commercial division weigand quarterly
TRANSCRIPT
COMMERCIAL DIVISION WEIGAND QUARTERLYSeptember 2020 | 2nd Edition
PRO-CORNER
1)
FEATURED PROPERTY• Located near heavily traveled intersection of 21st St. N & Webb Rd.
• Lot 3 features high visibility along 21st St. North
• Near well-established hospital, retail, dining and banking businesses.
• Well-established residential communities surround the development.
• Easy access to K-96 Highway.
LOT 3Site Size: 49,502 SF (1.13 Acres)Taxes: GENERALS: $10.15 SPECIALS: Contact Broker
LOT 4Site Size: 117,672 SF (2.7 Acres)Taxes: GENERALS: $23.82 SPECIALS: Contact Broker
SALE PRICELot 3: $16.00/SF; Lot 4: $7.50/SF
PROPERTY HIGHLIGHTS
We asked some of Wichita’s finest real estate pros to share what they are seeing in the industry right now. Our pros are the ones providing guidance and structure as we navigate through the challenges facing our economy and society in recent
months. Four local pros representing different areas of the commercial sector share their insights.
PRO-CORNER....CONTINUED ON PAGE 2
Greatness through character and determined expertise.
Morrie Sheets | 316-292-3972 | [email protected]
George LahamLaham Development
President
Ben Gartner, CCIMJ.P. Weigand & Sons, Inc.Sales & Leasing Associate
Whitney Vliet WardJ.P. Weigand & Sons, Inc.Sales & Leasing Associate
Ryan FarrellApartment Association of Greater Wichita
Association Executive
WHAT HAS CHANGED WITH LANDLORDS, TENANTS, AND LENDERS?BEN GARTNER: The market is highly variable at this time, so it is difficult to make generalizations. COVID regulations imposed by various governing authorities at all levels differ drastically from one geographic area and market sector to another and change frequently. As businesses try to deal with regulatory compliance, they also must deal with the feedback loop of changing behavior from their customers as they react to business specific policies and governmental regulation. Generally, I am seeing landlords get more aggressive with their concessions and offerings, especially in office and retail. Industrial has remained fairly strong. Larger regional and national tenants have generally slowed down expansion to new markets unless there is a specific reason to go there. Local tenants are a mixed bag, but I am still seeing many purchases, expansions, leases, etc.
Webb Rd. & 21st St. North, Wichita, KS
2)
WHITNEY WARD: We have seen so many things occur in the last 6 months. The Covid-19 pandemic caused a widespread disruption to the US office market in the 2nd Quarter. Many offices moved their workplaces home during shelter-in place mandates. During this time, the tours were managed by virtual tours or Zoom/Team calls. We hope to see the office leasing market rebound in Q3 and Q4. It will be interesting to see how companies respond to the office re-entry and handle the potential 2nd wave of the virus. On a local level we are seeing tenants not renew their leases and keeping employees at home. However, we are also seeing many companies finding a way to safely keep the workplace open. Ironically, during this time of such uncertainty, we are seeing the market very busy with listings and subleasing on the rise in the office market. We are also seeing office clients looking for larger space to follow the social distancing guidelines and foster in-person collaboration.
GEORGE LAHAM: Coming into 2020, there was already plenty of change in the retail sector with the consolidation of retail companies and the overall impact of online shopping. The events of 2020 have just accelerated a trend that was already forming. At Laham Development, we had already begun evaluating our developments and had started to focus on diversifying from retail centers to net leases, particularly national restaurants like Texas Roadhouse, McDonald’s and Chili’s.
RYAN FERRELL: Like most, the multi-family rental industry has faced many challenges these past six months and will continue to face many of those issues for the months to come. Prior to COVID-19, cash flows for the last decade had been steady. Now, landlords have tenants either with health issues caused by the pandemic or have remained healthy, but been furloughed by their employers. In either case, it effects the tenant’s ability to pay their bills. In order to keep these tenants, who had a great payment history up until this point, landlords have been offering rent reductions or deferred payment plans to help those in need.
WHAT CHANGES ARE YOU SEEING TAKE PLACE IN THE WAY THINGS ARE DONE?
BEN GARTNER: Tenants are asking for “COVID clauses” in new leases to mitigate uncertainty brought about by governing authorities. These are often tough clauses for landlords to accept as they incur a large amount of risk.
WHITNEY WARD: Many things are going virtual. I recently signed up for a video class on how to promote commercial properties online and through social media. Companies are seeing a rise in their sales from the social media exposure. For a long time this has been more of a focus for residential, but believe it is on the rise for commercial as well.
