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CCIM Commercial Real Estate Outlook Conference 2016

Episode 352: 01-21-16

Jim Fried interviews real estate thought leaders at the CCIM Commercial Real Estate Outlook Conference 2016 in Miami.

Guests include:

Manny De Zarraga – Executive Managing Director at HFF

Jay Pelham – President at Miami-based TotalBank

Yan Khamish – Managing Director of Business Development Broker Channel at Auction.com

Sean Snaith – Director of the Institute for Economic Competitiveness at the University of Central Florida

Jonathan Raiffe – CIO/EVP for Adler Group

Michael T. Fay – Managing Director of Avison Young in Miami

Abel Iglesias – Executive Vice President & Chief Lending Officer at Professional Bank

Alexandra Brody – Client Manager at Auction.com

Alex Morcate – Co-Founder of RE Console

Boris Kozolchyk – Executive Vice President of Retail Services at Colliers International South Florida

Chere Roane – 2016 Florida CCIM Chapter President

Dr. William Hardin – Director, Tibor & Sheila Hollo School of Real Estate at Florida International University

George Riggs – Vice President of Commercial Real Estate for Auction.com

Jordan Shapiro – AVP, Business Development at Auction.com

Howard Taft – Senior Managing Director for Aztec Group Inc.

Ian Grusd – Principal, GreenGate Capital

Jack Lowell – Executive Vice President at Colliers International

Jeremy Larkin – Founding Member, NAI Miami

Michael and David Adler of Adler Group

Michael K. Silver – First Vice President CB Richard Ellis

Roberto Pedroso – Senior Vice President, Commercial Lending, TotalBank

Scott Lloyd – Principal, Lloyd Commercial Advisors

Sonya Canas – Senior Vice President, Commercial Banking Manager, Mercantil Commercebank NA

Frank Rodriguez Melo – Melo Real Estate

Julio Gonzalez – Engineered Tax Services

Steve Moreira – 2016 President CCIM Institute

Theresa Blauch-Mitchell – iCORE Global, Fort Myers

Tina Marie Eloain – Florida Commercial Group, Orlando

Todd Gladis – Senior Vice President, Auction.com

Tony Puente – Senior Vice President, Fairchild Partners

Episode 352: 01-21-16   (To download full episode, right-click and select “Save Link As”. Right-click on names to download individual interviews.)



Transcription:

Jim Fried: South Florida, we’ve got a great show for you today. We taped a bunch of interviews yesterday and the day before at the CCIM Commercial Real Estate Outlook Conference 2016. We’re going to go right to break, come right back and we’re going to have thought leaders like Manny De Zarraga from HFF, Jay Pelham from TotalBank, Yan Khamish from Auction.com TenX, Sean Snaith – Director of the Institute for Economic Competitiveness at the University of Central Florida and Michael T. Fay – Managing Director of Avison Young. I’m out. We’ll be back. It’s going to be awesome. Stick with me.

[commercial break]

Jim Fried: All right. We’re here with the man from Auction.com TenX himself, Yan Khamish, the fraternity leader back there. You got your whole crew here. Thank you for sponsoring CCIM in Miami. Yan, what suit this combination you’re having with CCIM? Why?

Yan Khamish: We love it. I think TenX, Auction, we’re on the same page. We’re about one thing and one thing only with broker community and that’s to educate. We’re a platform, we’re here to educate the community in how to use the internet, technology to market and close transactions better.

Jim Fried: So then really what this is, this allows people to be more efficient. Somebody can go out, pitch a deal and really have the power of an international corporate for quite a while, say for Google behind them. People like Google are behind you, you’re bringing technology to the table, cutting edge.

Yan Khamish: We’d love for people to go on the net to take a look at our podcast both for the residential sector and the commercial sector. We do those on monthly base with Google at this point. It’s a fantastic data of how the market is trended.

Jim Fried: Can people go on your site if they’re participants in your site? Do you get them under the hood and give them interesting statistics? The things you must collect and find out about the industry must be fascinating.

Yan Khamish: Absolutely. I think people can look at if they want to understand the movement of retail, the movement of apartments, corporate fluctuations, price per square foot in various markets. That data is out there and more collecting.

Jim Fried: And then you help use that to market and target your market and make the process more efficient, help people make more money? We had one of the guys on in from New York City, he got a 30% premium over his asked price.

