Paula Clair Smith knows if she doesn't succeed at her job, businesses could close. The broker-associate at Osprey Real Estate Services in St. Petersburg represents tenants, landlords, buyers and sellers. She works to keep businesses, from mom-and-pop shops to offices with dozens of employees, in desirable locations. In a troubled economy, small-business owners need lower overhead to survive. Sometimes that requires commercial real estate agents to negotiate new leases with landlords or find cheaper buildings for the businesses. Smith has been involved in the Tampa Bay commercial real estate market since 1998. Although she specializes in Pinellas County, she has assembled land packages for redevelopment throughout Tampa Bay. She is a director with the Florida Gulfcoast Commercial Association of Realtors and has won several of the group's top producer and industrial deal of the year awards.
How do you lower rents without knowing what nearby businesses pay?
Leases aren't recorded. There are no public records. You have to talk to other brokers. You have to network with your peers to know what the rents are without jeopardizing the confidentially of a deal. You have to know what goes on under the surface. Concessions are not hard to get. Most leases run five years. Landlords are reducing those or are offering free rent to keep the businesses.
Is it difficult to put a retail or office business into a building that housed former industrial firms?
You have to ask: Is it an office or is it retail? There is a blending that's generated by who's your customer. It's a puzzle. You have to put it together to figure out how it's going to work, zoningwise and peoplewise.
You have to know the needs of the customer. Once they voice those, it might be the space they're already in. Sometimes they need something that doesn't exist. Its kind of an evolution. If they're open to ideas, its your job to exhaust all of them. The tenant mix is important. Traffic and parking are important. A great location sometimes may not be a great deal. Location is the key.
How do you find a landlord willing to rent to a new business in this economy?
You look at their (business) history, their tax returns. You want to see if they have been successful. What is the business plan, and is it thriving in the market now? There has to be some basics in place. Does it appear to be a good concept? Determine the cash on hand. It's easy if they put skin in the deal. But landlords also have to take calculated risks. There is so much bad credit out there. The (credit scores) aren't the only factor.
How has the Great Recession impacted your job?
I am busier now. Busy can be defined as activity. People want to know a lot more things. Businesses owners are a lot more cautious now and are slower to pull the trigger on deals. You have to provide greater information because the risk is higher.
Agents have also left the field, like in the residential side. You need the resources to stick it out. Some residential agents tried doing commercial deals when the market was hot, but it was a disaster. The perception is commercial (real estate) is where the big bucks are. People were looking for the pie in the sky.
What is the biggest trend in Tampa Bay?
People are moving into the urban areas, and that actually happened before the bust. Businesses are following to main streets. The Gen Y and Millennium generations all want to be in in-fill areas to make it walkable.
What does the future hold for commercial real estate ?
Tampa Bay is recovering, but we still need jobs. Credit is still tough, which is why there is more leasing instead of selling. We're in the business of business. People are looking at their business and evaluating every aspect of it. The business has gotten so much more complex.
Mark Puente can be reached at firstname.lastname@example.org or (727) 893-8459. Follow him on Twitter at twitter.com/markapuente.