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FEATURED PROPERTY: AUCTION• Former Broadway Animal Clinic.
• Private offices, large reception & waiting area, multiple examination rooms, operating room, kennel, medicine and equipment storage.
• Building can be easily converted to conventional office or retail use.
• Plenty of front door parking.
• Just minutes from downtown business district.
• Ready for immediate move in.
THUR., OCT. 1, 202012:00 PM CDT
SITE SIZE
LIVE & ONLINE PRE-BIDDING
13,068 SF
YEAR BUILT1960 & 1998
BUILDING SIZE1,844 SF
Register to Bid Online atWeigandAuctions.com
PROPERTY HIGHLIGHTS
Kevin Howell, Auctioneer | 316-292-3971 | [email protected] Schroeder | 316-292-3946 | [email protected]
3036 S. Broadway, Wichita, KS
3)
GEORGE LAHAM: While we have taken steps to diversify from retail centers to net lease properties, Bradley Fair was not one we were willing to let go. This project will be 30 years old on November 8, and it continues to be one of the most desirable retail locations in our city. Through our partnership with J.P. Weigand & Sons, we have been able to attract great retailers and restaurants to the Center that might not have considered Wichita as a target market. Beyond being a regional destination for shopping and dining, it is also a destination for the community through the variety of events that we host throughout the year, including Summer Concerts, Celebrate America, Opera on the Lake and Autumn & Art.
RYAN FERRELL: Leasing offices have changed dramatically this year and many of those changes may become permanent because they are found to be more efficient. At many communities now, future residents can tour the entire property, their specific future home, fill out an application and sign a lease without ever setting foot outside of their house. There will be many that prefer this virtual method long after COVID-19, especially those coming from out-of-state. Several offices have also moved to a ‘by appointment only’ schedule for in-person tours and prefer this more controlled, personal experience with prospects. And of course, you can’t go into any place anymore without being greeted by hand sanitizer and masks.
WHAT ARE MOTIVATED CLIENTS LOOKING FOR RIGHT NOW?BEN GARTNER: My most motivated clients are largely the same ones that would have been motivated without COVID. Office and retail landlords are looking for tenants, but to a greater degree now, and industrial product is still in high demand.
WHITNEY WARD: I am receiving inquiries and interest most in Multi-family, Industrial and Medical. We are also seeing the mortgage rates drop under 3%. This is a huge incentive right now for investors and owners to refinance.
GEORGE LAHAM: Clients continue to look for the fundamental characteristics that are always important in retail: great location, great visibility, and great tenant mix. The underlying real estate and the residual use of the real estate and improvements is important to buyers and developers alike.
RYAN FERRELL: With many tenants working from home successfully, their employers may not require them to come in for 40 hours a week again. With these changes, renters are going to be less concerned with where they are in the city, but will be attracted by places who have superior internet connectivity and an extra dedicated office space. If they can’t even smoothly get through a Zoom meeting because of building infrastructure, that will be reason enough to look elsewhere. And if they are tied to their home 24 hours a day, other on-site amenities and entertainment increase in importance.
PRO-CORNER....CONTINUED ON PAGE 4
FEATURED PROPERTY• South Rock Road end cap retail space with drive thru capability.
• Existing in-ground grease trap.
• Open area & 600± SF office.
• 2 ADA restrooms
• Former fitness training use.
• Pole & building signage available.
SITE SIZE2,800 SF
BUILDING SIZE24,353 SF
YEAR BUILT1988
ZONINGLIMITED INDUSTRIAL; CRITICAL AREA OF INTEREST - MCCONNELL AFB
LEASE RATE$10.00/SF, GROSS
PROPERTY HIGHLIGHTS
Marty Moody | 316-292-3942 | [email protected]
2626 S. Rock Rd., Ste. 100, Wichita, KS
4)
WHAT OTHER CHANGES DO YOU FORESEE IN THE NEAR FUTURE?BEN GARTNER: The businesses with little margin for error will continue to falter over the next several months, creating vacancies due to default. The economic damage snowball is still rolling. Landlords that have less holding power and are highly leveraged are already feeling pressure. Many have already gone to interest-only or tried to get payments deferred. More to come.
WHITNEY WARD: I think companies are going to have to look at their business in a different way . . . more creatively. Companies are going to need to find a way to be more current and accessible in the digital market. Uber was formed after the global financial crash of 2009, so we may see many new companies boom out of this challenging time. We may also see a repurpose of office properties for residential use. In our world today, relationships are more important than ever and the right financial advisor/bank will be critical to access capital and close deals. It remains to be seen if the commercial real estate market will come all the way back after Covid-19, but I am hopeful that we will all work together to find new creative solutions to help and support our clients.
