Competition in Commercial Real Estate Heats Up

Parrish and Front Street challenge Bosshardt for leadership

For the past decade or so, Mike Ryals of Bosshardt Realty Services has been Gainesville’s undisputed leader in commercial real estate.

Competitors want to change that, broadening the area’s commercial real estate business. “Mike’s been the ‘go-to’ guy, and the rest of us have been living in his shadow,” says J. Parrish, president of M.M. Parrish Realtors. “We want to offer more than anyone else does and have the most qualified team.”

Parrish Realtors recently moved toward that goal by forming a partnership with Beau Beery and Todd Rainsberger. Beery was the vice president of commercial real estate for developer AMJ Inc. for the past nine years, and Rainsberger has been a Parrish agent.

Through the merger, Beery and Rainsberger have become owners of the Parrish company, including both its commercial and residential divisions.

“There isn’t an investor-owner in town who doesn’t have Beau on speed-dial,” Parrish says. “Nobody works harder.”

AMJ President Mike Warren agrees and says that’s why he agreed to have Beery continue to handle his commercial listings. “Rather than have someone else represent us, I decided to have Beau continue to represent us,” Warren says.

Meanwhile, Front Street Commercial Real Estate Group is distinguishing itself as the only local brokerage totally devoted to commercial real estate.

More is at stake in this competition than bragging rights for who has the most listing signs along the street.

For one thing, commissions are high. The total commissions on a $1 million commercial deal can be as high as $70,000, and on a $10 million deal, they can be $700,000.

What’s more, the impact on the community is enormous. Commercial real estate agents are at the center of finding property for new shopping centers, subdivisions, office space, medical facilities, government buildings, factories and apartment complexes.

The biggest opportunity today is in retail space, including more “big box” stores, Rainsberger says. “Gainesville has always had less retail than you would expect for its population,” he says. “People are gearing up to meet the backlog of demand.”

Many other opportunities exist because developers from all over the country are eyeing Gainesville as a place to be—with its innovation economy, growing health-care industry and quality of life, says Nick Banks, Front Street’s managing director.

Each real estate firm claims to be well-positioned for growth.

Banks touts his broad base of connections outside Gainesville, especially those he developed while working with a large development company and as a commercial lender with GE Capital Real Estate in South Florida.

“A commercial broker sometimes plays many of the roles of a developer, especially in working with out-of-town companies,” he says. “You deal with a lot of complexity.”

He uses as an example a deal that he negotiated to split a property on Southwest 34th Street, with a portion going to a Dollar General store, and the rest remaining undeveloped. Banks helped negotiate easements that allowed both properties to share driveways and a storm water retention basin.

Parrish touts two distinguishing characteristics—the breadth of its team’s expertise and its affiliation with the national real estate firm Coldwell Banker.

Ryals takes the competition in stride, noting that he and the other members of the Bosshardt commercial group have good working relationships with the M.M. Parrish and Front Street teams. “We call each other for advice and ask, ‘What would you do?’ when we encounter something we’re not sure how to handle,” he says. “We’re friendly competitors.”

Ryals counters the claims that the other groups have strong ties outside the area. “With the Internet, everyone’s connected,” he says.

Besides, national brokers often partner with Ryals on local deals, he says. For example, he recently co-listed the Courtyards apartments with Marcus & Millchap, a leading national firm.

“They came to me to get a local point of contact,” Ryals says. Ryals ended up finding the buyer, a former client from Destin, which paid about $16 million for the 390-unit complex across from Tigert Hall, the UF administration building.

Ryals also touts his relationship with Colliers International Northeast Florida, where his son, Jason, is a principal.

Ryals notes that although he is well-known, the entire 10-member Bosshardt commercial group works as a team.

Commercial deals generally take a long time to bear fruit, Ryals notes. That was the case when Carrabba’s Italian Grill wanted to come to town in the late 1990s. “We spent two years looking for a location on Archer Road, which is hard to come by,” he says.

Ryals finally recommended the site 500 feet off Archer Road that the company ended up selecting.

Gainesville is known to be a tough place to locate, both because of its regulatory environment and because of a limited availability of property, Ryals notes. “Businesses  that work their way through these issues generally do very well because competition is reduced by those who don’t,” Ryals says.

Ryals started his career in residential real estate, gradually picking up more and more commercial business. “In the early 1980s, only a handful of people were doing commercial real estate,” he says. “I saw commercial as an opportunity, and I decided to specialize in that niche.”

The teaming of Beery and Rainsberger, who is Beery’s father-in-law, strengthens the Parrish company, Ryals says. “Beau and Todd have wanted to work together for a long time,” he says. “Beau is going to be a great addition to the team.”

Ryals acknowledges that his competitors are challenging his dominant position. “Nothing lasts forever,” he says. “Someone young, aggressive and smart is always coming along and trying to take the lead.”

Does he want to give up his position today? “Not yet,” he says. “Despite what you hear about the economy, our team and I are busy.”

 

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