Phoenix Industrial Activity Triggers New CRE Company
Todd Hamilton has launched Citywide Commercial, a new boutique brokerage firm that will focus on the industrial market in metro Phoenix.
“The strong performance of the Phoenix industrial market in 2018 created a lot of success opportunities and helped me and my team develop very strong relationships with owners,” Hamilton, who will serve as managing principal at Citywide Commercial. “After evaluating the market, we decided that now was the best time to build on that foundation with our own company, which we have set up to deliver superior customer service and to take full advantage of technology. When used correctly, the advances of technology alone allow a small brokerage to do the job that it took 20 brokers to complete 10 years ago.”
While some real estate professionals are predicting the end of the cycle—a favored pastime in the industry this cycle—Phoenix has trended significantly behind other markets and likely has a long runway ahead. That has made now, as activity is just starting to pick up, a great time to launch a firm in the market. “We are seeing signs that some tier one markets like Los Angeles, New York and Chicago may be approaching a cycle shift, but we’re not seeing those indicators in Phoenix. We entered the recovery later than other cities and as a result we’re seeing Phoenix as a little behind cycle,” says Hamilton. “So unlike primary markets, where investors and tenants are having a hard time finding affordable options, Phoenix is a secondary market with affordable options and still room to run. As a result, people are flocking here.”
However, Phoenix’s growth trajectory spans longer than the current cycle. The market has experienced a dynamic shift that is expected to survive corrections. “Even when the market does change, a good broker can capitalize on the pivot. In good times, capital is abundant and confidence is strong, which often leads to buy decisions and a strong sales volume,” says Hamilton. “In a market downturn, market confidence tends to fade, which may put a buy decision on hold but will increase leasing activity. Great brokerages actually do better in cycle changes because it creates new opportunities—if you know how to capitalize on them to benefit your client.”
The activity has also created a void in the market for more tailored brokerage service. That is where Hamilton is hoping to make an impact. “We have a lot of larger firms in Phoenix that very successfully service large corporate clients and REITS, but the smaller firms are becoming bifurcated—often based on technology,” he explains. “Many of the smaller firms that aren’t embracing technology are struggling, but those who are investing in tech are finding that it levels the playing field. That is also a benefit for middle-market clients. In the past many of these investors and tenants were relegated to work with smaller and less sophisticated brokerage firms, but when they pick a boutique firm that is tech savvy, they get the same advantages that many national brokers provide.”
Adam Shteir and Chad Kirkorsky will also join the new firm as principals. “Our team performed more than 600 deals over last 12 months, and we plan on increasing that deal volume by 25% in the next year,” says Hamilton about his goals for the firm’s first year. “In terms of team size, we hope to double each year for as long as possible. In our first 30 days we have already added a new team member and we are talking with several others now, so achieving that growth goal is already in sight.”