When dealing with real estate, whether it is buying or selling your property, is it a must to get the services of a broker? What’s an ideal property manager like?

Justin welcomes Sam Chanin as they talk about the reality of being a property manager and how it is to run a third party property management company. He shares updates about his three companies: Maverick, Proptech, and IREM.

 

 

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Highlights

• What’s Maverick? – 0:51
• Roles, lessons learned, and experiences that built to where he is today. – 5:40
• The reality of being a property manager and working with a broker company. – 8:41
• Where are we at the pendulum swing right now between people who want to build and don’t want to build? 11:41
• There’s always going to be a market for third party property management. – 12:20
• What’s going on with Proptech? – 15:48
• Taking one step further: Letting AI do the budget for you. – 22:18
• How to know which one to delve into to adjust your approach? – 29:00
• What is the environment for buying buildings and other real estate properties? – 32:20
• Educating your clients: Not only after the commission, but for the investment to be successful for the clients. – 34:48
• When your niche follows out a favor, have you really done yourself a service? – 36:51
• What’s IREM? – 39:59

 

Episode Resources

Connect with Sam Chanin

• https://www.linkedin.com/in/sam-chanin-cpm-14b24230
• https://www.maverickrealtyadvisors.com/leadership/
• https://www.irem.org/

Connect with Justin Smith

• https://smithcre.com/ 
• https://www.lee-associates.com/ 
• jbsmith@leeirvine.com 
• https://www.linkedin.com/in/justinbsmith  

 

Justin Smith 

Hey, there he is.

 

Sam Chanin 

Hey Justin, how are you?

 

Justin Smith 

I’m good.

 

Sam Chanin 

Thanks for having me.

 

Justin Smith 

Well, it’s good to connect. I was like, you know what, that’s a great opportunity like to find a reason to reach out to you. I thought that would be fun.

 

Sam Chanin 

It’s great to be talking to you again. It feels like only yesterday, we were running around in the South Bay as young brokers trying to make it work.

 

Justin Smith 

Yeah, seriously. It’s a funny one, nothing’s changed. Like experience changed.

 

Sam Chanin 

That’s right but that’s also a good thing.  We’re still doing our jobs. We’re still working hard in this market. Real estate is a successful career. There’s a lot going on. We have a lot to talk about.

 

Justin Smith 

Yeah, so tell me about Maverick. Let’s start there. So, Mavericks a new firm.

 

Sam Chanin 

Sure, sure. Actually, October 15. will be an anniversary, it will be the first year of Mavericks. So that’s pretty cool. Maverick is really a natural progression of my career. Starting off as a broker in the in the early 2000s transitioning into landlord work at Reef and then following through with Transwestern third party property management. I really had acquired a full skill set of the entire real estate cycle and the full real estate process and working with tenants and landlords that have been doing on the landlord side, I started to realize that as brokers increase their specialty in one of the food groups, industrial office multifamily or tenant rap versus landlord rap. There was a lot to be desired for certain tenants who just needed a little bit more hand holding or needed that less transactional approach and more of a comprehensive approach to what they’re doing with their business and how it dovetails into real estate. And I saw a niche that was something that I could give to the real estate community. And on top of that we were dealing with a lot of fee compression, a lot of the big shops, Jones Lang, CBRE. Cushman, they are offering brokerage, as well as property management. And working in third party property management, it’s very hard to compete because we needed a certain fee structure in order to make our business viable. So, the mentality was if you can’t beat them, join them. So, I started dabbling in real estate and then I started getting back into brokerage. I started talking to my institutional clients about leasing their space rather than hiring a broker. Or I’d have a tenant who just had a lot of distress for the broker profession and wanted to work with me who may had known for 10-15 years. And I started finding, especially during COVID, you helped me to understand, my level in property management. My job was less about managing properties and more about creating culture, growing people, and business development. So, here we are in the middle of COVID and I’m stuck at home. I can’t go to work. I can’t build culture. I can’t cultivate talents. While it can go through zoom and it was just super inefficient, it really wasn’t clicking for me. And I found myself doing an inordinate amount of brokerage activity. A couple people just said Sam, you should stay in your lane. There were a couple other people that said, hey Sam, you should maybe consider just doing this full time. And again, the psychology of COVID, I’m sitting at home, I’m losing my mind walking around in circles in my home office and I decided that the time was now. That was a year ago to branch out on my own and offer that comprehensive real estate approach rather than a specific transactional. And it’s been working really well. I mean, of course people thought I was crazy, starting a new business in the middle of COVID but for me, it was crazy smart like a fox. I spent a lot of downtime, creating my brand, learning, the back end of running a business. I had to transition from the corporate world to the entrepreneurial world, which has been an incredible journey. I’m my own accountant, I’m my own marketing person, I’m my own business developer and sometimes I can find myself bogged down with a lot of work that doesn’t actually make me money, but it’s a necessary step to getting there. So here we are a year later, full service real estate company. I take a little bit more of a hand holding approach to my clients don’t work with the big institutional clients as much anymore because they just don’t need somebody like me. But here in Orange County, and in the surrounding counties in Southern California, there’s a huge demand for my type of service that I offer. And it’s been an exciting journey. And I’m looking forward to the next the next chapter

