In Good Times and Bad: Brokers Overcoming Their First Economic Downturn
December 1, 2023 6 Minute Read
When Jay Olmstead joined CBRE Edmonton in January 2021, the industrial real estate market was on fire. Like a miner in a gold rush, Olmstead was sifting through an abundance of opportunities to help clients maximize the value of their real estate decisions.
As the industrial market began to cool off and opportunities grew scarcer, Olmstead had no choice but to recalibrate. Like many Gen Z and Millennials, Olmstead now finds himself working through his first economic downturn.
“This is a significant moment in my career so far and has been a good learning experience,” he says. “When times get tough, transactions fall through. Staying in front of clients helps to understand where they are at as the market shifts, and consistent prospecting helps you keep the pipeline full so you’re not depending on just two or three deals.”
Businesses look for certainty and long track records in their brokers during inflection points, which can make it difficult for junior brokers to get a foot in the door. Olmstead hasn’t let that deter him. With the support of his eight-person team, which he calls his “encyclopedia of knowledge,” he has focused on differentiating himself through grit and a value-add approach.
And it’s yielding results.
On Olmstead’s first day of door knocking, he came across a group looking to move. They expressed interest in purchasing a building but weren’t ready to do so at the time. Olmstead remained in contact with them, regularly sending potential listings, nearby sale transactions and relevant reports.
A few weeks ago the group reached out to Olmstead asking for his assistance in purchasing a plot of land in Leduc, where they want to construct their own building.
“I’d been in touch with them for nearly two years before things moved forward,” he says. “It made me realize how long the sales cycle can be and what customer services really means.
“It’s critical to stay in front of prospects, even when they’re not ready to buy or lease. So you understand them most, show that you have their best interests at heart and be the one they call when they need help.”
But Olmstead says prospecting is only part of his recipe for success. He credits his team for playing a big role in supporting him throughout his brokerage journey.
“I feel honoured to be part of this group,” he says. “I’m fortunate to have access to unparalleled mentorship, knowledge, opportunities and support, especially from our Client Coordinators, Sam Houk and Jessica Jefferys. They are the reason I have the time to prospect every day.”
Going the Extra Mile
“The current economic climate has been challenging for all brokers, especially those with an office focus. However, it has challenged me to be a better advisor to my clients,” she says.
“I’ve had to take a step back and look at my clients’ real estate more holistically – how it fits into their business plans, impacts their operations and supports their people in doing their best work.”
Ollek now approaches transactions in a more creative way. She has implemented innovative marketing strategies, positioned deals in original ways and leveraged new resources and partnerships to better support her clients.
“I experienced the heyday of sub-2% office vacancy. Leasing office space today is entirely different than it was in 2019,” she says. “These days, each decision requires much more consulting. You need to understand your client’s business in depth and leverage real estate as a tool to help them achieve their goals.”
Brokers are also more involved in advising on office utilization and build out, as companies look to establish their workplace strategies, emphasize their culture and bring employees back to the office.
Ollek sees this as a chance to learn and enhance her client service. “Change creates new opportunities,” she says. “Operating in a downturn has pushed me to go the extra mile in fostering client relationships.”
Learning the Right Way
The next generation of real estate leaders is also benefitting from the support of industry veterans as they help clients though this moment of change.
Evan Stewart and Emelie Rowe have been part of Toronto North’s Land Services Group since 2017, working alongside some of CBRE Canada’s top brokers. The collective experience and wisdom of those sales professionals has helped Stewart and Rowe better navigate the downturn.
“The economic climate has significantly impacted the dynamics to buying and selling development land. It tends to be the first asset class to be impacted by a downturn, as purchasing decisions are based on market expectations in the future,” says Stewart. “We’ve had to pivot our strategy from primarily representing private owners to working with lenders and receivers.
“And that shift has been made easier because we have partners who have been through this before.”
Since these clients are not the property owners, but rather third-party groups, they often require more guidance and support on the nuances of real estate transactions.
“Court-ordered deals require more due diligence to ensure highest and best use for the properties,” says Rowe. “We take the time to teach our clients and provide policy-based guidance so they can make informed decisions.”
“Having seasoned brokers like Mike Czestochowski and Lauren White behind us reduces the number of roadblocks we encounter,” says Stewart. “We get to learn the business the right way from people who have experience in good times and in bad.”
“Having the opportunity to work alongside industry veterans is not something I take for granted,” adds Rowe. “Not only do we get to learn from their broad range of expertise, but we also have exposure to deals and connections that we wouldn’t encounter otherwise.”
From the left : Evan Stewart and Emelie Rowe
Taking Care of Business
“CBRE has some of the top office leasing teams, an incredible network and a huge market share,” he says. “I wanted to be part of that. 'Despite today's challenging market, my passion for the industry remains unchanged.”
“Having more mentors can only make me better,” Huxham says. “Brokers who have done more deals can better predict challenges and suggest solutions based on what they’ve been through. My team’s guidance has already taught me so much.”
Having worked through previous downturns, Huxham’s mentors have impressed upon him the importance of prioritizing business development and relationships in difficult periods.
From the left : Jack Gaudreau, Nathan Stattmiller, Kayla Zakuta, Marc Mizrahi, James Huxham
“There’s never been a better time to have dialogue with clients,” says Huxham. “Tenants want to know about the opportunities on the market and what their competitors are doing.”
Office leases might be moving slower at the moment, but Huxham knows it’s not the time to be idle.
“Although we find ourselves in uncertain times, I'm confident the office market will pick up again. As an advisor, it is important to foster relationships now as clients will remember the connections built throughout the tough times.”
That’s wisdom for the ages from Olmstead, Ollek, Rowe, Stewart and Huxham, and they are still in the first act of their careers.
It won’t be long before they are guiding someone through their first downturn.
The prediction offered by CIBC World Markets’ Benjamin Tal during a one-on-one conversation with CBRE Canada President & CEO Jon Ramscar at CBRE’s Market Outlook Breakfast in Toronto on Feb. 26.
CBRE’s new Canada Real Estate Market Outlook forecasts that commercial real estate investment activity will recover in 2024 as credit conditions return to normal.
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