What, Who You Know Count for Commercial

Inside Cvr 6-6-05

Its a toss up which has more horsepower ??” Mark Brewers collection of sports cars or his acumen for building business contacts.

The owner of Real Assets Inc. in Fayetteville, Brewer was known three years ago primarily as a Fayetteville residential real estate agent. About 30 percent of his portfolio at that time was commercial, and his brokerages total sales were about $7 million.

That figure has since spun around to 70 percent commercial, driving last years sales to $21 million like his 2003 Jaguar XKR zooming zero to 60 in 4.2 seconds.

Brewers name recognition has jettisoned northward, too. His bright red and blue for sale signs are plunked out in front of prominent properties along the Interstate 540 corridor from Springdale to Lowell.

Relationships, Brewer said, are what enabled him to shift gears. The pairing of knowledge and contacts, he said, is a more valuable commodity than ever with increased competition in the commercial sector.

Brewer, 47, still holds the designations of Certified Residential Specialist, Graduate Realtor Institute and Accredited Buyers Representative. Hes even the 2005 state president of the Arkansas Chapter of CRS. But he has become one of a growing number of brokers whove taken Northwest Arkansas commercial segment for a test drive and liked the ride.

Cultivating

Brewers most pivotal client relationship started a decade ago when in 1995 the Knobke Brothers of Kansas City, Mo., were looking to open a building supply store near the intersection of U.S. Highway 412 and Interstate 540. Brewer suggested looking a little farther north for a better price per square foot.

The Knobkes wound up buying 22.5 acres for $380,000 just off the Wagon Wheel Road exit. They eventually sold off a couple of acres to Hertz Equipment Rentals, which still operates its store there, and kept the rest to develop.

Sixteen months ago, the Knobkes sold the remaining 20 acres to Rick Parker for $1.2 million. Two months ago, Parker turned it again to Leo Anholts Five Point LLC development company for $2.5 million.

At each transaction, Brewer was chosen to broker the deal.

I stayed with the Knobkes, Brewer said. I helped them keep up the property over the years, make minor improvements here and there when we could. And when I came across the right buyer, I just put the two together.

Parker, who co-owns five car dealerships in Little Rock and Northwest Arkansas with his brother, Dave Parker, said Brewer even shored up a lot of loose ends for him as a buyer.

The property didnt have sewer and some other stuff, Parker said. He put a lot of pieces of the puzzle together, and it just worked out. After that deal went so well, we decided to do another one. I liked The Pinnacle Groups property up the road at I-540 and [Arkansas Highway] 264 that was going to be the water park.

It was just a case where no one had asked about buying it, but Mark went up there and asked and they sold it.

A number of potential buyers have been shopping the former water park property, Brewer said. They include a hotelier, a convenience store operator, some law firms and some retail outlets.

Brewer said Anholt got a bargain for the Wagon Wheel Road space at about $3 per SF. When Five Point is done developing it, he said, it should be worth at least $10 per SF, or about $8 million.

Some of my growth has been long-term relationships, Brewer said. My clientele has gotten a little older, been prosperous and diversified into other areas and interests. Some of it is also a new influx of people looking for Northwest Arkansas investment property.

On [June 7], for instance, Im meeting a group at the airport thats flying in on a jet to look at commercial deals. A lot of people want someone wholl work closely with them rather than just the biggest broker.

Nurturing

The local boards of Realtors dont track the number of area commercial real estate agents. But by all accounts, the invasion is on.

Pat Morrison, director of the commercial department of Harris McHaney Real Estate in Rogers, has been a commercial broker since 1980. He said nowadays more than just agents from neighboring cities are interested in Benton County.

Morrison said the Northwest Arkansas retail vendor phenomenon is behind all the development activity, making the area akin to Dallas in the 1970s or Austin, Texas, in the 1980s.

His commercial team includes Fred Wanger, Tom Holiman and Jerry Horton. Together, the foursome does $40 million to $50 million in annual commercial sales, up about 15 percent from 2000.

The people moving in are not only buying and selling properties, a lot of them are bringing agents with them that they already know and trust, Morrison said. It means more competition, but we also work with those people. A lot of times the out-of-town folks want an established local commercial broker they can partner with.

Were not wringing our hands about the competition. Were happy to see it. Splitting commissions is just a fact of life these days.

Harris McHaney is the epitome of a stalwart, Chamber of Commerce-friendly shop. Pat Harris founded the firm in 1997, and Morrison, 56, said it thrives on repeat business and clients that want its institutional knowledge.

Twenty to 30 percent off our business is just knowing the market and putting parties together before they might even have to put up a sign, he said.

Morrison said the Harris McHaney commercial group prides itself on not forcing things with customers, but offering a service and letting the client decide.

Replanting

Amanda Caudell, an agent with Lindsey & Associates Inc. in Fayetteville, is cutting her commercial real estate teeth at Bob Hopmanns Fayetteville office. Hopmann is a veteran Lindsey broker who mostly flies under the radar and shies away from media coverage.

Caudell, 23, along with rookie cohort Jeremy Kennedy, said learning from Hopman is like getting a doctorate in building relationships. The two are 2004 graduates of the University of Arkansas and Baylor University, respectively.

The [Bill] McClards, the Hopmanns, the [Steve] Finebergs, they know how to make long-term relationships and keep them, Caudell said. You could probably say the majority of their business comes from return clients. You can have one client that can make you, and you never know who that will be.

You just cant say enough about how important it is to get out there and meet people and let them know what you do.

Brewer said the key for young brokers, after establishing those contacts, is maintaining the perseverance and integrity needed to represent both parties in a given transaction well.

Tina Enelbart, a real estate investor in Dallas, Texas, said shes used Brewer to sell 16 properties for her in the last five years for that very reason.

He goes out of his way for his clients, Enelbart said. He lets me know whats out there and available, but hes more than a real estate agent. Hes a sound financial adviser.