 

Justin Smith 

It’s one of the biggest markets in the world for commercial space. It’s absolutely incredible.

 

Sam Chanin 

Absolutely, yeah. It’s so unique with the ports that we have with the freeways and the rail that we have that service the entire country and it all being in such close proximity. It’s just an incredible market. And with what’s going on with industrial right now and logistics and the warehouse phenomenon. It’s been quite an incredible time.

 

Justin Smith 

Yeah, maybe for people who have not worked with you as much learning a little bit more of your experience with the RREEF and Transwestern that’d be helpful in some of the roles and lessons learned or experienced that’s helped to build where you are today and like the way that you help people today. I think that would be helpful.

 

Sam Chanin

You know, again, I picked up the full skill set working on the different sides of the table. And working as a landlord, I got to understand how we budget, how we evaluate deals, how we reposition buildings, and that was a has been an incredible skill set to acquire. At Transwestern, it was all about being profitable, making money as a third-party property manager, getting into the nitty gritty with the lease stock and with tenants and with conflict management and resolution. Then of course with the changing times in third party property management as portfolios are acquired and dispose, we have to react with our human capital, and the way that we organize our troops to manage those assignments. So, bringing that all home to the table, it’s been an incredible experience for me, and then also for the clients that I work with. So, for example, one client may say, well Sam, I can hire a broker to buy a building, that’s great. But I need more, I need someone to help me understand the real estate market. I need someone to help me understand how we underwrite deals. I need somebody that can help me understand the legal aspects, and the legal ease of leases and contracts. Also, because of my experience in the business, I have a huge Rolodex, there’s no vendor that I don’t know that can service a property and that can take care of an issue. So, a lot of these high-net-worth investors or entrepreneurs, they don’t have that exposure. They don’t have those connections. And that’s again, where I come in pretty handy. And then that’s just how we get to the starting point, but then there’s managing the real estate, leasing up the spaces, dealing with the issues that arise with tenants, and with the buildings themselves. All of these phenomenon that come into play of being a landlord or being an owner or being an owner user. Sometimes a broker is not the right tool to execute. And again, that’s where the broker consultant that I’ve created has really come to bear fruit for my clients.

 

Justin Smith 

I just worked on an assignment where we picked up the property manager that had some institutional background, and then we all work together on a disposition. And so that was interesting to have the property manager, join the team and then to see all of the experience of all of the capex that was spent on the project and who would who and how the work was done. And then the tenant relations and knowing all the history and like that was paramount, it was super helpful. And it was added insight that we never would have had or been able to articulate in a way that was really meaningful. So that was a great recent experience where like a with those two skill sets combined is more powerful than on their own.

