For this installment of our expert interviews series, we sat down with Lance Shoemaker, business and real estate instructor at West Valley College, in Saratoga. Mr. Shoemaker joined WVC in 2004. His current courses cover socio-economic and legal aspects of real estate and business. His education includes the attainment of several degrees — political science at UCLA, and city planning and law at UC Berkeley — and he is a member of the Phi Beta Kappa honour society.
His professional experience is extensive, including city planning and real estate law. As an attorney, he has represented both private and public clients, with cases ranging from general transactional work to outdoor advertising, to lease negotiations, environmental contamination, and land use. Mr. Shoemaker’s real estate experience includes negotiations, documentation and due diligence, redevelopment and property management, code enforcement and much more.
Our interview below includes Mr. Shoemaker’s insights on commercial real estate in California, the short- and possible long-term impact of the COVID-19 epidemic on the industry at large, as well as the timeless importance of networking in real estate.
Q: Tell us a little bit about your background and what led you to this career
I am a real estate attorney and a faculty member at West Valley College. I am the Chair of the College’s Real Estate Program. My mother was a real estate broker while I was growing up and my brother-in-law is a commercial real estate broker in Southern California. I’ve long had an interest in real estate-related matters and, while getting my law degree, I also obtained a Master’s degree in City and Regional Planning from UC Berkeley. I graduated from both law school and planning school in 1999. I worked full-time in San Francisco for a major law firm, handling matters involving real estate and public agency law. I’ve been teaching since 2004 and have been Of Counsel with the law firm of Colantuono, Highsmith, and Whatley since 2005.
Q: Considering the COVID-19 outbreak, what are your thoughts on the CRE market in the US today in terms of trends and challenges?
It’s going to be very interesting to see how much demand there is for commercial real estate after the pandemic is over. So many companies and workers have adapted to working from home. I think there will be less demand for commercial real estate space, but it’s not clear yet how much less demand there will be. Additionally, I think the era of the open workplace will be greatly reduced due to the need for social distancing and increased hygiene practices.
Q: What do you think differentiates the commercial real estate market in California from other major markets in the United States?
The price of land in California. In the major urban centers of California — the Bay Area, Los Angeles, and San Diego — there is very little available land to develop within reasonable commute times of existing employment centres. We are seeing increasing interest in multi-story commercial developments in places that had originally been primarily suburban. For example, downtown San Jose has seen more commercial development activity in the past 5 to 10 years than it had seen since the 1960s.
Q: How have you seen the industry evolve in the past years?
Until “shelter-in-place,” the commercial real estate industry has been quite healthy, with a lot of development activity throughout the major urban centres. In terms of the profession, we have seen the CRE industry become a little bit less of an old boys’ network, with more women going into the field. Commercial real estate, however, still has a diversity problem.
Q: Where do you see it going in the future?
Given there is so much we don’t know about COVID-19, it’s hard to say what will happen with CRE. There is still quite a bit of commercial real estate being built, but I wonder about projects that have yet to be funded. I would expect developers will be a bit more hesitant to seek funding for future projects. It probably makes sense to wait and see how much demand there will be and how the pandemic will affect how future office space is set up.
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?
It takes a while to develop business in commercial real estate. Anyone who is contemplating entering the field should have some money set aside to live on while they pursue establishing themselves. Additionally, networking is extremely important in developing a book of business.
Q: What is your general assessment for the CRE market in 2020? Have you spotted some interesting market trends, especially considering the current pandemic?
I think the market is and will be extremely stagnant. I don’t see the commercial market getting back to normal until there is a vaccine.
Q: How do you think the evolution of online marketing has impacted the CRE industry?
Like in residential real estate, I think most people in commercial real estate get their business through personal connections and not through online advertising. In general, when people are looking for real estate professionals, they ask their own networks for referrals. Additionally, it’s important for people to feel like they have a personal connection to a real estate professional, and you can’t really gather that from looking at an ad. On the other hand, it is crucial for any real estate professional to have a strong online presence and familiarity with the latest in web-based technologies because your customers will expect that.
Q: Any other insights that you’d like to share?
I think the CRE market will be changed more by COVID-19 than any other phenomenon in my lifetime. The problem is, we don’t know exactly how it will be changed.