2011 Transaction Activity - How Did We Do?

From a sales standpoint how well did we do in 2011 compared to previous years?  Shown below are the criteria we used to tabulate the results:

• Sales information from the CoStar database
• Transactions closed between January 1st and December 31, 2011
• Investment properties only (no owner user)
• Property types - flex, industrial, mixed use, multifamily, office & retail
• Transactions with sales prices of $1 million or larger
• Arms length transactions (no partial conveyance of ownership)
• Transactions located between Kelso, WA and Eugene, OR including Bend

Based on these criteria the chart below compares the sales activity for 2011 with each of the preceding five years:

As you can see, the sales activity for 2011 has increased significantly over the preceding two years and was almost back to the volume of 2008.  But we are a long way from the heady days prior to the Great Recession.

We then analyzed the 272 transactions by property type:

Multifamily and retail properties continue to dominate the property transactions but office and industrial are just beginning to show signs of life.

Of the 272 transactions, 139 had broker representation on both sides of the transaction.  Fifty-two had no broker representation.  The remaining 81 transactions had only one side of the transaction represented.

If you add it all up, there were a total of 359 paydays (2 x 139 + 81).  So if you want to know your personal market share of all the broker paydays divide your number of paydays by 359.

Shown below are the lending sources for the 272 transactions:

Of those transactions where the lender was identified, 34% were either all cash transactions or seller financed.  Although that sounds like a lot that is considerably less than previous years where it was in the 40% or more range.  The banks continue to be the predominant lender in the market.

A new addition to our report this quarter is to rank the top brokerage firms based on closed transactions.  Shown below are the top 8 real estate brokerage firms based on total broker representation of closed transactions:

The commercial real estate brokerage community is not dominated by any one firm.  In fact, Marcus & Millichap, who is ranked #1 on the list with 29 broker representations, represents on 8% of the total market.  The top 8 firms represent only 36% of the total market.

Assuming there are no major economic catastrophies in 2012 (I'm thinking Europe), this coming year should continue the upward thrend in commercial real estate.

Timeless Principles of Success

A while back I was asked to speak at a conference of college students from Kazak American Free University who were visiting the United States to learn about American business.  I titled my talk, "Advice for Those Just Starting Their Careers."  This week I stumbled upon my notes for this presentation and was rather impressed (if I do say so myself) with the principles I presented.

These principles are timeless.  They are as true today as they will be 100 years from now.  And they are not just for young adults getting started on their careers.  They are for everyone, young and old.  And they are not necessarily for business professionals - they are truly for everyone.  For the sake of brevity I have condensed my talk into bullet points.  I wish I knew whom to credit for these timeless insights but unfortunately I do not have the source.  All I know is they didn't come from me (I'm not that wise).  I hope you enjoy them as much I have.  Here goes:

LEARNING

• Always be learning.  Those who succeed in life are continuously learning.
• Seek out someone who will mentor you - someone who sees your potential and is willing to develop it.
• Learn the art of listening.  It is safe to say that you never learned a single thing when you were talking.
• Allow yourself to make mistakes and then learn from them.

TIME MANAGEMENT

• Remember life is precious.  Don't waste it on the unimportant.
• Set both personal and professional goals.  Decide exactly what you want to do, write it down, set a deadline and then do something everyday to move towards achieving that goal.
• Balance yourself - don't focus just on your career.  Allow time for things that will help your emotional, physical and spiritual well being.

CAREER DECISIONS

• Never seek a job; rather seek a career.
• Be willing to take calculated risks.
• Determine what you are passionate about and then stick to it.  Don't let anything sidetrack you.
• Have it as your goal to be the best you can be in your profession.

ATTITUDES TO ADOPT AS YOUR OWN

• Have a positive mental attitude.  Avoid being around people who are negative all the time.
• Be proactive not passive about life.  Accept complete responsibility for your circumstances.  Don't blame it on others.
• Honesty is an invaluable character quality.  Tell people what they need to hear, not what they want to hear.
• Be a person of integrity.  Integrity is defined as the strict adherence to a standard of value or conduct.  Integrity is not what we do when it serves us.  It is who we are when no one is looking and it is how we treat people who we cannot benefit from.

In closing, I read a quote this week that inspired me that I would like to share with you:

"Be daring, be different, be impractical, be anything that will assert integrity of purpose and imaginative vision against the play-it-safers, the creatures of the commonplace, the slaves of the ordinary." Sir Cecil Beaton

It is my hope that each of you makes a remarkable impact on your world in 2012.