Yan Khamish: We do a lot of things. We work for both the seller and buyer in a very effective way. I think our marketing process is incredible. At the end of the day, if you take a look at what we do for the industry, I think this year we’ve traded $35 billion in real estate.

Jim Fried: With the B, right? Lots of zeros.

Yan Khamish: We’ve traded $35 billion of real estate.

Jim Fried: That’s a lot of money in people’s pockets.

Yan Khamish: We feel that it’s close to $400 million in connections.

Jim Fried: You just made me speechless.

Yan Khamish: I’ll share with you. We have two components of our company. We have both residential and commercial side. The commercial component is roughly $13.5 billion – $14 billion and when I said $400 million that’s towards the commercial side. What you have is a platform that empowers brokers to spend their time wisely.

Jim Fried: That’s what it’s all about in brokerage’s time management. You only got that, that’s the most valuable asset. They’re not making any more of it.

Yan Khamish: I’m a recovering broker. I spent seven years with Marcus & Millichap in the bay area. The most precious thing a broker has is his time. And what I hated was my time being wasted. And what this platform empowers you to do, you know you have a 45-day marketing period, after that 45 days the auction is two days. In that two days people bid the price up.

Jim Fried: I bought on Auction.com, I’ve done it in the past. We made a good deal. We closed. The guy had certainty of execution and we had money. What a great match.

Yan Khamish: And you closed. How incredible-

Jim Fried: There goes part of your team. Bye folks, go make me a deal. Bring us deal. We need a deal.

Yan Khamish: You just said the most operative word – not wasting time and the most important thing. When I got into brokerage, the first few things people said ”Coming in a second is great for horse shoes and hand grenades”. In brokerage, unless you close you get nothing.

Jim Fried: That is correct.

Yan Khamish: What we have here is a closing platform. Our buyers are vetted, they’re real. They have money. They’re not syndicating the deal.

Jim Fried: At least they’re not until after they close.

Yan Khamish: But they got to close. They got to go hard. The premise of the reach rate. The seller hates the reach rate, the buyer hates the reach rate. We want to eliminate that.

Jim Fried: How about, what is it, the blackmail of the broker who says ”I’m not selling it to you unless you give me the lease and I get the financing”. That’s not really doing a fiduciary thing for the soul.

Yan Khamish: We’re here to make the process smoother. And I think you’ll find as we roll out TenX, you’re going to see three products. You’re going to see three products that are not just an auction product. You’re going to see a more traditional product, you’re also going to see a hybrid product. And as we come to brokers, right now we’re in the phase of teaching people what the platform is. We will get to a phase of ”Try the platform, give it a shot” and I think you’ll find it extremely effective. Why do you worry as a broker that you’re closing timeline as 182, 170 days. Ours is 90, sometimes 75.

Jim Fried: I want to make money. I want to do it now.

Yan Khamish: We’d love for you to make money.

Jim Fried: We got to end with that. I want to thank you so much for sponsoring the CCIMs, joining us here in South Florida. We look forward to joining your platform.

Yan Khamish: I really appreciate you hosting us. It’s not just South Florida. Over the weekend we signed a national relationship with CCIM. In every market we are the biggest sponsors of their national events. We look forward to supporting the mission of CCIM, fiduciary, trust, all those things are in line with what we’re doing.

Jim Fried: I feel it, I’m feeling it right here. You are the man. What great energy. Yan and the folks at TenX have done a great thing. We’re here, we’re closing up the happy hour. We’ll be back tomorrow with the information share of the conference. Thanks so much for sharing Yan. I appreciate having you here today.

Yan Khamish: Jim, so much. Thank you.

Jim Fried: Our pleasure. We’ll be back after this. Take it away. These guys are talking because we’re at the CCIM TenX Outlook Conference reception. We’re here with Mike Fay. Mike was like the leading broker on the TenX platform last year. What, you sell 300 properties for these guys?

Michael T. Fay: I got to tell you, TenX, formerly known as Auction.com has been really a phenomenal platform for us. And I got to tell you, we’ve had a great time. I’ve been dealing with TenX Auction.com since 2010. So this is our sixth year of dealing with them and I got to tell you it’s been a great platform. We’ve had a lot of fun with it and what the crazy part is is that every year gets better and better and the platform gets better and better. If you want to accelerate a marketing process, this is a great way to go.

Jim Fried: One of the things that I heard from a number of people is that this is just an auction. Isn’t this more like a technology solution that helps you sell properties?

