The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.
Having a long-term horizon and focusing on making the right partnerships can make all the difference in your success as a commercial real estate investor. In terms of “long-term horizon”, many initially believe this means looking 3 to 5 years in the future, but the real goal should be looking 10 years ahead or more. As you’re looking for that perfect partner, find the one that fills in your gaps to make a more complete picture.
Richard Wilson: What are the top 3 insights you could share on being an effective commercial real estate investor?
Ben Marks: Great questions. The top three. I’d say the first is to have a very very long term perspective and a very long term time horizon. And I think a lot of people say that, in my experience even in the commercial real estate industry not a lot of people actually have that. If they have it they think long-term is 3 to 5. What I’ve found in my time in through a lot of clients we’ve worked with and advised is, and learned through their mistakes, is usually the shorter the time horizon people have the more mistakes they make because if you buy it right, and you’re buying good market that’s stabilized and an asset you understand, and you hold it long enough, right, and you can hold it through bad markets and you can hold it through downturns like ’08-’09, like we’ve had recently with Covid, usually time fixes most of those small mistakes. It won’t fix, you know, structural mistakes and if you’re buying obviously an office building in New York you have different considerations. But aside from those outliers, having a long-term horizon, being just obsessed with risk and downside, and then just making sure you A) have the right partner, and if you don’t what the right partner looks like, I could spend a whole hour on partners but in short I’d say as far as the partnership goes figuring out what you’re good at and what you’re not good at, and bringing in a partner that is basically the opposite of yours is able to fill the gaps that you have. In our example, we don’t do a ton of marketing we haven’t needed to, so when we looked at partnerships, partnering with a marketing expert is appealing to us because that’s not, sort of, that’s not what we specialize in, we’re number crunchers at heart.