David Rosenthal for Property Line's Movers & Shakers / PL Member Spotlight:
What lured you into commercial real estate to begin with?
The realization that my past work experiences, strong analytical skills, natural creativity and passion could be linked in a unique way to address the managing and selling of commercial real estate in the new economy. From the age of nine, I worked for my father’s commercial construction company on various construction sites in Southern California. As a banker at Downey Savings, I co-managed the bank’s ongoing large scale real estate developments as well as the disposal of OREO assets.
Do you have any thoughts about the current state of the real estate marketplace or economy?
The economy will eventually improve but how we do real estate has changed forever. The internet will continue to be a game changer: Ever increasing accessibility of information and the decreasing costs of good information will continue to force more and more transparency in the marketplace and at the same time demand that we better make use / sense of the information for our clients. The ones that can best derive meaning from the information and tell a convincing story will succeed.
Don’t we already know that “the internet will continue to be a game changer.” What concerns me is that the faltering economy is partially masking the continued rise and spread of transparency. Ever increasing transparency empowers / emboldens people / communities to form coalitions and demand that their concerns be heard. And they are not afraid to seek relief through litigation and/or influencing the legislature to pass laws they deem necessary to protect the environment. In addition, our clients (buyers and sellers) have access not only to detailed property information but also direct access to thousands of buyers’ email inboxes via services like Property Line. What does all this mean? To survive, many of us will need to learn additional skills. The bottom line: the ones that can best understand the facts / nuances and rearrange them in such a way to tell a damn good story will succeed. In other words, information alone is no longer king.
What do you mean when you say—“tell a convincing story”?
Every property has a highest and best use, our job is to figure it out and expose it to the marketplace to allow potential buyers to compete and drive up the sales price.
How do you create value/a story?
We relentlessly mitigate risks and work hard to come up with a new doable vision for the property by working closely with the municipalities and understanding the community’s expectations. We recently had a bank owned asset with a tentative map for 110 townhomes. We realized after conducting a market analysis that the new highest and best use was senior graduated care. We discussed our finding with the City--the City agreed and stated that they would be open to a senior housing development on the site. A senior housing developer bought the site and paid 35% more than the next highest bidder. The City just recently approved the site for a 140 unit graduated senior housing development. Construction is set to start next fall. Everyone wins.
What was your toughest deal?
Last year we closed a very challenging 320 acre bank owned deal in San Diego County. The tentative map was fast expiring and had a massive negative land residual associated with it. Even though the bank was facing thousands of dollars in fines weekly for an expired grading permit, extensive erosion control and fire abatement violations, potential hazardous waste, three separate ongoing lawsuits, over $2,000,000 in current and future liability to the bank, we were able to remedy all the issues for less than 10% of the current / future potential liability and find a buyer that was more than happy to accept the property as is because it fondly reminded him of the farm he grew up on.
How do you view the information and services provided by companies like Property Line?
Superior Data–Buyer Contacts–Information—Market Presence were some of the ways in which large companies had the leg up compared to smaller companies. However, thanks to companies like Property Line, innovative upstarts like ours now have access to thousands of buyer’s inboxes and data for a nominal fee. As a result, small innovative companies will likely be at the forefront when it comes to forging market solutions.
About David Rosenthal
David earned his B.A. in Political Science from UCLA in 2002, summa cum laude, Phi Beta Kappa and a M.S. in Real Estate Development from Columbia University, New York, New York in 2007. David is a licensed real estate broker and general contractor. Click here to contact David Rosenthal directly via email) or follow him on Twitter (@RLADavid).
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