Michael T. Fay: Let me tell you something. Right now, yes. That is totally true. We’ve done probably over 300 transactions. Me, myself personally with others within my firm and all others. So when you look at this, like I said it’s an accelerating marketing program, it’s a technology program. It gets in front of everybody and plus it does help. You’ve got to have the right seller, the right buyer and let me tell you, the numbers are really staggering when you really start looking at the metrics of each one. There’re thousands of people that open up, there’re thousands of people that look at each one of these deals, there’s hundreds that download confidentially agreements and there’s literally many people that participate in the auction on auction day. And believe me, I’ve seen many of these live auctions in-house at TenX watching them go on all of our deals. And that’s a lot of fun.

Jim Fried: You’re a guy that has an incredible network, you know a lot of people, you can sell property, you get good drag when you set a listing out there. What does a guy like you need technology assistance for?

Michael T. Fay: It depends again on the seller, it also depends on the market, it depends on the properties. So find this to be very good on a lot of income producing properties. I would love it if we can really hold it on the land and how to make that work. We make land work, it’s going to be a whole another situation but to answer your question, it’s real simple: it keeps people focused in a time frame that creates urgency. And that urgency gets people to go, buy, bid, click, win, close.

Jim Fried: So Mike Fay, top broker of Avison Young probably in the United States, probably at more volume than anybody else.

Michael T. Fay: Thank you very much, I love you for that, Jim.

Jim Fried: Okay, but you’re still using this technology platform that you’re an early adopter so if you had a message out there for somebody that’s in the hinterlands struggling to get marketing drag, what would you tell them?

Michael T. Fay: I would tell you: look at it with open eyes, look at it with an open idea because a lot of people don’t understand how it works completely. And you’ve got to really understand how it can benefit you. Now, again, Auction.com and TenX now has really changed a lot of things. They’ve gone out there and even proved how they’ve done their business, they’ve grown as a company. They’ve grown on how they market, their platform has increased. So when you really look at it as an early adopter I got to tell you, Jim: it was tough at the beginning. A lot of people were like ”No, I don’t want to be involved in this, I don’t want to do this”, a lot of people were also saying ”What about them by being the better”. I said it’s no different than being at a credit bid at a foreclosure auction. They’re going to bid up to a reserved price which most of the time you don’t know which is okay because it creates the urgency, it creates the mystique if you will, and it takes you all the way down the road. And what happens is they never bid over their price. Debunk all those problems or issues that people think they have, let me tell you, forget being a great seller’s platform, it’s a great buying platform. You know why? It takes away a lot of the other issues of people saying ”By the way, if you buy it from us you need to give us the listing, you need to do this, you need to do that”.

Jim Fried: That’s the worst part of the whole marketing process.

Michael T. Fay: So the key is you got to get a non-adulterated view at exposure of your property and by the way, it’s real time. So a lot of times a lot of people like a normal marketing process where they widely market, they normally market it and all of a sudden, guess what happens? This you what the bidder is bidding, you know there’s three or four other bidders, it’s all good. So we got all these good things happening. So I enjoy it and I can speak for hours on this because I’ve done it.

Jim Fried: You speak for hours on everything.

Michael T. Fay: This one I can go five hours on.

Jim Fried: That’s why I have you on my radio show. Michael T. Fay, managing broker here in Miami at Avison Young, top broker for Auction.com now TenX saying why he likes the platform. What’s my one takeaway, Mike?

Michael T. Fay: Be open do new ideas.

Jim Fried: I love you. Mike Fay, thanks for being on the show. We’ll be back with our next interview from the CCIM TenX forum. Back after this.

[commercial break]

Jim Fried: We are back and I’m excited. I know it’s going to sound like I’m just you know what and you know what. We’re here with Dr. Sean Snaith. He’s the head economist up at the University of Central Florida. He is the go-to guy for real estate information on Central Florida. We are so happy to have you and I’m sure you studied the rest of state too. Dr. Snaith, welcome to the show.

Sean Snaith: My pleasure. Thank you for having me.

Jim Fried: It’s my pleasure. I know you’re the keynote speaker here. Give some of the audience a taste of what you told the CCIMs so that they come next year to hear the whole thing.

Sean Snaith: I think we talked about two things, the nature of this recovery which now is over six and a half months old and we talked about the forecast. And the two are now non-related. We went through a historic recession, the great recession as it’s now known as the worst downturn since the Great Depression.

Jim Fried: Yes, I feel that pain. I think people still do.

