Outer Banks Commercial Real Estate Newsletter: February 2021

by Larry Lombardi, on Feb 21, 2021 11:54:32 PM

OBX CRE Spotlight

Geoff Poston

Vice President, CCIM, SIOR, Hampton Roads Industrial lead for Cushman & Wakefield | Thalhimer

  • My family and I reside in the Lafayette-Winona neighborhood of Norfolk. We love it here for its character and"Mayberry-esque" community. On a good morning, you can hear the lions roaring at the Virginia Zoo across the Lafayette River.
  • My wife, Kathy, spent her career in commercial real estate as well, working on the institutional landlord side for Liberty Property Trust, and later Commonwealth Commercial.
  • We have a 3.5 year old son, Brooks, who is an expert in monster trucks and construction equipment and can't wait for spring so we can go crabbing.
  • When I'm not working, you can find me on the water trying to catch a fish or two, hunting with friends, or hanging outside with the family.
  • I grew up in Hillsborough, NC, just west of Raleigh-Durham, and moved to Suffolk in High School.
  • I graduated from Old Dominion University in 2011 with a BA in History, which has proven EXTREMELY handy when working on old, dilapidated warehouse buildings.

How long have you been working in commercial real estate?

10 years. I started in 2011 when things were slow and people were still recovering from the Great Financial Crisis. Today, the industrial real estate market is on the complete opposite end of the spectrum. It's been fascinating to see how the market has transformed over that period.

How did you first get into real estate?

Growing up I had an interest in commercial real estate as my dad owned warehouse buildings for his special events rental business.

In college, I was able to get a meeting with Bill Throne shortly after he moved to Thalhimer. He had just represented my dad on an industrial lease in Suffolk and convinced Ed Kimple to bring me on as an intern. In the Summer of 2010, between Junior and Senior year, I was fortunate enough to be a part of the HRACRE Summer Intern Program. This was an incredible introduction to the business and cemented my interest in commercial real estate as a career. I came back the next summer and the rest is history.

I owe a lot to Bill Throne. And what did he get in return? I stole his client (my dad)!

What was your first CRE transaction?

Bill Throne brought me in on my first listing, which happened to be a referral from Ed Kimple, for a 10,000 SF office warehouse building on 46th Street in Norfolk near ODU. Frank Thomas of Sam Segar and Associates brought Happy Tails as a tenant. We were able to get the lease completed working together to meet both the landlord's and tenant's objectives.
To celebrate my first transaction, Frank bought me a BBQ sandwich at Doumar's for lunch later that week!
In my mind, this story typifies the Hampton Roads industrial real estate brokerage community. I don't just have colleagues in the industry, I have friends at Thalhimer and at other firms. The camaraderie and collaboration among competing industrial brokers is rare. People won't hesitate to share insight, advice, encouragement, or war stories. That sort of community mentorship as you are coming in to the business is invaluable.
What was your most memorable CRE transaction?
It seems like every year there are one or two standout deals. The unique challenges each deal presents is one of the really enjoyable aspects of commercial real estate.
Probably because it happened recently, a simultaneous sale and lease in December 2019 sticks out. A property in Norfolk Industrial Park came on the market in the summer of 2019 through an out of court bankruptcy. The building had some serious deferred maintenance. But even more challenging was the receiver's requirement for a very short contract period and conveyance by quitclaim deed - a high risk deed type that is almost always a non-starter for most buyers.
The property was very interesting primarily because of excess laydown yard area, as well as above average clear height and dock and grade loading capabilities. For all intents and purposes, Norfolk is fully developed with industrial buildings generally showcasing high Floor Area Ratios (FAR), meaning a lot of building on tight parcels. Meaningful laydown yard area is a very rare and highly sought after property feature.
An investor client with a high risk threshold, extensive knowledge of Norfolk Industrial Park, and appreciation for the property's excess yard, put the property under contract at a favorable purchase price because of his acceptance of a quick close and quitclaim deed. In very short order and while still under contract, we had three competing offers to lease from three strong entities. We were able to secure the best terms for the investor, who cleaned up the building and now has a highly desirable property and an exceptional return on his investment.
It's very rewarding to see the pieces come together for a successful transaction.
What's your favorite part of working in CRE?
The flexibility and the variety that comes with the job. Being able to adjust my schedule day-to-day so that I can prioritize family, work, or hobbies is an incredible perk. The trade-off is an income based on 100% commission. But this happens to be the best structure for me and keeps me highly motivated.
CRE offers a great deal of variety. It was only after the HRACRE Summer Internship Program that I realized how many different disciplines come together to make deals happen.
As brokers, we get to work with civil engineers, economic development officials, city planners, attorneys, lenders, general contractors, and so many other highly trained professionals. We also experience a wide range of client industries and real estate requirements. This keeps each week fresh and exciting.
What’s the biggest misconception about CRE?
That you can come into the industry and make big money in short order, or that a broker makes "easy money."
The best brokers in our market combine the highest levels of expertise, creativity, perseverance, and client value that is honed after many years of effort. A broker doesn't get into selling multi-million dollar properties overnight. Instead, they consistently face rejection and failed deals; far more than successfully closed transactions.
How would you describe the commercial real estate market in northeastern NC and the Outer Banks?

An incredible opportunity!

Various bodies of water, the Great Dismal Swamp, and challenging soil conditions contribute to our land constraint issues. As a result, there's only a handful of areas within the region in which new development can occur. Northeast North Carolina is one of those areas. We've already seen a housing market boom in Moyock and surrounding communities. I expect this trend to continue.

Can you share one great piece of advice for someone looking to buy/lease commercial property or land?

Fully understand market value and plan for the worst case scenario.
If you're buying a leased investment, think about what happens if that tenant relocates or goes out of business. Is the property well-positioned in the market to compete with other availabilities tenants may consider? The same goes for owner-occupant buyers. Give yourself a good exit strategy that offers flexibility.
If you overpay today or purchase a building with functional obsolescence, you may seriously hinder your options when you need to sell during a less favorable market.
mama kwans
What is your favorite thing about the Outer Banks?
Blackened Mahi Mahi fish tacos from Mama Kwans. The first, and still the best, fish tacos I've ever had. A close second is boiled peanuts from Powell's Roadside Market on the way down...I know I'm on vacation once I have those in hand. And I guess the beach is pretty cool, too.
What's your favorite way to spend your free time?
Doing pretty much anything outside. I get restless real easy. Not a big fan of winter, so I'm counting down the days!


(757) 213-4161

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Topics:Commercial Real EstateEconomic DevelopmentCurrituck CountyOuter Banks