When calls come, commercial Realtors say they?re got to jump

If he were to enter the fast-paced world of commercial real estate today, Geoffrey Keys admits he probably would have chosen another field altogether.

Business deals in the area’s commercial real estate industry have dropped, on average, about 25 percent in the past two years, cultivating new and different ways to do business in this dog-eat-dog occupation.

The 25-year real estate veteran and principal of Boulder-based Keys Commercial learned the business through the school of hard knocks.

?You have to market differently,? Keys said, ?since so much space is available.?

According to recent statistics, downtown Boulder alone has approximately 24 percent of its office space vacant. Boulder’s professional office vacancy rate of nearly 7 percent is the lowest in Boulder and Broomfield counties, with Broomfield showing a nearly 60 percent office vacancy rate.

Broomfield’s commercial/research and development space fares better with a 19 percent vacancy rate, while Boulder’s rate stands at 21 percent and Lafayette shows a whopping 51 percent void.

Keys said investment deals dropped about 40 percent in the past two years.

?Investors want great deals,? said Paige Coker, broker associate with The Colorado Group Inc. ?Prices have not reached the ?great deal’ price.? But she has seen an increase in the number of owner/occupied spaces with less than 4,000 square feet. And due to low subleasing rates, many renters are taking advantage of good deals.

Keys sees the trick to business survival as cooperating with other commercial brokers. This includes exchanging information and offering another broker’s property to an interested party, rather than lose a customer altogether.

Coker said brokers within her office are sharing information more with each other than in the past, helping clients find the right property rather than losing them to a competitor.

?You have to constantly be in front of people and tell them what has been leased ? what is the competition,? said Coker, who has been in the business for seven years. ?It’s a completely different mentality. We’re working just as hard, but closing fewer deals. That’s just the market we’re in.?

Although Coker and Keys have seen the market fluctuate during good times and bad, Adam Ranes is only beginning to see what a down economy can do to the commercial real estate industry. Six months into his job as Coker’s assistant, he learned how to be aggressive from day one.

?In this market, brokers have to be immediately responsive to following up (on client’s calls),? Ranes said. ?If we get a phone call, we have to stop what we are doing (or) they will go elsewhere. We’ve lost that potential deal.?

Working in the commercial real estate world is an everyday learning experience for Ranes, who added that his first three months in the business were difficult. ?It’s hard jumping into a game where you don’t know the rules,? said Ranes, fresh out of the University of Colorado with a degree in finance and entrepreneurial studies. ?Sleep is optional.?

And deals are fewer and far between these days. A broker used to seal a deal in about two to three months, Coker said. Today, it takes nearly twice as long. To compensate for fewer transactions, brokers are receiving higher commissions, depending on the landlord’s motivation to lease and a broker’s desire to close an offer.

In early 2001, clients had to track down a broker and pay the asking price. Today, brokers must approach potential renters immediately and offer an affordable leasing price.

?Tenants have so much choice right now,? Keys said, adding that every deal has to be ?custom tailored.?

Keys doesn’t think the overall number of brokers in the industry will change dramatically despite a recent increase in the number of brokers due to area company layoffs. Coker has seen individual brokers ?drop off like one-man shows,? but believes the core group of brokers probably will survive.

From increased networking to massive e-mailing to cold calling to attendance at monthly Realtor’s meetings, all agree that marketing is the key to success. Keys utilizes the technology of Web-based virtual tours to help promote available space. More than anything, he emphasizes a quick response time to client’s telephone calls.

?You need to go back to the fundamentals if you want to survive,? Keys said.

And that philosophy probably will have to carry over into the next year. Rates probably will stabilize, Keys said, but not until at least the middle of the year.

The local economy might see some recovery the following year, but it will take between three to seven years to absorb available existing space, Coker said.

?Until we absorb sublease (space), I don’t see prices changing,? she said.Contact Cara Newman at (303) 440-4950 or e-mail at cnewman@bcbr.com.

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