Sean Snaith: They’re still evident, absolutely. The recovery that’s followed in a wake of this recession is historic as well. It’s been historically weak.

Jim Fried: I don’t want to go into the micro, macro, why all that’s happened. I’d rather talk about the impacts. As we move forward I actually think that a relatively weak recovery, slow recovery is good for South Florida because South Florida is a binge market. So if we’re going a little bit slower, which it seems like we are, I think soft landing is the term I would use.

Sean Snaith: I think there’s one way to look at that. If you look around the economy, often times during expansion periods the seeds of the next recession are sown. And in the last case, of course the with lots of time around we had a housing bubble.

Jim Fried: Everybody should have a house.

Sean Snaith: That’s true. Whether or not they can pay for it, that’s a separate question.

Jim Fried: I always pay for their house.

Sean Snaith: Somebody pays. 2001, it was .com and over investment and IT that ultimately brought that recovery in the recession. So you point here as well. We haven’t been growing very fast so there’s no white hot sectors of the economy, maybe we can-

Jim Fried: Condos are going to get absorbed, this is not over building I can really see and end game there, the lenders are shutting it down, you see the signs but you don’t see the movement anymore on the dirt. I know that it’s impossible almost even financing apartment building now. So it seems to me like the places where we can really get out of shape are kind of under control.

Sean Snaith: I would agree. The bubble that we went through last go around was really inflated by the sugar high of easy finance. Anybody could get a loan.

Jim Fried: Hold on. I have to fog up the mirror here. I just got a loan.

Sean Snaith: There you go. You need a pencil. You need to fill a lot of form at least.

Jim Fried: No, doctor, no doc loans.

Sean Snaith: Good point.

Jim Fried: Heloc that I got on the phone when I called, I won’t mention the company.

Sean Snaith: No job, no assets, no worries. That’s not going on right now and I think your point is right. I don’t think we see a bubble that’s going to burst and lead to this horrific downturn. That thing said, you got a weak economy that’s sort of just jogging along, a big enough shock might be enough to knock it into, I don’t think it’s going to be a repeat of the last recession and the next recession is not going to be like the last one. No two are exactly like but-

Jim Fried: I think that this expansion got a little bit of the boost on the end from the tax break that we call the dropping oil prices. On an inflation of just the basis, it’s cheaper to fill up your car now than it was in 1965.

Sean Snaith: And oil prices fall again yet today. However, consumers are not spending all of this oil windfall. We see more spending on going out to eat at restaurants but overall, consumer spending-

Jim Fried: New housing starts.

Sean Snaith: Consumer spending really decelerated in the fourth quarter last year.

Jim Fried: I think people have long memories. And if somebody is giving me a bonus and I know that we’re getting towards the end even if I’m not an economist, I think people in the United States know what happened last time. And if they had the opportunity to feather their nest a little, so what about savings rates? Are those going up?

Sean Snaith: They’re up. And I think that’s-

Jim Fried: I can’t believe I asked that question.

Sean Snaith: You’re right. What hasn’t been happening is wage and salary growth. And what would you much rather have? A monthly savings on how much you spend on gasoline which could reverse itself next month or the equivalent dollar amount in your paycheck each and every month? I think wage growth would boost spending much more robustly than the windfall from cheap gas.

Jim Fried: Yes, obviously. My real question is the fundamental one. I really don’t want to get too granular or too micro when we talk about 2% or 3% GDP or anything. But really, how do we get back out of the 1$ GDP? I know we’re not going to see Jeb Bush as 4% but how do we get to 2,5% to 3% again?

Sean Snaith: One thing I talked about, Jeb Bush is 4% notion really leans on scaling back, rolling back, revisiting, all the laws and regulations. We foisted on this recovery a tremendous burden with the Dodd Frank financial regulatory reform law.

Jim Fried: The bankers here, they can barely breathe when I talk to them.

Sean Snaith: This is the way it is across the countries, especially community bankers.

Jim Fried: They’re the most important part of our economy though. I interviewed three community bankers, I think that between them they had about two seconds of oxygen left.

Sean Snaith: Exactly.

Jim Fried: And they’re great people. They want to do deals.

Sean Snaith: That’s right. And the affordable care act, these are two massive laws, lot of paperwork, lot of complexity, neither has been fully implemented yet. They were passed five and a half years ago. That says something about the law. If it takes more than five and a half years to implement it, maybe that law is too big and too complex. I think the next administration has an opportunity to revisit some of this what we’ve done, what did we really need. A lot of it, I don’t want to play.

