Justin interviewed Mark Duclos, President of SIOR. They spoke about the latest market trends.
Listen to the full episode below and subscribe to the podcast on Apple.
Highlights
- Moving on – 1:16
- Wanting to keep consistency – 3:30
- The pandemic has been a challenge – 5:45
- His initial reaction to COVID – 7:48
- Excitement for growth – 12:34
Episode Resources
- Connect with Mark Duclos
- https://www.sior.com/viewprofile?PersonID=28337
- Connect with Justin Smith
- https://smithcre.com/
- https://www.lee-associates.com/
- jbsmith@leeirvine.com
- https://www.linkedin.com/in/justinbsmith
Justin Smith
Hey Mark, how’s it going?
Mark Duclos
Hey, how are you?
Justin Smith
I’m doing all right.
Mark Duclos
So of all the industrial food group, as I say, is the one that made out the best, right. So the way that if you had to be in a food group for the real estate, that’s the one you kind of wanted to be in.
Justin Smith
It was like our best kept secret for a period of time and now the cats out of the bag.
Mark Duclos
Yeah, totally.
Justin Smith
For you, you’ve got a lot of things going on.
Mark Duclos
Oh, my goodness. Yes, we get a lot of things moving. Obviously, as the President of SIOR global, that keeps me busy. Just got back from Asheville, North Carolina, last Wednesday through Friday for the Carolinas chapters. SIOR was trying to get back out on the road a little bit. So starting to get on the road myself and back then headed to Dallas like a couple days from now. Then we got starting to fill up a schedule again, so people will get in face to face.
Justin Smith
Now’s the time to make the plans and get things on the calendar.
Mark Duclos
It’s amazing what’s happening. I mean, to see everything that’s starting to fill up calendars, hotel room, planes, the works. It’s really incredible to see how quickly that has turned. All four flights and a connector flight coming out of Hartford, you have the attend to have to do that. And all four flights are full.
Justin Smith
Got it. It seemed like it was coming back and then flipped the switch on it for sure.
Mark Duclos
Yes, exactly. We’re starting to see more and more people be comfortable doing that, which is great. It’s funny, it’s so refreshing of the attitude as well. So, it’s not just logistically what you’re doing. But I think people when they start moving around a little bit, they start getting energized, rather than just sitting at your home office all the time.
Justin Smith
Don’t expect like the roaring 20s?
Mark Duclos
Certainly, I think from a social and from an attitude standpoint, and of course everybody’s worried about it from the office standpoint. We’ll see. I don’t think that’s going to be roaring 20s but we’ll see. I think you can just kind of feel it just to your point. The southeast region for SIOR does a regional conference every two years and we’re essentially sold out for this event. It’s not sold out yet, but it’s pretty close. It’s amazing. When it opened, the website crashed because so many people got on to sign up. Really, really amazing stuff.
Justin Smith
Yes, that’s a sign of the time. How long have you -you’re a year and a half? How long is this stint when you’re in the hot seat?
Mark Duclos
Usually a year, but they extended it this year to an additional year because of COVID. So we wanted to keep consistency of leadership. We kept everybody that were in appointed positions to stick around another year. So we didn’t change it at the chapter level. The chapters could keep people on for another year, but certainly at the global level, should try to keep that consistency. The balance and balancing that with a growing company. We got a company that we do brokerage and property management, construction management, and we started the property management, construction management services much later than we did brokerage. We started in 91 with brokerage and we added construction management and property management over the last three or four years. So we’re growing those two groups, and those two groups are booming right now. So it’s a balancing act.
Justin Smith
What role do you play in it? When you think of like, managing it the visionary, down in the weeds, on the deals in different departments?
Mark Duclos
Yes, yes, yes, yes and yes. Listen, your work, it’s interesting you work very hard to get out of the weeds. So, I’m by nature I’m a broker. I’ve been a broker since 1986 and you get comfortable doing deals. That’s what you do, we’re growing those relationships and then you start talking about growing the company. We started the company in 91 and to get out of the brokerage side, I’m sorry not just solely brokerage side, but to grow it in the property management construction. You get to learn to get out of the weeds. When you’re getting out of the weeds, people tend to bring you right back down and sometimes you go willingly because it’s the easiest thing to do. You’re just constantly in that push and pull. So we’re kind of getting there now. I’m getting there now where we’re able to really watch the development of the construction group and in the property group. Still property brokerage group, I probably hold on too tightly to that but could give up a few more of the controls there, that’s for sure.