 

Sam Chanin 

That’s the nail on the head, Justin. I mean, the reality is that sometimes we lean on our brokers for the renewal transactions or plugging in the underwriting. But the property manager is the key there. They know where every leaky pipe is, when every repair was done, when it starts to rain. You know, they’ve done the capex of taking pictures of what’s in the ground, when the holes dug up what it looks like, they know where all the skeletons are literally and figuratively. And then as it relates to the tenant relationship, there’s something to be said for a manager and a tenant who have worked together for a decade. When the tenant has had downtimes and scary moments, that the manager has been there to assist them to help them to relieve some of those issues. That level of trust is ironclad and to have that asset on your team with your brokerage expertise and technical execution. It’s a very much a winning combination.

 

Justin Smith 

It was funny, I had lunch with Joe Milo recently. He’s a legend been in the business for so long. He’s so great. And one of his pieces of advice was leaning more into the property management, thinking how helpful that is from a brokerage perspective. So it’s funny, meeting in the middle with the same general idea, right of like the power of the two combined.

 

Sam Chanin 

Well, that’s right. And you’re also in a position where your platform can have that happen or occur within your team. For me, working at Transwestern was a great company and it was an awesome experience. But they are so focused on third party property management, it would be very difficult for me to branch out and acquire that brokerage expertise and create that full circle. So, I had to go do it myself. And I’m glad that I did because I definitely see the need in the marketplace, especially now. I mean, things as you know, are moving so fast. You know, there was a time where you could turn the market for days. And now you pretty much if it’s available and you don’t snag it within hours, you’re probably going to miss the opportunity and due diligence used to take weeks it now takes days. That’s just where we’re at and you know, some people they need that extra piece of attention of information of wisdom and intrinsic advice that we may not have had the time for in the past because it wasn’t necessitated, but now it is.

 

Justin Smith 

Yeah, we met during the RREEF outsourcing property management to Transwestern like that era in that moment. You see so many portfolios being purchased and different institutional owners. And when you insource or outsource your property management, where are we at in the pendulum swinging right now between that being something people want to build or they don’t want to build?

 

Sam Chanin 

Look, I don’t know what I can and can’t say or where this is going to be transmitted. So I will just tell you, I know of large institutional owners, we’re talking hundreds of millions of square feet. Their mission right now is to bring leasing and management in house. So, I believe that we are going towards that pendulum, where does that side of the pendulum where asset managers are bringing that full service real estate approach, that economies of scale, where they can really save a bunch of dough, and then make up for these crazy per square foot prices that we’re dealing with in the marketplace right now. Having said that, there’s always going to be a market for third party property management because some institutional and non-institutional organizations, landlord entities are just not geared to handle or to go after that in house management or leasing. I’m not suggesting that we’re going completely to the other end of the pendulum, but I am starting to see a lot of those big entities considering taking their management services in house.

 

Justin Smith 

So interesting to see with brokerage firms that have property management, and then with large institutions. And once you are at scale, one would think you would tend to continue to want to leverage that and continue to want to build with it and figure out how.

 

Sam Chanin 

I mean, the truth it’s just smart business. I mean, you’ve got to make 100 grand in property management on an assignment will take you a good year. To make 100 grand in brokerage for the right deal, it’s just one deal. So, if you can have that full service real estate approach, where your fee structure is based on the entire income picture of leasing, brokerage, property management, property management, and construction management. You could really start to get competitive with your management fees and that’s where you can beat out those third-party management companies. So that’s the phenomena. I mean, I’m certainly not making this up. I’m seeing it happen. And it’s been going on for seven, eight years now. My departure from third party property management was one of those, you know, combinations, if you will, of that fee suppression, that will compression that we’re seeing in third party property management. If I hadn’t seen that fee compression, I would never have delved back into brokerage to make up for those fees, I would have never then realized that maybe this is the right move for me and then branched out. So, I think you will start to see a lot more of this phenomenon of people conglomerating in big companies that are full service real estate companies, like JLL and CBRE of the world,

 

Justin Smith 

And you’re swimming the other direction of the stream.