Jim Fried: We don’t do politics, we don’t do that, we just inform.

Sean Snaith: We were scared. That was a scary recession, that was a scary financial crisis so we pass laws to try to fix every possible nuisance that had anything maybe to do with it. And we’re five and a half years out. Let’s take another look when that fear is not as intense. Let’s see what the consequences were, what can we fix, what can we tweak, what can we roll back to get this economy growing again.

Jim Fried: Glitch bill. Sean, I want to have one takeaway. What’s one good takeaway that you can leave the listeners with? I really think it’s time to break. What do you think?

Sean Snaith: I think we ended 2015 with momentum to start 2016. I think the rest of the world is the drag right now. I think what’s happening in China, I think Brazil, potentially Brazil is in the worst recession right now since 1901. They currency has lost 56% of its value against the US dollar. Canada spent the first half of 2015 in recession.

Jim Fried: And I didn’t realize. These are two of our biggest economies here in Florida.

Sean Snaith: Very important for tourism. The loonie, the Canadian dollar has lost 20% over the past year against the US dollar. What’s expensive for Canadians is really expensive for Brazilians to come here and spend money and that’s a thing to keep an eye on. I think that’s going to take a little lift out of the economy, especially in a tourism sector. Will it blow everything off track-

Jim Fried: Dr. Sean Snaith from UCF, the oracle of information from UCF. Thank you for coming. We look forward to having you on. I think we need to do something with all the real estate programs one day.

Sean Snaith: That would be fantastic.

Jim Fried: I’m going to get you all together. From the 10th annual CCIM Outlook Conference. All right. We’re here with Jay Pelham. He’s the new president of TotalBank. Jay, congratulations on the new spot. What’s your vision for TotalBank?

Jay Pelham: Our vision is continuing a lot of things from our past, continuing to make a lot of loans in the local community, supporting commercial real estate but changing some things, trying to be faster and more effective and how we deliver our decisions.

Jim Fried: You know what, Jay? I didn’t even ask you to put on the headphones so you can hear me ask and answer my questions. How’s that?

Jay Pelham: That’s great. I look cool too.

Jim Fried: You do. We’ll get some dorky pictures.

Jay Pelham: Yes, let’s take some pictures.

Jim Fried: All right. Here we go. Photo up. Now, you’ve taken over the bank and it sounds like you want to send it in a direction that makes a lot of sense locally for the community banks. The big banks are big but what drives business in our community is the community banks. What is your outlook for this year and what’s one new initiative you’d like to see TotalBank do?

Jay Pelham: It’s a tough market for community banks out there. When you look at the compliance cost and what the government has imposed to run a bank, it’s hard for the smaller banks. And I think we’re the perfect size. We’re locally run about $2.8 billion in assets and it allows us to be nimble but it allows us to be big enough to make the bigger deals too. I want to continue to see us on the same road trajectory, we made almost $600 million in loans last year.

Jim Fried: Very nice. We’ve done a lot of business with you from Aztec. Aztec were into deals. We love the service we get at TotalBank.
Jay Pelham: I think keeping the best elements of our past and bringing in some new folks we’ve added a private banking group. That’s something new in the last few months and we’d like to grow that area, we’d like to do more business with professionals, professional firms, lawyers, doctors, accountants, other professionals. And this is something that I’ve had a lot of personal experience in and we’re bringing in some other folks at due as well.

Jim Fried: I know that all my experiences with you throughout your banking career have been nothing but exemplary and professional. I look forward to continuing to build my personal relationship with you and the bank and look forward to having you back on the show.

Jay Pelham: I appreciate it. I look forward to wearing these headphones again.

Jim Fried: You should do that. But you also have to put on your pot on your head so that you really look like you know what you’re doing. Hold on. Jay Pelham, TotalBank. Thank you so much for coming in and doing good banking for our community.

Jay Pelham: Thank you very much. Thanks for having us.

Jim Fried: We’ll be back after this with more great interviews from the CCIM Outlook Conference. Jay, keep that on there. That is great stuff. Back after this.

[commercial break]

Jim Fried: We’re back with more interviews from the CCIM TenX pre-conference party. We’ve got Miami president Frank Rodriguez. Frank, what’s your title these days?

Frank Rodriguez: Immediate past president. And I have the honor. This is important. CCIM Institute marketing at large.

Jim Fried: That’s great. You got a longer card now. You’re unbelievable. We’ve got Julio Gonzalez, ETS, one of the show sponsors. Julio, welcome back.