Justin Smith
Yes and I can only imagine trying to manage it all between the two organizations and just like keeping your brain focused or like keeping track of just like the dates and the projects and everything.
Mark Duclos
A lot of time management, that is by far the number one challenge. The logistics of the time management and from the standpoint of just having the system in place and doing that, and then trying to fit everything into one. But it’s worked, the pandemic has been a challenge from that standpoint. Obviously because everybody is virtual, but that said, I would say probably the last five or six months, there’s been a balance of in person and virtual. And that actually became even more challenging because the schedule is just packed in and you’d find out all of a sudden, oh, no, that wasn’t a virtual meeting, I have to be there.
Justin Smith
Yes, which one is it? Getting turned around a little bit that are like a shifting gear on that, without a doubt.
Mark Duclos
Exactly, but good stuff, a lot of fun and it’s all on the positive. Listen, not everybody is on the positive. We’ve been really on a positive run ourselves. I can’t imagine how challenging it is for those that aren’t on a positive run, right, going through the same challenges but on a negative side, it’s just got to be a grind.
Justin Smith
Like piling up and piling up and now you feel like at least maybe the deck is clearing off a little bit some of those obstacles or headwinds.
Mark Duclos
I hope they are. I hope they are for those people. I feel just tremendous empathy for people that are just going through the challenges that they’re going through right now. It’s not only your business challenges, it’s personal challenges and it’s the whole change of how you do your business. It’s a whole change of how you do go to school. It’s a whole change of all these things and everything’s just kind of colliding in one. We’re in the real estate world and we’re lucky because again, it’s been generally on the positive side. Certainly hospitality is not saying that and retail is not saying that. Generally, the real estate sides has been on the positive side. I just can’t imagine being hospitality. That grind has got to be just incredible.
Justin Smith
Yes. Just the chaotic nature of what you thought you knew about your surroundings and your day to day being all up in the air for a long period of time and still evolving and knowing what’s changing today.
Mark Duclos
Yes, I don’t know. What were you thinking on March 15th, when this came out? What was your initial reaction to COVID?
Justin Smith
I just felt like when it came to schools is when it became real to me because I have a kindergartener, and who was in preschool at that time and a second grader. It was like the schools closing down. I had one week prior gone on the last flight and it had been a long time where I had that uneasy feeling where you’re reading about things but you’re not sure. Then when it was like come pick up your kid from school and they’re not going back. I feel like for me, that was really like, wait, how bad is this? What is going on? I had been paying attention and cognizant but that’s when for me, it was like that moment where like, is very memorable. Where I was, what I was thinking, when it was like, we’re going to stop what you’re doing and you’re going to school.
Mark Duclos
Totally and that became the elephant in the room as they say, right. Everything started evolving around that. My wife is a school nurse, same thing, right. So same thing, what does that school look like? Fortunately our kids are grown, but from me from a business standpoint, a pandemic. You start saying, well, I’ve never been through a pandemic. It’s like, okay, what does that look like? What do you do? Well, the first thing I said was we’re not going to make another dime this year. We did assumptions we’re not going to make another dime, we’re probably our accounts receivable are all bad.
Justin Smith
Yes.
Mark Duclos
Then you start treating yourself -you’ve been around since 1991 as a company but you start treating yourself like you’re a startup company. What’s your burn rate? I started looking at what’s my burn rate?
Justin Smith
How long can you last?
Mark Duclos
Exactly. Thank God, all the assumptions I made were totally wrong. But I think there’s others that their assumptions were totally right.
Justin Smith
Then what do you assume now? If I today is the reverse of that?
Mark Duclos
That we’re opening up?
Justin Smith
Yes. Domestically, it’s not a globally opening up. But if you thought it domestically if it were, what would you assume? How would you behave? What projections and assumptions would you make? And what initiatives would you put into action that you had been waiting on or game planning for? How to get a jump on those?
