. I'm like, hell yeah, let's grab coffee. I want to hear it's like, I think that stuff's interesting. Jesse, let's throw this one over to you. This is from Derek. You say good evening all when you're looking for tax accounting, legal and your investment team. Did you look locally, regionally or nationally? And feel free to elaborate. Why?
Speaker 2 30:29
Yeah, so it kind of followed the investments that we made initially. So my partner and I locally, we started making those investments once we started putting more properties in the corporation that were regional. Then we started kind of looking at the company that could handle something larger, I will say this legal and taxes and accounting, you kind of take in the chin for the first little while, until you get up to scale in terms of the expense as a percentage of your income. So until you get up to multi units, it's, unfortunately, it's just a large component of or it's a large expense, and it's not one that you really want to skimp on, but I would try to do your best to try to save as much as possible it when you're dealing with only a couple rental properties. But, yeah, that's how it's gone. You know, I'm not at this stage ever. I need a national team. It would be great if we're there. But yeah, I think there's a lot of good local, local teams. And then just figure out exactly what you need. If it's only a property or two, you might not need monthly bookkeeping. If it's, you know, 1015, properties, it's a different story. So, yeah, I would go with, you know, go with people that in your area that specifically deal with real estate. Because, as I'm sure you know, there's a lot of nuances that come with any area when it comes to accounting and taxes.
Tyler Cauble 31:51
Excellent. And guys, I know we're two minutes past the hour, if y'all have to jump, you gotta jump, but we've got a couple more questions. I'll make sure these get knocked out. Samuel, actually. Chad, I mean, if I could throw this one to you. Samuelson, good afternoon. What are you guys going to to most to look at when it comes to finding good lenders? Is it the loan to value the origination fee? Would appreciate all the insights from four sides of this call. Well, unfortunately, Adam jumped off so you can at least get three. Champ, we'll start with you.
Speaker 1 32:24
Man, yeah, there's a lot that goes into it. And I've, I've bought properties now for the last 10 years, and I've refinanced, I've sold and I've renewed debt. So this is topical for me. I think that that you got to weigh everything, and ideally you want to talk to a few different lenders. If you just go to one lender, you're getting their rate and you're getting their terms, and it's really hard to actually compare apples to apples if you're not, if you don't know what all the apples are. So I think the break fee is important. I think what the interest rate is naturally important, what they require for credit risk. We had one loan, my partners and I, and we just renewed that loan in in the summer here, and we we originally had a corporate guarantee, and we had personal guarantees on it, and we were able to discharge the corporate guarantee on the renewal, and on the next one, we're going to be able to discharge the personal guarantees, at least, hopefully. So I mean, that's a big deal. You might be able to get a better interest rate somewhere else, but if you've got your personal guarantee on there for the duration of the lease or duration of the mortgage, that that could be a problem. So I think you really got to understand exactly what you're getting and compare it to other lenders, and then at least you can make an educated
Tyler Cauble 33:41
decision. Yeah, I like that, because it's not always black and white, right? I mean, sometimes it's worth paying a higher interest rate to not have it tying up a space on your balance sheet where you could go buy another property, right? Jesse, what are your thoughts? Yeah.
Speaker 2 33:53
I mean, I think Chad said it said everything pertinent there. The other thing too is, like, we've, we've shopped stuff around on our own. Sometimes it's beneficial to have a broker that's in the lending world to do that for you. And actually, you know, they'll look at a host of different lenders, but I definitely think, Yeah, they'll be who is a Pennywise, pound foolish. Personal guarantees are kind of the kiss of death in a lot of ways, because they get a deal done, but you don't see the potential risk down the line that they could expose yourself to when it they could have been maybe dealt with by going with a different lender. So definitely, those type of things. But ultimately, you know, LTV is going to be if you're good at underwriting deals, and you get good at underwriting your own deals, if it's not your lender, or it shouldn't be your lender. That is the training wheels for for you to take on risk, right? You should be underwriting to what your philosophy is, if it's conservative, if it's more risky. And then the last thing a lot of people don't talk about till the end is look at the fees. Man like people, people at the end of the day, when a building closes. So even to this point, after doing this for, you know, whatever, 15 years, I'm still amazed that all the fees that that kind of get totaled up at the end. So keep an eye on those as well. Yep,
Tyler Cauble 35:09
I couldn't agree more. Let's see here. Game Master is saying, I would say better financing is going to be the biggest driver of commercial real estate transactions at 25 aren't a lot of the loans going to be called in 2020 25 and 2026 Yes, I believe that they will. Because if you think about it, most commercial real estate loans are on a five year term. What was five years before 2025, 2020 and 2021, those are, those are loans that are going to have incredibly low interest rates. You're gonna have very different terms. So coming into today's market, night and day, difference those, a lot of those may not be able to refinance. So now is when we could actually start seeing some shakeups. Justin is saying, Guys, check out the AI platform called giraffe build that assists in site development and planning, layout, yield analysis and zoning. I actually did pull that site up while Jesse was talking to look at it real quick. It looks interesting. It seems to me like it's going to be a difficult thing for it to do that on a local basis, but y'all check out draft dot build. Let me know what your thoughts are. Gentlemen. Appreciate you joining me as always. I'll see you here in a couple of weeks, and we'll see y'all in the next one. This episode of the commercial real estate investor podcast is brought to you by my cre accelerator mastermind, where you'll get access to my step by step investment blueprint, essentially a library of resources on how to invest in commercial real estate, you'll get connected to a supportive community of other commercial real estate investors that are doing projects just like you. You'll get personalized coaching and feedback from me every step of the way, go to www.crecentral.com to learn more.
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