Julio Gonzalez: Thanks for having me back.

Jim Fried: My pleasure. Of course, we got big Steve Moreira, national president of CCIM. We are making it happen here. Steve is up, the celebrity, the ladies are taking up pictures. Steve, ladies’ man, what’s going on at CCIM Auction.com? Tell me more about this.

Steve Moreira: Great to be here tonight. It’s really a fabulous event. It’s nice to see Frank, it’s nice to see Julio and so many friends in Miami gathering here at Graziano’s. The food is great, the crowd is fantastic and we’re rocking and rolling all night long after a long day in commercial real estate Miami Florida.

Jim Fried: Frank, you put all this together. Tell me about the relationship that you and TenX are building here in Miami.

Frank Rodriguez: We realized that with TenX, prior Auction.com they really are a resource and CCIM is about education and it’s about networking and creating additional resources for practitioners. And basically we realized that we share this in common and it’s a common grain and that basically we can coin that and increase this relationship and help the market be more efficient at the end of the day. And that’s why we went with this great relationship.

Jim Fried: Frank, what do you think is going to happen tomorrow with this event? Tell me a little bit about preview of the event? What do you see happening?

Frank Rodriguez: Basically what we have is it’s sold out, by the way, we had the close registration.

Jim Fried: High five.

Frank Rodriguez: Thank you. We closed registrations, we put on a great event, all of our volunteers are very committed, they give the very best. We provide a concise explanation of what’s happening in the market, what are people supposed to expect within this year as an activity. We have an economist, we have someone from industrial, multifamily, office, retail, we have the best experts coming and telling us what’s happening in the market. And we do it in a concise manner, the 11:30 everyone is out and gone and that’s what people really like about our conference here locally.

Jim Fried: It’s great, but you got to be concise with your answers too. I love you man, I love you. I want to give Julio some time. Julio, tell me about your relationship with the CCIMs and how that’s been working for you.

Julio Gonzalez: It’s been amazing. We were really blessed to get into this with Steven and we’ve had a wonderful relationship following him around the country at the different events and really being part of the family.

Jim Fried: You said it best when you said family because I know that Steve really tries to bring a family environment to the organization. Steve, tell me a little bit about what your plan is for CCIM this year.

Steve Moreira: We’re looking at networking events like this really all around the US. In LA on 20, let’s go back. In Miami on 24th, 25th we’re going to be with the RealShare folks at apartments. It’s at the Thompson Hotel down in Miami and then we’re rocking out to the Beverly in 23rd and 24th March out to LA and from there we’re going down to Houston. What we do at these events basically is as we lay out the market and we have some very strong speakers in every area and partnership with ALN media many times or TenX or Auction.com and now we have Julio jumping on board with Tax Service Engineering. Cost segregation is an incredible product add when you purchase a property. And what we’re really doing at CCIM is we’re just trying to improve the commercial real estate industry and business and get if flying at a very high level whether you’re doing a transaction for $500 000 or $50 million our experts across the country can help you in every way.

Jim Fried: And I think that’s the real thing that we’re talking about here is that you got experts, you’re teaming up with the execution platform of Auction.com which gives certainty of execution. It sounds like what you’re really doing is bringing education technology to your people.

Steve Moreira: That’s absolutely right. And highest level of accounting methods, way to save money in taxes, way to finance deals in a better and easier perspective on the entire financing capital stack and the transaction and we’re just working it hard every day, every angle, every market in the country.

Jim Fried: Steve, I know that it’s getting a little hot in here. Somebody bring Frank on and tell me, Frank, locally, what’s your plan with Auction.com coming up? Let me rephrase it, TenX.

Frank Rodriguez: Locally with TenX, they’re going to continue to be an educational resource and an alliance and what they want to do is to make their product or their sales forced ready to understand the variables that CCIMs understand. That means opening classrooms, doing different workshops together so that the market further understands and is able to exchange and do deals together in a more efficient way. So that’s the way the TenX relationship is going and utilizing that platform because CCIMs are looking, most of them from the boutique standpoint, they’re looking for ways to simplify and have additional resources that make their businesses easier to transact every day.

Jim Fried: I want to give Julio the last word. Every time we have a CCIM with you on the show and remember, we’re always scheduling you and the CCIMs together. You didn’t realize that, did you? They all want to do cost seg so last word to you, what does cost seg bring to the CCIMs?

