By Kim Hagen - The commercial real estate industry is comprised of many professionals who fit the bill of the consummate professional. Regrettably there are also those at the other end of the spectrum who operate upon the premise that if they hang around long enough, and stick their hand out often enough, they’ll eventually get a piece of something. Over the years I have run across a number of brokers, capital markets professionals and developers that have deluded themselves into believing they had a real business with sustainable enterprise value when in fact all they really had was access to deal flow…
Very few industries afford the opportunity for high income and wealth creation like the commercial real estate industry. It is precisely this lure that attracts many would be entrepreneurs and deal makers to jump in the market and try their hand in the commercial real estate business. If I had a nickel for each time I met someone who introduced themselves as a “real estate developer”…well you get my drift.
While I would never begrudge anyone the opportunity to earn a living there is a substantial difference between being a curbstone operator glomming-on to a deal here-and-there and a true professional having a real business. Mind you that the distinction I’m eluding to has nothing to do with size, but rather everything to do with professionalism. I’ve witnessed the implosion of large corporations which appeared on the surface to be very sophisticated organizations, while I’ve observed small boutiques that appear to be fragile entities thrive and flourish. The commercial real estate industry has left any number of formerly high-flying trophy property owners in its wake, while many millionaires have been created through amassing a portfolio of small and relatively obscure properties.
So my question to you is this: are you just another deal junkie or do you have a real business with sustainable enterprise value? Your answers to the following seven questions should make it poignantly obvious as to whether you are a poser or a player:
- Do you have a vision that has been translated into a mission, which is used to drive a strategy, which identifies key objectives, which determines your tactics and drives your processes?
- Do you work on any potential deal that hits your radar screen, or only those that conform to rigor of the disciplines outlined in number 1 above?
- Do you provide a certainty of execution when you engage on a transaction or does the outcome of every deal you touch rest on a wing and a prayer?
- Do you have a recognized brand, a brand in stealth mode or a brand in decline?
- Is your business a disruptive force in the market using innovation to create market opportunities and separate you from the competition?
- Does your business have the capital, talent, knowledge and market share necessary to exhibit the staying power to endure market transitions and business cycles?
- Does your business create value in the market by adding value to the transactions you participate in, or are you just gravy-training the work of others?
So, what’s the outcome…deal junkie or sustainable enterprise? To the chagrin of many reading this article, they are not one in the same.