Mark Duclos
Great question. So, I just heard UK is opening up, which is really good news. Part of the thing that exacerbated our stress levels last year was that we’ve been very tech savvy as a company. We started in 1991. The rule of thumb in 1991, when we started the company was anything you could do in the office, you had to be able to do outside the office. So, we had all the tech systems, we’ve been doing hybrid since 1991. But we still had a long way to go with the technology, all the advancements. And so anything we did last year, just accelerated the stress because we accelerated all the initiatives over the last 14 to 16 months. So really coming out of this, I mean that balls keeps moving so, you’re constantly chasing the ball. I was in front of the group last week saying listen, I can’t foresee will ever be in front of the ball because that’s kind of the Road Runner and I don’t know if we’re ever going to catch the Road Runner, but we’re certainly going to chase it. But we’re able to exhale just a little bit, because we got an awful lot that’s been put in place. So as far as new initiatives coming up this year, I don’t see any. I do see the markets getting more stable. I don’t know if that means busier or better, but I do see him stabilizing. I’m not as hell bent on the industrial market staying at meteoric rise. I don’t see it going down, but I do see it’s kind of starting to get a little bit more of a stability to it a little bit more of a predictability to it.
Mark Duclos
I’m done predicting office, I have no idea what that’s going to look like. If I had to make a prediction, the general feeling seems to be a reduction to 20 to 25% on space. But who knows, we’re sitting in double the amount of space that we leased across the street just nine months ago because we’re able to spread out and we’re using the space differently.
Justin Smith
It is interesting when you see what decisions people are making there. There’s no way to predict that.
Mark Duclos
Exactly. There are people that swore- CEOs that swore they wouldn’t be coming back that are coming back. And there’s some I’m sure that swore they would be coming back that might have delayed it to Labor Day.
Justin Smith
Yes. I am starting to hear a few more of the doomsday people where I feel like it was much more of like the optimistic, enthusiasm and the excitement for the growth and the job growth. Just general economic certainty in the train, getting momentum and chugging, but I’m just starting to hear some more of like the people thinking and I don’t know if it’s purely like seeing industrial and this meteoric rise that like, makes you think it’s too frothy or if it’s legislation and taxes that’s causing people to be wary. But I feel like the sides are both getting more like, not extreme, but just more like sure of themselves. It’s kind of been interesting to hear and I’m also not an economist.
Mark Duclos
Yeah. It’s interesting to listen to the economists, we listened to one where we’re down in North Carolina. Jim Smith, his comments were that we are going to be hot and heavy for the next couple of years. So he’s on that now things looking really good, but you got to be concerned at some level with the inflation and with the lack of being able to get labor for your companies. I think that’s a major issue right now. eople that want to grow, and oh, by the way, we can’t because we can’t get in the body. So you’re right. It is interesting. I’m not an economist either but you start looking at the inflation and all that stuff. It is amazing, the confluence of issues and challenges that we’ve had in these last 14 months. I think those parts of it that you start talking about the economy just continues goes without saying I should say.
Justin Smith
Yes, with new challenges, we get new problems. That’s how I generally think of it.
Mark Duclos
Absolutely. I think it’s tough to not have some general optimism right for the at least in the short run. How can you not? I mean, we got people finally filling the streets of Hartford. Where you didn’t need a parking garage pass, because you could just park anywhere on the street, literally anywhere on the street. Not the case anymore.
Justin Smith
It’s got to be optimism first for a long period of time after that.
Mark Duclos
Agree. And like you said, the roaring 20s kind of get that sense of just let me out, please. Can I please just go? We had an in-person event for the first time locally, beginning of last week and I was worried was it going to be a half a dozen people showing up or it was going to be 50 people showing up or 100 people showing up. The largest crowd I’ve ever seen at that event ever. It was packed. People are dying to get out.
Justin Smith
They are. Well, cool Mark. I feel like we could jam for a while. You’re the man. Thank you, Mark.
Mark Duclos
Hey, great seeing you. Great meeting you
