June 04, 2009 12:31PM By Jennifer LeClaire
Even as South Florida's commercial real estate market faltered, Tere Blanca was readying a big move last autumn, from being senior managing director and branch manager of Cushman & Wakefield of Florida to heading her own firm. Blanca Commercial Real Estate has only formally existed since April, but its founder's successes already include recruiting leasing and marketing expert Danet Linares from the Foram Group and the high-profile agreement to manage 1450 Brickell, a luxury office building set to come online early next year.
Blanca calls her new venture a return to her roots. The 20-year commercial real estate industry veteran is getting back into making deals in a market she sees as ripe for growth as it reaches for recovery.
The Real Deal sat down with Blanca to discuss flying solo in a turbulent market, winning clients in a recession, and her views on the Miami Central Business District's (CBD) office market.
You are off on your own and running. What were the first few months like? How does reality compare to your expectations?
I'm working just as hard as I've been working, but I'm working on transactions and with owners as opposed to strictly management. At C&W, I spent a lot of time with clients on behalf of the firm and the brokerage team. I spent a lot of time on strategy and recruiting. That was terrific and exciting work. But I'm happy to be back in the trenches on the deal-making side.
What do you like so much about the deal-making side? Is it just the thrill of the chase?
Every transaction has its own nuances. Intellectually, I enjoy the challenge of making a deal happen and bringing the parties together so that everyone is happy at the end of the day. When the transaction is closed, it's one of the most exciting parts of our business. And creating value for our clients is something I've always enjoyed.
How did you land the 1450 Brickell management contract?
The client pursued me -- and that is a result of a very long-term relationship that I've had with clients. This is an environment where clients are looking for experienced relationships based on trust. At the end of day, trust means getting results. This group has had experience with me in the past and wanted to work with me again.
It's great when they come knocking at your door, isn't it?
I must tell you that's been the case since we opened the doors six weeks ago. I have not gone out to canvas.
You've said the key factors driving lease deals in today's volatile office market are tenant and landlord stability. Tell me about that.
There have been a lot of articles, particularly in the last couple of months, quoting tenant representation brokers talking about how concerned they are -- and how tenants should be very concerned -- about the viability of landlords or their lenders. They warn against establishing a long-term relationship in an asset with an owner or lender that may be in a distressed situation.
The Miami CBD market, in particular, has very strong owners. But certainly, anything can happen. Certainly, they can be driven to a sale for reasons that go beyond a distressed asset situation. That could certainly occur in the next 24 months as new buildings are delivered.
But I see the market as a strong owner's market. It is not just tenants who ought to be concerned with the stability of owners. Owners have to be concerned with the viability and credit of tenants when they enter into a long-term relationship. There are recent examples of tenants that have declared bankruptcy or have had to contract significantly.
Quality of ownership is important, but quality of tenants is also important. To secure leases, there is an outlay of capital costs from the owner's perspective. Tenants will have to, in some ways, provide the comfort that owners are looking for to shore up the capital outlays that may be required in particular situations.
What's the biggest challenge for landlord reps in this market?
It's no secret that the supply of office products in CBD is significant. The CBD has 1.8 million square feet that is coming online early next year, but I like to remind people that this is a market of 47 million square feet. If you look at other parts of the county, there is very little office supply coming online, and very little will start in the next 36 months. Inasmuch as we have to lease up the three buildings coming online next year, there are strong barriers to entry in the office market in Miami-Dade County. I am not as fatalistic or pessimistic as others are in terms of the absorption of the CBD space.