GEORGE LAHAM: The trends we were seeing before 2020 will likely continue. Consolidation of retailers and increased online shopping are part of the future of retail. Retailers that have reinvested in their business - keeping things fresh and staying with trends - will lead the pack while those who haven’t will struggle to keep up.
More retail centers will try to create an experience rather than just a shopping trip. In addition, these centers will be looking to create an ideal mix of tenants that will bring customers to the property multiple times a week, creating a stronger, deeper relationship with those customers. These goals are most easily achieved in lifestyle center concepts like Bradley Fair where we have concerts, Opera on the Lake, art shows, yoga classes, and many other activities that attract the community to the Center.
Retailers themselves will need to be creative and create more of an experience for their visitors that is more engaging than the competition. Entertainment venues and restaurants will become the true anchors of retail centers and will drive traffic for the brick and mortar retailers in the area. Examples are Trader Joe’s, Newport Grill, Chicken N Pickle, and Topgolf. These retailers stay ahead of the curve by finding ways to engage their customers in new and creative ways.
RYAN FERRELL: As compared to other cities, it has been a welcome surprise to see many of the communities in Wichita not only stay afloat, but excel in occupancy since the pandemic began. It is still nervous times for landlords not knowing how much of that was because of government assistance or personal reserve funds that could be running out soon. Another huge factor is if another eviction moratorium gets put into place, and that will be decided soon. Will it help keep tenants in their homes? Yes, but it is a short-term band-aid. Continuing to push these payments down the road will only cause an amount to be owed that most tenants will struggle with. On top of that, landlords will lack the resources to keep up with repairs, pay employees and other financial obligations. Hopefully Congress can come to an agreement for rental assistance instead, a win-win for both the tenants and the landlords.
THANK YOU PRO-CORNER PANELIST!
George LahamLaham Development
President
Ben Gartner, CCIMJ.P. Weigand & Sons, Inc.Sales & Leasing Associate
Whitney Vliet WardJ.P. Weigand & Sons, Inc.Sales & Leasing Associate
Ryan FarrellApartment Association of Greater Wichita
Association Executive
5)
MY HOW THINGS HAVE CHANGED
Morrie SheetsSales Associate
It’s great to be back in the business that I love. In June, I was welcomed by J.P. Weigand & Sons, Inc. - Commercial Division after having been out of the business for several years. After 20 years of full-time brokerage, I had taken a break and did some development work throughout the Midwest and pursued some other business opportunities as well.
WOW, have things ever changed! Everything moves at a much faster pace these days. Systems are set to allow you to move from listing to contract to closing in a much more expedited manner than in the beginning of my career. Paper forms are almost non-existent, and everything is electronic. The ways we did things before seems completely outdated, and the commercial real estate brokerage industry seems different and a little less personal.
I used to hold 6 AM meetings with clients over coffee, but today’s clients have given way to Zoom calls at the end of the day. This technology brings great efficiency to the deal that just didn’t exist in the past. It allows you to accomplish more in less time.
I remember drafting contracts until the early morning hours, just to have to retype them to make a small revision as the deal developed. Today, these changes are made in minutes. I remember filling my car with gas three times a week because I had to go onsite to gather the information needed to provide a complete listing. Now, you can access all that data in a few minutes and never leave your chair to do it. I had to “drive for deals” to find the buildings that needed my services and I picked up my clients and drove them around all day to look at spaces. So much of that is replaced by virtual tours and online databases. Sometimes the driving was a bust, but I got to know Wichita and I got to know my clients.
Information and how well you manage it is a huge component of today’s brokerage industry. Everything from deals, surveys, taxes, owners, utilities, traffic counts, demographics and comps are all available with a few keystrokes. With the easy availability of information, the expertise of the broker and how they can interpret and explain that information is the real competitive tool. Hiring the right broker with the right expertise and experience is what the client should be focused on.
I have been fortunate in my career to have worked for some of the finest real estate professionals in Wichita, in Kansas, and in the country. Names like Dan and Frank Carney, George Ablah, Colby Sandlian, Tom Devlin, Bob Geist, Jamie Coulter, Ron Ryan, Wink Hartman and many others. It is great to now add Nestor Weigand to the list. I’ve seen these pros go through good times and bad times, but I’ve learned a lot from them. Now I get to learn to do business in a new way, but I recognize that nothing will ever replace the experience and knowledge taught by real pros in the industry.
