June 2009
Strategic Asset Management Planning
More than a Brokers Opinion of Value
Presented by Mark J. Mayfield & Randy Graham
Managing Directors, Sperry Van Ness – Rock Hill, SC
Valuing a property or portfolio even in the best of market conditions is a subjective exercise. This subjective exercise is only further complicated by nature of the fact that we clearly don’t have the luxury of a robust commercial real estate market on our side. So my question is this: Have commercial real estate values hit the bottom, will they continue to fall, or are they already starting to recover? In many cases the answer to the aforementioned questions can vary based on the quality of the asset, the property’s asset class, the type and quality of the tenant mix, the property’s location, supply and demand drivers such as new construction starts, absorption and vacancy rates, capital and credit availability, and any number of other factors which makes planning difficult at best.
Owning commercial property during these challenging economic times can perplex even the most savvy and sophisticated principals. It has been my experience that challenging economic times require both superior strategic planning and excellent tactical execution. That being said, I’m always amazed at the number of commercial real estate owners, individuals and institutions alike, that don’t have a Strategic Asset Management Plan (SAMP) in place for their portfolio. In fact many principal owners are so truly reactive in their approach to dealing with fluid market conditions, that they don’t do any planning unless they’re forced to do so.
If I only had a nickel for each time in the last 2 years I’ve been told by owners “that there really isn’t any need for planning because my hands are tied given current market conditions.” As a professional real estate advisor I can state with great certainty that it is precisely when you think your options are limited, that the need for strategic planning is most paramount. Moreover, unlike robust markets that will be forgiving of operational mistakes, tactical execution must be near perfect levels to survive down markets, and consistently great tactical execution only occurs when a sound strategic plan has been put in play.
In the text that follows I’m going to make the case for a paradigm shift in traditional business logic used by commercial real estate owners. I’m going to challenge the reader of this article to justify operating in a status quo fashion, when what they should be doing is just the opposite.
My justification for the thoughts I’m about to share are born out of real world experience and the practicality of common sense. The reality is that those who invest in a strategic planning process simply do better than those who don’t. Why would anyone choose to be among the latter group as opposed to the former? Beats me, but it happens every day…
Just Listed!
Investment Property
Medical Sale/Leaseback – 8.75% CAP
Sales Price: $1,451,000
In 1996, Mark Mayfield and Randy Graham started in business together and in 1999 started their own company Southern Commercial Real Estate, LLC (“SCRE”) in Rock Hill, South Carolina located 15 miles south of Charlotte, NC. With a successful track record and established entity, SCRE expanded its services and national reach on January 1, 2007, by joining forces with a nationally recognized leader in commercial real estate brokerage, Sperry Van Ness, to form Sperry Van Ness/Southern Commercial Real Estate, LLC.
- Sperry Van Ness was founded in 1987, when Rand Sperry and Mark Van Ness created a commercial investment real estate firm with one key mission: To create unprecedented value for commercial real estate investors. Today Sperry Van Ness is one of the largest, most respected and fastest growing commercial real estate brokerage firms in the industry.
- Sperry Van Ness currently has more than 1004 advisors internationally.
- Sperry Van Ness is located in more than 150 cities across the US, as well as in Costa Rica and Panama.
- Sperry Van Ness completed over $11.6 billion in sales and leasing transactions in 2007.
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Mark J. Mayfield
Managing Director|BIC
Randy Graham
Managing Director
1926 India Hook Road | Rock Hill, SC 29732
803.325.1000 | 803.325.1214 | www.svn-scre.com | info@svn-scre.com