 

Sam Chanin 

Yeah, again there’s a lot of forces here. So that’s just a function of where I’m at in my career. Having had all the skill sets that I needed to do in order to create Maverick, it seemed like the next logical step for me. Of course, back to the COVID phenomenon, there’s a lot of people that are trying to evaluate what does my life look like, going forward? What do I want out of life? And while I was a very happy corporate person, I enjoyed my job, I enjoyed my function. For me, being an entrepreneur kind of goes against my grain. But I’m starting to see that that is my future and I’m not suggesting that this is my future indefinitely. This is my future right now. Maybe one day Maverick will, will grow to the size where I get the attention of a larger real estate firm and they want to buy me out and make me a principal. That’s fine, too. I’m not I’m not discounting anything. But for now, this feels right. This the market conditions that are here now, I can do something about it. I feel like I’m providing an important service to the marketplace and my clients really value my services and my time, and that makes me feel good, too.

 

Justin Smith 

Yeah, without a doubt. We are all in a constant reinvention game. Tell me about PropTech, what’s going on in there and where does that intersect with your world?

 

Sam Chanin

What an incredible time to be in property management or in the real estate business in general. I know we’ve seen technology take over certain industries and really transform and disrupt them. Real Estate has always been a pen and paper filing cabinet kind of industry. We’re starting to see that technological revolution here in our industry. With the advent, the term PropTech. What is PropTech? Essentially, it’s any software technology that can make us smarter, faster, more efficient, or more profitable. We started to see PropTech, kind of go after the low hanging fruit, certain processes or building systems that were kind of easy to integrate software into that were already going in that direction. But now I’m starting to see PropTech in every aspect of the real estate game, from writing leases, to prospecting, to market knowledge to even writing proposals, how the buildings operate, how the building systems work, how the tenants operate within those buildings and tenant uses within the space. Everything is starting to become automated. Data is being created, it’s being parsed, and software is getting smarter and helping us do our job. Technology has always been a passion for me, I’ve always seemed to be that early adopter, in my career and in my life, but because of Maverick, I’ve actually had, I’m still have some clients that are in prop tech. And they’ve hired me to help them understand the real estate problems that we have on a daily basis, and also the specific nuances of day to day, how do we get from A to B? What are those steps? What do you do? How do you do it? When you start breaking things down into the basic components, for software to be able to parse and understand, you really need to have somebody who’s lived the business, right. And again, what a perfect opportunity for me as a real estate generalist to provide that insight to prop tech companies, as well as to adopt some of that prop tech to help me run Maverick. Which, I have done.

 

Justin Smith 

Yeah, it’s so funny when you have a problem in search of a tool and a tool in search of a problem and figuring out which one is the right time. And I feel like that is a struggle where sometimes all appreciate one thing that has to do with site selection with a client that has a ton of locations and be like, Oh, this would be perfect for you. And then it’s like, that’s not a problem that we’re having, even though like I appreciate that you’re excited about something that’s making that easier for people like me. That is an interesting challenge to like, be aware of what’s available, be aware of what’s being built, and then thinking through when the right time is. I feel like clients have their own challenge too of knowing or being exposed to the right tools or knowing when to use them or what it’s worth, or to have someone they can rely on that can help guide them for sure.

 

Sam Chanin 

Right. And again, it’s not just PropTech, it’s just technology in general, right. For example, to do what I have done over the last year, maybe 10 years ago, would have cost me a lot more time and a lot more money. But because of online accounting software and online marketing tools, and online CRM software and programs that helped me create digital marketing, material and content. All of that in the past, I would have had to engage other companies and spend a ton of money. But I’ve been able to literally do it on my own at a fraction of the cost. I mean, even my phone systems all the high tech, voice over internet protocol and answering services, it’s $50 a month. The reality is things have just gotten a lot easier for everyone, not just brokers, not just property managers, not just tenants but professionals like ourselves. The whole package is really creating for a much more profitable and efficient world. And I for one, I’m just stoked that the real estate industry is catching up. Three years ago, I started to see all these little PropTech startups showing up and making themselves known. Here we are three, four years later, they’re already on V2 or V3 of their software, and they’re in 10, 15, 20, and 100 million square feet across the country. The software is working and it’s working hard. It’s making people money and it’s saving people money and saving people time and headaches. And, again, what I like to think of it as a technological Renaissance. Where we are right now with our understanding of AI, where we are with our computing power, and where we are with that cost barrier. Which has come way down. It’s just it’s a great time to be in business. I could see a time in the future where this will be even more seamless and even more self-working. And we as the end users will pay a subset subscription fee and have a lot of the services that take up a lot of our time be done for us. Which the truth is it opens us up to do what we do best, provide value to our clients. If I could somehow figure out, I probably just need to hire people and make some more money. But once I can get away from my desk, and not be my own account, not being my own marketing person and not be my own business developer, then I could really focus on getting the job done. And that’s what I personally I’m looking forward to.