Julio Gonzalez: It means that those clients can be tax efficient in [inaudible 00:41:55.25] real estate and be able to depreciate right off the buildings, upfront versus over 40-year period so for the clients and the members it’s wealth preservation.

Jim Fried: It also sounds to me like wealth creation. We got to give them some loans, Steve. We got to do some loans and some sales off that cost seg. I want to thank Steve Moreira, the CCIMs, ETS, my sponsors, Frank, you are the man. Of course, we want to thank TenX for bringing us out today to this conference. We’ll be right back after this short break. I love you Frank. You’re the best.

[commercial break]

Jim Fried: We’re on with one of my oldest and dearest friends, Manny De Zarraga, he’s one of the original partners at HFF. You’ve got some big long title. What is it?

Manny De Zarraga: It’s Executive Managing Director, a grand poobah.

Jim Fried: There you go. I like grand poobah, the hat is a lot better.

Manny De Zarraga: That’s what my dog says.

Jim Fried: Your position on the Executive Committee of HFF gives you an overview of the entire country and probably the world and what’s going on. So let’s talk capital markets for people that just haven’t been to all the big fancy meetings that you are. What’s the feel out there as we go into 2016? We had a little up ticking rates, a little bit of a wandering around the world about what’s going to happen, lower oil. What’s the real impact on capital markets?

Manny De Zarraga: The world is in a state of major upheaval led by China, The Middle East, corruption issues in South America etc. And all of these issues and problems are really driving capital over at the United States. Real estate is probably one of the greatest beneficiaries so that’d be as the hard asset. And there’s nothing better for somebody that have capital from overseas to invest in something that they can come and touch and feel.

Jim Fried: So you’re telling me that things just haven’t changed? The United States is still the safe haven market for a world in turmoil.

Manny De Zarraga: Unquestionable. And things like gold, for example haven’t been doing all that great despite all the issues.

Jim Fried: That’s really surprising. Oil keeps falling so where are you going to go? Commodities are depressed. You got to be in hard assets.

Manny De Zarraga: You have to be in hard assets and for now while the US economy continues to do well, it’s going to continue to drive the demand for hotels and demand for renting and stores, shopping centers, etc.

Jim Fried: Your big shots are calling and many turn that over and don’t get distracted. What that really means then is that even though there’s a little upward pressure on cap rates because interest rates are rising just from arithmetic thing that the demand for property may actually keep those cap rates low.

Manny De Zarraga: Correct. I think that demand will keep those cap rates low just competition for assets. And the fact that property performance will continue to improve while the economy continues to improve so if you invest in a low cap rate today then income is probably going to go up and you’ll be at a much better place in a year or two.

Jim Fried: What is the HFF relationship with CCIMs? You have a bunch of CCIMs that work at HFF.

Manny De Zarraga: Sure. We have a number of CCIMs throughout the country and they are phenomenal colleagues and teammates, very well prepared and very much up to speed in terms of industry trends.

Jim Fried: It sounds to me like the CCIMs are creative to the HFF platform and do your capital business in general.

Manny De Zarraga: Unquestionably, we find a good one out there to hire them.

Jim Fried: That’s a leading economic indicator as well then. We talk globally. How about just two seconds on South Florida?

Manny De Zarraga: South Florida is absolutely defined well as a gateway market for institutional capital. Just like at New York, at San Francisco, etc., the driver is the amount of international activity that comes through. It’s not just dependent on local economy as economy is much more diversified. And economy has significant influence on it. Economy with these challenges from in terms of issues with poverty, transportation, etc., as many of the other economies-

Jim Fried: Social commentator?

Manny De Zarraga: Need to make that no.

Jim Fried: I understand. Listen, if we don’t get pull to side it sounds like we’re simply promoters.

Manny De Zarraga: Exactly. We’re making pushes as a city and an area in that regard.

Jim Fried: It sounds like it’s really important. Manny if you wanted to give one takeaway, what would it be?

Manny De Zarraga: Commercial real estate will have a great year in 2016 and if Donald Trump becomes president, we’ll have a developer in the White House and we’ll see Trumpic hair for the real estate industry.

Jim Fried: We’ll all have hair helmets. We’ll be back after this with more. I want to thank Manny for being our clean up here on the CCIM 2016 10th Annual Outlook Conference. That’s almost as long as your title, Manny. All right, we’re here with Todd from Auction.com. Todd is the voice and face and the man that moves the needle at Auction.com. Todd, thanks for joining us today.

