For 36 years I have enjoyed the opportunity to work in the commercial real estate industry. It is interesting to work on all types of transactions including leases, sales, and investments. In this business, one has the opportunity to meet many people in a variety of businesses and work with other great real estate professionals. No matter how much experience one has in this industry, there is always something new to learn and ways to improve. There are also those things which are said and repeated by people which real estate professionals need to question and correct those who say it.
Now is the time to change the oldest saying. I am speaking about those words you have heard hundreds of time come out of the mouths of so many, real estate is all about “location, location, location”. Ask yourself, what does that mean? Whenever I ask someone to explain it after they utter those words, they try but most the time they fumble through it and end up repeating it, “you know, location, location, location”. Those words are old and should and must be replaced. True real estate professionals should say that real estate is all about “location, timing and demographics”. These words make sense.
All those words answer what makes real estate successful. Location is the where. Let’s face it, where the property is located is important but the importance of locations can change. What happens when they build new roads or bridges, and traffic no longer drives by a specific location? When a major company moves, new transportation such as rail is constructed, or a major retailer opens down the street, the location changes maybe for the better or possibly for the worse. The where is important but is not the answer to everything.
The word “timing” is of great importance in real estate. Timing is the when and the when is a most essential ingredient in the success of real estate. New buildings completed at the beginning of an upswing in the real estate cycle will be far more successful those developments completed when the market boom ends. Tenants leasing space can catch rental rates at the right time or the wrong time and the life of their business will be impacted. What if zoning changes or utility services are brought to properties? What about that land purchase and the price being paid, timing is everything. But the where of location and the when of timing are only two key components.
Demographics is huge. For those of who understand the importance of demographics and the impact of demographics in all areas of real estate, business will be good because we know the who, what and why which are critical to success. Think of the demographic impact of a major relocation to a city and the ripple effects of the change in demographics in the area of relocation. But don’t forget the negative change in the area the company is leaving. Population changes such as education, age, employment, government, ethnicity and income are all small parts of the demographic changes which ultimately impact real estate. Where does someone live and will they stay or move when the demographics around them change? It does not matter whether you are involved in land, retail, office, industrial or hospitality, the demographics will impact your business.
Hopefully this will make you think about correcting someone or challenging them when you hear someone say “location, location, location” when they try to show their knowledge of real estate success. It is just a bunch of words which lack the true meaning of successful real estate. Show people you are a real estate professional and know all about what it takes to make real estate successful. Speak the correct words and say real estate is all about “location, timing, and demographics”!