 

Justin Smith 

Yeah, that’s the team building part and teamwork and leadership. I’m sure it’s on the horizon. And it is interesting with some of these PropTech solutions of being able to be connected with different people up and down the value chain and the visibility and getting out of email and just having everything like in your dashboards. And I could see where with AI it can help you like, did you forget to budget for this? It looks like it’s a little out of whack based on industry standards. Did you look at this and that and like? It can help with some of those and like help you be able to manage even better within it?

 

Sam Chanin 

Well, let me take it one step further, man, I mean, why couldn’t the AI just create a budget for you, you feed in the property statistics, you feed in the rent roll, you feed in a tenant base, and then it can spit out a budget in seconds. that budget can be then at least initially looked over and approved by a human. But in the future, computers will be able to underwrite properties on their own. They’ll be able to source deals on their own and they’ll be able to execute those deals on their own. And then arguably, they’ll be able to manage those properties on their own and call out vendors to come fix things. Those vendors may or may not be automated in themselves. It’s a pretty cool thing that we’re starting to see. This is our future, and we should embrace it and figure out our place within it because companies and people that don’t, this can be said for any technological advancement will be left behind. It’s adapt or die.

 

Justin Smith 

Yeah, without a doubt, that’s exciting to think of it that next level further.

 

Sam Chanin 

But before we get to there, while we’re still getting into our cars and meeting with people face to face, I saw your post regarding your tour last week that you’re out in the marketplace. I’d love to hear more about that, Justin. I tell you; I’ve been watching rental rates creep from a couple years ago at 80 cents to 90 cents to breaking $1 threshold to going to $1.20. Now we’re talking about $1.50 base and nets being in the mid-20s. We’re talking $1.75 triple net for 150 to 200,000 square feet. I mean, wow! Then you would think there would be some pushback, but it’s like if you don’t renew, there’s four proposals already in the space. And it’s six months before the expiration of your lease. What are you seeing because I’m seeing a flurry of activity and it’s very hard for tenants to control the board these days?

 

Justin Smith 

It is and you bring up a good point that you have to fight to keep your own space. Right is that’s almost the first fight of just thinking through. It was maybe 12 to 30% for the last year or two of what you’re bumping rent was going to be coming out of a five-year lease. And I’m looking at some for next year and early 2023 and realizing it can be over double. So 2x. Think through where that fits in your P&L. And some businesses have been doing very well. You’ve I feel like on the other side of the coin, I’ve also heard of people talk about their revenue that is doubled or tripled. And it’s not everywhere, but to have to figure out how did those match up and who can afford that. For some they can and it’s like grope, but it’s not like a game ender or it’s not a problem that causes them to go and make a change that’s significant. Like out of state or growing in another area or outsourcing to third party logistics instead. So, it has been interesting to see that it’s not all bad. There are a lot of tenants and a lot of users that are doing well. And this is just part of the adaptation but yeah, to go through and find a logistics company looking for space and need to look at the whole LA basin to satisfy the need. And then to see that, in most markets bigger is almost out pricing smaller. Which forever was not how it worked, and it was at parity for a while. And then the take a number in line. And so you don’t get space by taking a number you get a sorry, keep playing the game. Once you see that is the landscape, then how can you adjust your tactics and your strategy to try and find stuff earlier? Or find stuff that’s not available to the public. Or to reach into rent rolls and look for where there’s space and things that are rolling. That is value that I feel like we didn’t have to swim upstream in the search for the longest period of time, where we have had to for a while and now it’s even more amplified of like, how else can you find it and still compete if you’re not public or global with a bulletproof balance sheet. What are the rest of the group? What do they do, and that rest of the group is 80% of the market out there? So that part’s been an interesting challenge. If that’s the market and you’re touring buildings, that how does that change how you even set up a tour in the first place because you don’t want to go to five buildings where you’re number 15 in line. That’s not the best use of your time. And so that part has been another interesting part of like, you can’t offer before you tour but you want to because you don’t want to tour anything that’s not worth an offer. And so it’s been interesting to like really delve into the qualifying part. And to really be deep into making sure you that you’ve qualified so far that when you spend that client’s time, like you’ve really got it all teed up where this is worth it. Because if we go there today and it lines up at 12:15, today is your lucky day. And it’s time to shine. This is your one small moment at the front of the line, take your best shot. And that has been interesting to walk the path and that and see what that looks like. I am fortunate to have a couple clients where I do this across the country for them. And it’s been interesting to see in some markets, it’s like that. And in other markets, it’s not.  There are some markets that are secondary markets where at the end of our fifth year, we’re working a renewal and the rates basically going to just keep on going at 3%. And then you go to another market and it’s 45%. It’s been interesting to see different markets and which ones are like how do you know which one it is? And to delve into that and then start adjusting your approach based on what’s going on in that market. That’s all been pretty fascinating to hop in and then kind of figure out, how is that the same from what we know and experience here in Southern California and how it’s different? And what we can do about it?

