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Market Leader Profile

Virginia Business
March 2004

What attracted you to commercial real estate?
I was working my way through college at an insurance agency and wanted to explore a sales position within the company; they turned me down. So, I started looking around for another job and in my conversations with the president of Goodman Segar Hogan, was promised a position in sales when I finished my degree at Old Dominion.
My mother was an Avon lady for 21 years, so I had good early childhood training and felt I could be good in a sales job.

You manage offices in Richmond, Newport News and Norfolk. What trends are you seeing in these markets?
These markets go in cycles and they are inherently different. For example, the Richmond retail market is very hot, with two new malls opening up. The vacancy rate for the overall market is under 10 percent, and the vacancy in the new malls is only 3.2 percent. On the other hand, the commercial office space market has been flat, with vacancy rates hovering around 15 percent. In Hampton Roads the industrial market is very tight. Vacancy is approximately 5 percent versus 14 percent in Richmond. Office vacancy in Hampton Roads is around 13 percent, and the retail market is similar to Richmond with vacancy around 10 percent. Defense spending is a major accelerator in Hampton Roads, and the corporate relocations of Philip Morris USA and Wachovia Securities will boost Richmond in 2004.

What market forces are changing the commercial office market?
There are fundamental changes in the market that are affecting our business. Many administrative jobs are disappearing (due to the advent of computers and other technology), and there is an overall downsizing that has gone on over the past several years. The increases in productivity are the result of less people doing more work. This has a direct effect on the office market, since companies don’t require the same amount of office space. And, through modular office systems, companies can literally fit more workers in less space. This has a direct impact on absorption and vacancy rates.

How has the real estate business changed since you began 28 years ago?
There is immediacy to the real estate market now that did not exist back then. Decisions are made much quicker, and operations like ours must be on top of every facet of the deal. With the Internet, faxes, overnight delivery and teleconferencing, business is conducted around the clock and around the world so our agents have to be able to respond quickly to our clients’ needs.
There is also a greater focus on real estate costs and a company’s bottom line. As companies try to improve their performance, especially in a down economy, they look for all sorts of savings. Selling real estate assets and downsizing leases can have a substantial effect on costs. Locating back office requirements in less expensive space is often attractive. The current interest in investment sales provides an outstanding opportunity for companies who are interested in a sale and leaseback transaction.

One thing that has not changed — this is still a relationship-driven business. Commercial real estate agents must be able to service their clients, providing the market intelligence necessary for good decisions and providing solid recommendations for action. But they also must be able to sell. There are a lot of people who do all the right things and then don’t ask for the order or cannot get the transaction done. It is important for agents to qualify how they spend their time, because there is still a finite number of hours in the day and time is too precious to waste.

Virginia Business - March 2004