Todd Gladis: Thanks for having me.

Jim Fried: I finally got somebody good back on the other end of the radio. Todd, tell me a little bit about what’s going on as Auction.com evolves into TenX and what your role is there.

Todd Gladis: It’s exciting times for us. Auction.com is becoming TenX. We’re rebranding as TenX and becoming a platform of the future for real estate brokers, commercial real estate brokers. We’ve been selling online for many years, $35 billion, over $200 million commissions paid to brokers. We’re excited about the future as TenX moving forward, got some great products coming out in March. We’re excited.

Jim Fried: If I’m a real estate practitioner out in the field, how do I work with you and why would I?

Todd Gladis: It’s pretty simple. We work with our brokers every day, they bring deals to the platform, they themselves to the platform, we help them, we are the platform to help them move that property, maximizing exposure through a lot of digital marketing, minimizing the risk on the deals, date certainty on the closings and helping them scale their business. So it’s very easy for them to come to us, come to TenX.com and start that process of putting that deal on the platform within days.

Jim Fried: To me, the word that’s most operative there is ‘platform’ because everybody needs a good platform to execute business, they’ve got their CCIM, we got the CCIMs here that you’ve teamed up with Steve I think he is really enjoying it over here giving us the business over here on the side as we’re doing the interview. Why CCIM?

Todd Gladis: CCIM to us is all about education. It’s all about forming real estate brokers that this is the way to go, this is the future, technology and no better place to start that what Steve and the guys at CCIM. We started working with them last year and we feel like this is a partnership of the future to bring technology, to bring a platform, to inform the educated great commercial real estate brokers, putting them all together.

Jim Fried: How does somebody get started? I have a deal I need to sell, I think I’m going to use TenX. What’s my next step?

Todd Gladis: You give us a call. Or hit us up online at TenX.com. And within days we’ll take a look at that property, we’ll get it up on the website and before you know it, you’ll have bidders, buyers from all over the country taking a look at that property and starting to evaluate it.

Jim Fried: I know that real estate is also a people thing. So there’s people at TenX too, aren’t there?

Todd Gladis: There are a few of us. And those people are excited to work hand in hand with our broker partners to get the deal done.

Jim Fried: So then somebody who’s a little bit technologically technophobic or something, they shouldn’t be afraid to call you. In fact, it sounds to me like you’ve a setup that accepts and helps those people.

Todd Gladis: It’s super easy. If you don’t know Google, if you don’t know the internet, it’s okay, you can come to TenX.com and we will get you started to get that deal sold as quick as possible.

Jim Fried: We met some of your, I don’t know, are you calling them customer service people or representatives that help people market it because to me, somebody that’s uncomfortable the first time, the first experience is important. How’s the first experience if I come there?
Todd Gladis: It’s actually rather easy. It’s straightforward. We try to make it as simple as possible because it’s all about working that relationship and making sure that that individual has an opportunity to sell his deal and our buyers, bidders love the platform too. They love the transparency, they love the certainty of it, they understand that they have the ability to place their highest and best. It works for buyers and sellers alike.

Jim Fried: It sounds like it works for everybody and it’s all about making money for everybody and getting a good clean execution. Todd, I want to thank you for sponsoring the CCIMs. We look forward to continuing to work with you, building our relationship. What a team for 2016 and beyond.

Todd Gladis: Thank you for having me. You’re professional. I love working with you.

Jim Fried: You’re the best. Back after this. All right. That’s Jim Fried here at the professional talking live now. What a great event that was. I want to thank the CCIMs and TenX for having us and sponsoring us, I want to thank South Florida Business and Wealth Magazine, UHealth, KIND Snacks, The NFL Alumni, Social Media 305, The Miami Marlins, Lauren’s Kids, Bruce Turkel, Publix. Shout out to Publix. We’ve been talking on Twitter all day today. The Aztec Group, The Bergstorm Center for Real Estate Studies, and of course, thank you to our listeners. I got more. I want to thank EarlyShares, Xpresso Marketing, Magnum Energy Solutions, Engineered Tax Services, how could I forget Julio. Remember, if you missed today’s show, it’s going to be on our webpage www.friedonbusiness.com. This is Jim Fried for Fried on Business, look for us on 880 AM next Thursday at 6:00. Why? Because I think by now I love this. Remember, this is not a rehearsal, this is your life. The person that wants to do something finds a way, the other finds an excuse. Now go out there and make it happen. AC, yours.

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