 

Sam Chanin 

I’ll tell you for me because my focus is Southern California. It’s hard to source deals right now. I’m logging on to costar, AIR and LoopNet and by the time I print out those surveys, and then call the brokers to find out that the spaces are available, they’re all weeks. I’ve gotten to a point where I’m calling, my contacts at big box landlords and saying, what do you got coming up in the next six months? And then I hear again, I’m trying not to name names. One company tells me Sam, we are at 98% occupancy, and we have no vacancy for six months. And the only reason we even have vacancy is we’re currently turning it over for a new client. That’s really where I’m at right now and it’s become quite difficult. And I’m at a point where I’m just trying to find my own deals. In the past Tenant Rep play, would be simple. Someone would call me up that needs some space, I’d go find it in the MLS, and then we would tour, and we’d get them a building. Now I need to find an off-market opportunity, buy the building, put them in as a tenant, stabilize the property. Then either sell it or have one of my clients take that income stream and that investment strategy. So, I’m trying to create my own market by all my own deals by going off market and it’s been difficult, and I don’t have sales meetings, like you Justin. I don’t have comp databases around the country from all my colleagues. I’m trying to develop that on my own. And that’s why I talked about that big data. A lot of these companies are shying away from costar and AIR and they’re starting to create their own databases of explorations and what’s out there. And they’re cultivating their own relationship with research gurus and specific organizations. So that is how I’m pivoting as well. I’m starting to learn that I could call large landlords in Southern California and get 20% of what’s out there. Or I could play catch up with the MLS and hopefully get lucky. And that’s not a strategy for success.

 

Justin Smith 

Yeah, it turns the game upside down. I don’t know if you’re using that comp stack. I totally found that helpful when I’m out in Charlotte or I’m in Chicago. And even in a market where I have support just to have additional third-party source. I found it super helpful where the first two or three times I heard of them I was like I don’t need any of that. I appreciate that someone’s doing it for someone. Then fast forward two years later and I was like, Oh, my God thank you, you saved my bacon.

 

Sam Chanin 

Saving the day right.

 

Justin Smith 

I didn’t have what I needed at one moment in time and I was struggling with a disparate piece of information and to cobble it all together. To have that be a resource that was helpful then and continues to be helpful going forward.

 

Sam Chanin 

I’m glad to hear you using it because I am too.

 

Justin Smith 

Tell me about the environment for buying and imagine you’re trying to buy buildings these days. And underwriting even if you’re buying a 10 or a 20 or 100 or whatever.

