A Broker’s Reflection on a Retail Assemblage
Having been a broker for the past 12 years, one of the main reasons I joined forces with Inland in early 2014, was our leadership’s encouragement and support of brokers pursuing diverse types of CRE transactions. To explain, most brokerage firms today utilize a silo internal model wherein the brokers are required to focus solely on a specific asset type (i.e. land, industrial, multi-family, etc.) and/or geographical territory. However, Inland encouraged me to pursue a much broader knowledge base which allowed me to gain experience in a wide range of asset and transaction types. After working on a multitude of projects in my first year with Inland, it was this unique model that provided me an introduction to the world of retail assemblage and re-development.
In late 2014, I listed a successful and operating independent ethnic grocery store located in southwest Chicago. The property is situated at a signalized corner of a major intersection and just off an interstate exit ramp. This highly populated area has a number of many new, but smaller retailers, resulting in a boon in the CRE transactions over the last 18 months. However, I knew this site was absolutely prime for the nationals and I could bring in the big boys for a significant real estate play. We initiated our strategic marketing campaign and within 60 days I secured an offer from the developer-buyer.
This developer has many years of experience in retail development. After the attorneys finalized the purchase agreement, the developer engaged me for the assemblage because his tenant needed additional land to meet their parking requirements. I went to work. I approached the neighboring owners (a retailer and a residential user) to ascertain their appetite to make a deal. I had already laid the groundwork for this knowing what was to come. I vigorously pursued both adjoining owners. After many meetings, some late into the evening and playing my cards in perfect order, I successfully secured contracts on both neighbors at prices where the developer could make the numbers work. I was so caught up in the hunt, the art of the deal if you will; a smile came upon my face when it hit me that I had also increased my commission substantially by creating three transactions, not one. This was fun! As one could imagine, the timeframe for an assemblage like this can be considerable. There were several requests from the buyers to extend the due diligence periods. Navigating Chicago’s political and legal channels, local community advocates, tenants’ requirements, and dealing with three separate albeit inter-dependent clients was a major undertaking. Nonetheless, the assembly transaction closed in October of 2016. It was a great personal accomplishment because it was truly a win-win for all involved, sellers, buyer, tenants, local community, City of Chicago & me, the broker. Although many in the industry say keep it simple, this “shirt-sleeves-up transaction” and Inland taught me not to shy away from the complexities of CRE, as few can do it. But we do it, and we do it well. I now actively seek these types of opportunities and have been successful in constructing two additional assemblages since.
By William D. Dozier, Jr.