Every line of business has its pundits who like to refer to the business as being a sort of game. I don’t dismiss this notion, and actually am a believer that game theory has its place in real estate. Every game has an objective, a set of rules, a concept for what it takes to win, and of course players or participants. Who are the players in commercial real estate? This article explores that very issue.
First, let’s look at this from the investor side of things. Every market has investors, large and small, who are interested specifically in commercial caliber real estate. Some of these are what I call Tier One investors, who look for small to medium-sized commercial buildings. Tier Two investors look for even larger buildings (exclusively so) and Tier Three investors are perhaps the biggest players of all, responsible for developing new properties.
While this player breakdown is pretty loose and definitely unofficial, I think you get the general idea. Some investors are finders of properties and some are creators or developers of properties. Any and all of them may build funding for their projects through collaboration with others but all are people you would benefit from knowing in your area as you start building your own business. These players may have deals to offer and some may be interested in collaboration so these contacts are essential.
Next, we have professional players, who would include personnel like commercial realtors, bankers, appraisers, property managers, contractors, bird dogs and the like. As you can imagine, these players are also very important but they are more from a supporting role to help get things done in the world of commercial real estate.
It is no less important to know the professional players because, without them, you will find the business of commercial real estate much more difficult to navigate. A great way to build a business is to start assembling a team of professional players, who will both help introduce you to investor players, but will also give you more credibility when you make contact with other investors.
Last, we have the behind the scenes players, who would include city or county officials, code enforcement reps, planning and zoning specialists, architects, and engineers. These personnel are no less important to playing the commercial real estate game and are arguably the most integral, given that seasoned investor players regularly and effectively use behind the scenes players as a part of their successful formula.
When you embrace the game aspect of commercial real estate and recognize that there are indeed players you must recognize, your own ability to play and play to win will go up dramatically. When this happens in this business, profits are soon to follow.
Dave Lindahl is one of America’s most successful, hands-on, real estate investors. He has written 3 best selling books: "Commercial Real Estate Investing 101" co-authored with Donald Trump, "Emerging Real Estate Markets" and "Multi-Family Millions." Dave Lindahl is a regular guest speaker at CT REIA. Go here for the current list of upcoming real estate investing seminars in Connecticut.