One thing I learned from them, that has not changed, is that hard work, relationships and salesmanship are still the keys to succeeding. Some things never change. They all had unbelievable work ethics and didn’t judge success based on how many hours you worked but by what you accomplished. They were committed to achieving their goals and their commitment was nothing short of inspiring. They were always willing to share their knowledge and experiences with others.
I’m excited to be given the opportunity to learn and grow at J.P. Weigand & Sons, Inc. After 30 years in commercial real estate, I’m glad to be back to helping people find a place to operate their business or a place for an investment to grow. Much has changed but much has remained the same.
J.P. WEIGAND & SONS, INC. - CHARITY GOLF CLASSIC
CHARITYGOLF CLASSIC
On October 9, 2020, the first J.P. Weigand & Sons, Inc. Charity Golf Classic will take place at Terradyne Country Club. Some of Wichita’s finest will put their golf skills to the test to support Big Brothers Big Sisters of Kansas®.
Thank you to all of our sponsor who will be featured in our next quarterly newsletter. Your support of this event is making a difference in our community.
Josh Turner Johnathan Weigand
316-262-6400 316-292-3956
In every company in every industry, leaders are continually faced with new challenges and a constant wind of change. Today’s business world is changing more rapidly than ever, and the last few months have brought more change than most of us have ever seen. All employees have a responsibility to move with change, but as leaders we have the responsibility to manage that change effectively. This is a huge key to the success of any operation. Here are some tips to help you navigate change in your organization.
1. Leaders must be aware and recognize that change is happening, then we must recognize the impact and plan an appropriate response. Leaders often over-respond or under-respond which can make a problem into a disaster. The challenge is providing a well thought out and balanced plan to keep business moving ahead.
2. The first key is – don’t panic! When we initiate a response without first analyzing and thinking through the details of the situation, we will almost always “over-correct.” Rarely is a situation made worse by taking a breath, gathering a set of reliable facts and asking all the necessary questions before initiating a path forward.
3. Be prepared – stay informed of what is happening. Research facts and don’t get caught up in the trending stories. It is better to make an informed decision tomorrow than an uninformed or misinformed decision today.
4. Always ask, “Why?” - Why is this system essential? What is the impact of the circumstances? What is the impact of the changes I am making? Is there a reason that things are done as they are? Do I understand the whole process? Fully understanding the process prior to trying to change it will help to ensure that the new process will be effective and successful. Understanding the “Why?” is essential to making a good decision.
5. Include the people on your team. We’ve heard the phrase, “Two heads are better than one.” Making decisions about change in a bubble will almost always end badly. The people executing a process are the ones who understand it best, but many times we see that leaders have a broader understanding of goals.
6. Resist the “but that’s how we’ve always done it” crowd. Many have said that these are the most expensive and destructive words in business. Just because it worked well in the past doesn’t mean it is still the right solution. Business, the world and life change constantly, and if we don’t learn to adapt, we will become obsolete.
7. Most importantly of all - remain calm. There is no reason to act like the building is on fire unless, it is in fact on fire, and then you should remain calm anyway. If you panic, your team will panic and then the decisions all the way though the organization will be rushed and not well thought out. If you follow a process and remain calm, your team will follow that example as well.
“Progress is impossible without change, and those who cannot change their minds cannot change anything.”
- George Bernard Shaw
Sincerely,
Josh Turner
6)
REAL TALK WITH JOSH
Joshua TurnerV.P. & General Manager
Commercial Division
Johnathan Weigand316-292-3956
7)
Whitney Vliet Ward316-292-3900
Mike Weber316-292-3959
Morrie Sheets316-292-3972
Bradley Tidemann, SIOR316-292-3947
Austin Swisher316-292-3902
Grant Tidemann, SIOR316-292-3908
Tony Utter, CCIM, JD316-292-3940
Mark Schroeder316-292-3946
Leisa Lowry, CCIM316-292-3945
Brad Mitchell316-292-3918
Bree A. Russell, CCIM316-292-3963
Marty Moody316-292-3942
Christi Royse, CCIM316-292-3919
Krista Lowry316-292-3990
Cristi Howell316-292-3980
Randy Johnston316-292-3913
Kevin Howell316-292-3971
Calvin Klaassen316-292-3976
Mike Loveland316-292-3915
Kane Greenleaf316-292-3917
Philip Bernstorf316-292-3938
Auddie Cordero316-292-3953
Randy Bowles316-292-3960
Levi Fitzmier316-292-3981
Ben Gartner, CCIM316-292-3967
Steve Barrett, CCIM, SIOR, ALC316-292-3943