Few would argue that the country’s economic downturn, though officially long over, isn’t still making life challenging for commercial real estate professionals. Though deals are happening more frequently now, with spec projects popping up across the Midwest, it’s still far from easy to close deals today.
Just ask a key official with Cassidy Turley.
“Before the downturn, I could tell you what a property would sell for and how long it would take to sell. That certainly wasn’t the case during the downturn,” said David Stokes, vice president in the Minneapolis office of Cassidy Turley. “Now it is starting to get better, but I still can’t tell you how long it will take to sell your property. It’s a very unpredictable world.”
The good news is that deal activity is steadily improving. Stokes says that the commercial real estate industry is “very much on the mend.”
At the same time, most of Stokes’ buyers and sellers today are typical, meaning that they’re not financial institutions and they’re not involved in workouts. That’s another good sign for the industry, and more proof that CRE is firmly in recovery mode.
“The glacier is just starting to melt,” Stokes said. “There was for a time zero activity. Then the unpredictability came. Usually you know how long it will take to sell a building. Everyone makes money. Everyone is happy. That wasn’t the case during the downturn, but I think we are slowly getting back to that point, or at least closer to it.”
Stokes points to a deal he made about a year ago. A national lender and a pair of community banks — all of which he was representing — called Stokes within a two-week period. They each wanted properties sold and off their books by the end of the year. Stokes said that it would take two to three years to get solid prices for the properties.
The lender and banks didn’t care. They told Stokes to sell them for what he could get.
“They just said to do it,” Stokes said. “The properties sold for 10 cents on the dollar, and that was some beautiful land and sites.”
That doesn’t sound positive, but Stokes said that deal was the sign of better things to come.
“It was the dam breaking,” he said. “People were finally buying. Banks were finally in a position to unload some of their properties. That was the sign that it was going to get better. Now we are seeing more typical deals. Banks are back to financing. It’s a good sign.”
A long career
Stokes, of course, has seen both good and bad commercial markets. That’s what happens when you enjoy a long and successful career in commercial real estate.
Stokes did, though, take a different path to the real estate business. He earned a master’s degree in city planning from the University of Pennsylvania. This led to a job with the state of Minnesota in economic development. He then worked for the city of St. Paul, Minn., before moving on to the Saint Paul Port Authority, the city’s economic development agency.
When Stokes hit the age of 40, though, he had a decision to make.
“I could either be a government guy for the rest of my career — which would have been OK — or I could broaden my horizons. I decided to go that latter route. That’s when I moved into brokerage.”
Stokes has since spent 17 years in commercial brokerage.
“When I look back at my career, it looks a bit like I’ve jumped around. But I’ve always liked working with people. I’ve always liked real estate transactions,” Stokes said. “I’ve always been interested in real estate, whether working in brokerage or in city planning.”
And what has kept Stokes in the industry for nearly two decades? He points to the variety that comes with selling commercial real estate.
“Every day is different,” Stokes said. “And the job is very entrepreneurial. It’s a bit like working for yourself. I like steering a commercial transaction from beginning to end. When you’re doing city planning, to get anything to fruition would take two to 10 years. The agency you are working for has to buy the land, remediate pollution, get permits. It takes a long time. My attention span isn’t that long. Real estate transactions take less time. They can take from two months to two to three years. And there’s a lot of complexity in the transactions. They can be a lot more complicated. That gives you the variety that keeps things interesting.”
When Stokes isn’t working, he focuses on his family. His daughter is now attending college and, according to Stokes, “doing great. Watching that happen is lot of fun.”
He and his wife also own a cabin in Wisconsin that they retreat to for fishing and outdoor activities.
Stokes is an outdoorsy person. He and his wife are fans of biking, jogging, golfing and hiking.
“My wife grew up in northern Wisconsin. I think it’s a God-given right that if you grew up there you need a cabin on the lake somewhere,” Stokes said.