 

Sam Chanin 

It kind of mirrors the housing market. The reality is that in markets like this you traditionally will have properties that wouldn’t ordinarily sell or capture the right dollar value in a lesser market that comes up for sale. So I think right now, due diligence is very important because you can get stuck with a bad building if you don’t do your homework. It’s very hard to make sense of pricing. Before it used to be super easy. You got a cap rate, you can back in your rents that you need to achieve. Today, I back into those rent numbers and I’m like $1.95, you don’t know how to make money from this deal. But what I’m starting to see is that there is value in just storing your money in an industrial asset. You got all this institutional money that is flowed away from Class B and Class C office and from retail and is making its way into the darling of commercial real estate industrial for the first time in my 20s. And it’s impossible to compete with this all cash and a lot of it, with extremely quick close because they can do due diligence, just like I can. So it’s been really tough to compete at my level.  I’ve been not forced, but I’m finding my niche if you will, in the two to $6 million range. That seems to be where I have been successful because I’m just out of the radar of those institutional ownerships that aren’t so interested in those smaller buildings. And then because of the clientele that I’m going after, in terms of the entrepreneurial business owner or the high-net-worth legacy wealth investor, or business owner or landlord that seems to be where they’re comfortable in terms of putting money down and buying a building and what they can qualify for. For me, I’ve got a lot of clients with a lot of money to place. I don’t have a lot of good opportunities. And then that’s compounded by the fact that even though my company name is Maverick, I am quite risk averse.  That conservative nature has been built into my education. It has been built into my philosophy and thinking from working as a landlord and in third party property management and is now translating into the advice that I give to my clients. So, for those riskier aggressive investors, they probably would be irritated working with me because I’m always kind of pumping the brakes and talking about worst case scenarios. But there’s that other side of things where clients really appreciate that I’m more focused on their well-being than I am in my commission. And I’m not just looking to transact and to get a building under my belt and to get a commission and I’m really looking at the long-term relationship. I want that investment to be successful for them because I want to be there to test their building, to manage their building, to dispose of their building, and then potentially be the first of many in that portfolio. I bring to the table that full-service approach. So, I don’t like that typical just buy a building and occupy it. I’m looking for that building that’s kind of a value add when maybe there’s some vacancy that my client can occupy but there’s some revenue income on a tenant that’s already in the building. Maybe there’s a vacancy opportunity for me to lease and to stabilize the property. Maybe there’s just a lot of value add in terms of construction, or in aesthetics, or repositioning the building for today’s needs. That’s where I’m finding a lot of success because that’s where I can differentiate myself from your typical transactional broker. It’s also getting a lot harder because brokers assigned to wise up to that fact as well and starting to shy away from that specialization of one very specific food group and way of doing business and realizing, hey, if you’re a tenant rent broker in this market there’s no buildings for you to go to. So, you better start expanding your horizons or you not going to make a lot of money for the next five years. If you’re a landlord broker it’s like if you have a vacancy that’s fantastic. You don’t have a pipeline of vacancies that you can rely on to make your year or whatever your financial benchmarks look like. So brokers really have to transition to this entrepreneurial approach of the world is my oyster and I need to go out there and do good services for good people and make money that way.

 

Justin Smith 

Yeah, when your niche falls out of favor, have you really done yourself a service? That’s funny in that smaller size range, that’s where you’re more likely to have a mismatch to have people not like a finding the diamond in the rough. And not looking because they’re not looking like a with trade money, or they’re not looking specifically with building a portfolio, they’re looking for an owner user. And if the business doesn’t match up, then they’re not interested in it. So, I feel like that’s a great place to fish. I had one institutional investor tell me they bought a 17,000-footer the other day and don’t worry I’m not going to make a habit of it but it was a good deal. It was better than no deal at that time. But it was like, oh, no, they’re going smaller and smaller. Where I feel like that used to be like 75,000 then it was 50 and then it was 40. And then you’re like, Okay, maybe it’s like 20 and it doesn’t seem to be interesting to see where there’s still a niche that’s available.

