Walk through any town in Canada and you’ll undoubtedly see signs on lawns and billboards promoting local brokerages.
Evidence of a thriving residential real estate market is so ubiquitous that it’s easy to forget there’s another, equally prosperous side of the business: commercial real estate.
Commercial real estate is a multi-faceted business that includes leasing, sales and redevelopment, each offering distinct challenges and opportunities. The Edge newsletter spoke with two experienced commercial REALTORS® about this segment of the field and the unique opportunities it brings. Both say they find commercial real estate very fulfilling.
Norair Yeretsian, owner of Envoy Capitol Realty Inc., Brokerage in Toronto, has worked in commercial real estate for 31 years. “I graduated from the University of Toronto during the ‘80s recession, and real estate offered the best employment prospects,” he says. “I’m entrepreneurially oriented, so it attracted me like a magnet.”
He obtained his real estate licence, but as a new university graduate, he lacked confidence and sales experience. “I tried to learn as much as I could and completed all of the Ontario Real Estate Association courses,” he says.
Yeretsian was recruited by a residential real estate company that provided marketing and sales training. He was then sent out to knock on doors and scour phone directories to find sales opportunities. Although he was successful in residential, he prefers the more pragmatic approach of commercial real estate.
After an extensive job search in a slow market, Yeretsian found a position with a company that leased properties at shopping centres across Ontario, and he hasn’t looked back since.
Commercial real estate is less emotional than residential, in his view. “A logical, rational approach comes through. It’s more about the numbers. Companies are more concerned if a property is in the right location for employees and customers, and whether there’s an appropriate labour pool nearby. The way the light shines through the window is immaterial.”
Finding appropriate properties and financing deals is challenging in the commercial world, he says. Most commercial properties aren’t listed on a board’s MLS® System and no commercial equivalent to the Canadian Mortgage and Housing Corporation exists. Much of his work is with industrial buildings, what he calls “old and dusty” manufacturing or warehouse properties.
“You have to do a lot of digging and research even to find the property owners, because they’re often numbered companies,” he says. “The client base has also changed. These days about 60 per cent of commercial inventory is in the hands of pension funds, real estate investment trusts (REITs) and life insurance companies.”
He enjoys being able to see the beginning, middle and end of a deal. “I meet the clients and determine their objectives, find something to fit their needs and then see them using that space or enjoying that investment opportunity. It’s gratifying and there’s always something to learn.”
Continuous learning is one of Yeretsian’s mantras, and he walks the talk. Since 1988, he has been sharing his expertise with others in the industry as an instructor for the OREA Real Estate College and has written a few books about commercial real estate.
“I wanted to improve my presentation skills in front of people, and it has become an addiction," he says. “I fell in love with teaching.”
Learning has also characterized the career of Michael Saperia, a commercial broker and vice-president of The Behar Group in Toronto. He has practised commercial realty for six years after 20 years on the residential side. The lessons he learns in the field are key to the appeal that commercial real estate holds for him.
“I love the challenges,” Saperia says. “You have to know a lot because the business is becoming more and more specialized. I learn something every day from someone I meet.”
As a young man, Saperia came to real estate from the corporate world. “I decided that if I was going to work like a dog, I wanted to be compensated,” he says. He moved into real estate and plunged into the residential market. Throughout his time in the residential business, about 10 per cent of his work was commercial. In 2008, he moved exclusively to the commercial side.
Saperia loves the complexity of commercial real estate. “It’s as challenging and frustrating as can be, but it’s incredibly rewarding when a deal comes together.”
Redevelopment work is his favourite, although it’s a long-term endeavour. “You have to find a site, acquire it, have feasibility studies done on things like density, financial feasibility, traffic, shadowing and noise – and then there’s the project itself,” he says. “It can take years. But there are very few areas of the Greater Toronto Area where I go that I don’t see some project I worked on. It’s very rewarding.”
Dealing with people from all parts of the globe and all walks of life is another appealing aspect, he says. “They have great individual stories and great success stories.”
A co-operative approach guides Saperia in his work. “I bring people together and assist them in getting what they want,” he says. “If a buyer wants the space and a landowner wants to sell it, I try to work through the issues to see if we can make it happen.”
Anyone in the redevelopment business “has to be a bit of a gambler. The pros who do this are very smart people. You mitigate the risks by doing a lot of research in advance. Part of my job is to assist clients with that up front.”
Whereas a residential REALTOR® may close many deals in a year, their commercial counterparts often work on far fewer deals over a much longer period of time, both sources note.
Many redevelopment projects fail to pan out regardless of the level of effort, Saperia says. “There are huge risks because of the costs. It can take years to put a deal together. We work on a lot of different projects and most of them don’t come together.”
Challenges notwithstanding, both Saperia and Yeretsian believe commercial real estate is a satisfying, rewarding career path. They also have advice to share with others tempted to follow in their footsteps.
“Find a mentor in the business -- someone you know and trust who has a good reputation,” says Saperia. “Really work with that person. It’s a great way to learn.”
Yeretsian, a self-avowed “numbers person,” suggests that young recruits start out in a research and development department where they can hone their research skills and learn the commercial environment while supporting a sales team.
He also recommends choosing commercial real estate early in one’s career, developing good work habits such as time management and creating a solid database.
“Clients expect us to have good product knowledge and thorough research skills,” he says. “There’s a real need for competence and excellence.”
Sourced from: http://www.orea.com/Members/EDGE-Newsletters#commercial