For this edition of our Expert Insights series, we had the pleasure of chatting with Terry Coyne, vice chairman of Newmark Knight Frank’s Cleveland-based team. Terry has served the Greater Cleveland area as a commercial real estate broker since 1995. Drawing on his experience, he shared with us how he assesses the CRE market considering the coronavirus outbreak, why reshoring is a growing trend, and more.
Q: Could you start by telling us a little bit about your background and why you chose a career in commercial real estate?
My father is in the parking lot ownership business, so real estate ran in my blood. I was in graduate school at the University of Chicago to become a political science professor, but then quickly realized my passion was not in the academic world. I then was able to secure a job at Colliers, Bennett & Kahnweiler in Chicago, which was a fantastic training ground for this business.
Q: Considering the COVID-19 outbreak, what are your thoughts on the CRE market in the US today in terms of trends and challenges?
Clearly, the move toward e-commerce and last mile was quick. What was a growing trend became the new normal almost overnight. Last mile and e-commerce will be the most active part of real estate for the foreseeable future.
Q: What differentiates the commercial real estate market in Ohio from other major markets in the United States?
Ohio is really made up of three different markets: Cleveland, Columbus, and Cincinnati. Cleveland is a regional distribution point, relying on heavy manufacturing. Columbus is more geared towards light manufacturing but is a national distribution point, and Cincinnati is a combination of the two.
Q: How have you seen the industry evolve in the past years you’ve been involved in it?
Access to information has become easier, switching the emphasis toward your ability to analyze it and make intelligent decisions. In the past, simply having information made you valuable. Now, information is ubiquitous, so being able to understand it is the true value today.
Q: Where do you see it going in the future?
I think the speed at which transactions are done will continue to accelerate. I also think the impact of robotics and technology will make for more expensive distribution centers with higher ceilings. On the office side, I think there’s a chance you will see buildings try to become coronavirus-free through UV light and higher humidity through HVAC systems. Retail will definitely be an interesting industry.
Q: Are there any lessons from the past few years that you would impart as an absolute must for those looking to get into the CRE industry?
The key is to join a great team, no matter what part of the industry you operate in. People need mentors to be successful in any business.
Q: What is your general assessment for the commercial real estate market in 2020? Have you spotted some interesting market trends, especially considering the current pandemic?
In addition to the e-commerce trend discussed earlier, reshoring is a real trend that has already begun. You will see US companies bring back mission-critical tasks to the United States. Cleveland is in the Rust Belt, the historical home of manufacturing in the United States, and I personally have already worked on three reshoring transactions. The international uncertainties over trade are causing companies to rethink their supply chain and either duplicate their abilities or bring them back completely.
Q: How has the evolution of online marketing impacted the commercial real estate industry?
Online marketing is a true force in our business. Prospects come in with much more detail about the properties for sale or lease. If your properties are not online and you don’t have detailed information available, you are doing a disservice to your clients.
Q: Any other insights that you’d like to share?
I think there is a great deal of uncertainty and need for better information. Chaos creates opportunity for the most well-informed and well-prepared.