 

Sam Chanin 

You also have to understand their perspective. They have money to place and if they don’t place that money, not only do they not make their financial benchmarks and their personal goals, but you lose that money and when he goes elsewhere. So, I can also understand those pressures for asset managers to place their money in ever smaller deals to make it work. It worked for BlackRock, they bought 1000s of homes over the last 10 years and now all those homes they bought for three, four or 500 grand are a million dollars. An evaluation increase, that might be our future. We might be putting together four or 5 million square foot portfolios based on 15,000 square foot buildings. And as crazy as it may sound, that might be the only place left to make money, at least for now.

 

Justin Smith 

Back to you being a more conservative, who lives with bad deals? Property management and asset management and acquisitions buys bad deals. You have to oversee it and you’ve got to budget for it. You’ve got to work through it, whatever it is, and however it can be worked through. So, I feel like that experience can help prevent walking into a bad deal when you’re used to living with post acquisitions. How are we going to run this asset? And what’s that look like that and now have to take to the market based on what we’ve got it for.

 

Sam Chanin 

Then for me, I’ll take it one step further, I lose that client relationship. For me, that was precious. The conservatism also plays into the fact that I’m growing a small business. I wanted to scale and I need to hit the bull’s eye every time right now. There’s no room for error for Sam Chanin and Maverick at this point. This is my own money.

 

Justin Smith 

Lastly, tell me about IREM, Institute of Real Estate Management. You’ve been helping contribute there for a while. What’s that all about?

 

Sam Chanin 

So that’s my give back. I run the Institute of Real Estate Management. It’s an association that primarily focuses on property managers. There’s an education component to it. It’s almost like getting a master’s in property management. What separates or us from other associations is a very large ethics component. IREM was founded in the 40s. It was the wild west of property management, there was a lot of shenanigans going on. And a bunch of property managers got together and said, we want to be ethical, and we want to really focus on our client’s well-being and being good stewards of their money and IREM was created. IREM is an international association and has chapters in a lot of countries around the world and, of course in almost every state here in the US. I’m currently the president of Orange County chapter. I had been the president in 2014, when I was a young up and comer but because of COVID the chapter had experienced some hardship and needed a steady hand in a tough time and they asked me to come back and run IREM one more year for them, which I gladly did. I understood that when I transitioned from Transwestern to Maverick, that I would be the least busy I was ever going to be. Little did I know how quickly things would ramp up. It’s an incredible organization. One of our taglines is we grow leaders. It’s important for me to foster that leadership in Orange County to create those individuals who will one day manage and oversee and broker for our clients and ourselves. It’s a fantastic organization. If you have the time, come to our Southern California Real Estate Conference in November. We should have a lot of educational learning opportunities, market information, economic forecast, as well as just an incredible networking opportunity with asset managers, large institutional ownership and  property managers that surface the industry.

 

Justin Smith 

That’s awesome. Yeah, they’ve said, Sam, we need your help. Come on back.

 

Sam Chanin 

That’s what I do. I’ve been happy to help and have, like I said, happy to give back. It’s an important part. I think of a lot of individuals who helped me with my career. Some names that come to mind, Mike Cants, John Combs. These are individuals in our marketplace, who were a part of these associations that fostered an environment for me to learn and to grow to become the leader that I’ve become. I feel that it’s important to complete that circle and provide that to the next generation of real estate professionals.

 

Justin Smith 

We didn’t get here on our own. Well, Sam, thank you. I appreciate you making yourself available. It’s fun to catch up. I love hearing about, it’s exciting a new venture and figuring out your place and what you enjoy and then building a team of like-minded individuals. I’m sure that’s something that’s on your mind of a good fit and who do I like working with and how can we best help our people. We have a long line of alone wolves in brokerage. So some brokerage finally got into like the teaming mentality. So we’re also so thankful that you have finally got there even though maybe we were slow adopters there. I’m excited for your new venture and I appreciate you sharing it with us.

 

Sam Chanin 

I appreciate the time. Thanks for having me. And I look forward to doing it again, anytime.

 

Justin Smith 

We’ll put your website and LinkedIn on the show notes. Anyone wants to reach out to you and that’s a good place to do it.

 

Sam Chanin 

Please. Thank you.

 

Justin Smith 

Yeah. Thanks, Sam.