With 34 years of experience in the commercial real estate field, Ernest L. Brown is well acquainted with all sides of the industry, including selling, leasing, foreclosing and managing properties for a range of individual and institutional clients. He is currently affiliated with Rohde, Ottmers & Siegel where he is specializing in high-worth individual client services.
Brown had previously spent 16 years as executive VP and managing director for Grubb & Ellis, followed by shorter periods with two other companies. Throughout that stretch of 20 years, he oversaw all aspects of the companies’ operations, including the work of more than 30 commercial brokers.
Brown is a member of the Certified Commercial Investment Member Institute (CCIM Institute), a prestigious industry achievement, and has served on the organization’s national board of directors. Active in other industry groups as well, he also serves on the board of trustees for TMI, the Episcopal School of Texas, which all three of his children attended. He is a native San Antonian who, as a youth, spent his summers in Port Aransas as a fishing guide.
Could you define for our readers what you do?
I am a commercial real estate investment adviser. There are many ways you can be in commercial real estate business. Some people represent sellers, some represent buyers, some do only apartment sales, etc. I tend to work with small private capital clients, people who are looking to invest $500,000 to $2 million into properties valued between $1M to $6M. I have done a number of things in commercial real estate, including managing a real estate firm that had an appraisal department, property management department, as well as a brokerage. I eventually realized that I needed to stop that and do what I really love, which is what I do now. I can’t tell you how happy I’ve been since.
Why is it more satisfying than running a company or making huge institutional sales?
I like working with individuals who really need advice and guidance to make sure they are doing the right thing…. Every single transaction is different. When clients come to me, I ask them things like: What is your risk tolerance? What sector are you familiar with? Why do you want this investment? Is it ego? If so, you may want to buy a high-rise office building, or maybe you want a high return and you don’t care what the property looks like. In that case, an industrial park may be right for you. Also, do you want something that doesn’t come with management hassles whatsoever? So, it’s a process and it takes time. A lot of people don’t really know what they want to buy when they first come in. For instance, we had a gentleman from Mexico who had $1M to invest. We spent almost two years working with him on pros and cons of different types of property. To me, developing a relationship and helping somebody buy something that they really want, feels good.
What did the Mexican buyer opt for in the end?
He ended up buying a multi-tenant industrial property because that fit the parameters of what he was looking for – higher returns, low maintenance since the tenants take care of their own businesses.
What are some crucial things that investors should know before buying?
Different types of properties have different risks associated with them. An industrial facility is totally different from, say, a retail one. If the investors don’t know that, they can make a huge mistake. Retail tenants operate on demographics, traffic, gentrification of the neighborhood, signage, available parking, tenant mix. What’s important for an industrial property is power, dock heights, the warehouse clear height, and such. The owner deals with completely different tenants and he is making the decisions about which tenants to let in.
Can you mention some properties that you are dealing with right now?
Right now we have an office building under contract in San Antonio, two industrial buildings in Houston, and another one in Dallas, as well as an office building in Laredo, a retail center in Sequin and others. Our work is really state-wide.
Do most of your individual clients want to invest in projects that do not require hands-on involvement?
That depends on the age of the client. You typically find younger and middle-aged people looking to still put some sweat equity into the property in the hope of getting higher returns. A number of older clients, however, tell us that they don’t want to deal with oversight and management. So, we move their assets into single-tenant, long-term leases. Then they don’t have to make monthly decisions and look at reports. They simply get a check from the tenant until the lease expires.
Is San Antonio an active market?
Yes, active, but a tight market. There isn’t that much to buy. San Antonio is growing and is doing great and it’s projected to continue to grow and do well. So, if you have a property here, why sell it? We would love to buy more industrial properties here and we approach owners all the time. When a property becomes available, the transaction is usually quick.
What personality traits must a broker/adviser like you have to succeed?
Persistence. It’s a huge component of this business. There’s a lot of psychological warfare. You are battling with yourself and everybody else. I’ve been doing this for 34 years, yet I went from last November to March without closing a single deal. But you just have to keep on working. Now we are going to have several closings in June in July.
What do you do when you are not working on a deal?
I run a couple of interesting groups. One is called Dive Bar Bandits. Most members are in commercial real estate in some way, lenders, title companies, service providers, landscaping companies, etc. We go to a different dive bar every month. It’s part of networking, which is very important. The more networking you can do, the better. I am also on the board of CCIM Institute’s San Antonio chapter. CCIM certification is considered to be the Ph.D. of real estate. And I am a member of other organizations, too, including CREW (Commercial Real Estate Women) and RECSA (Real Estate Council of San Antonio).
How do you recharge your personal batteries?
I am an avid outdoorsman. I have done everything from parachuting, scuba diving, and bungee jumping to hunting, fishing and bird watching. My wife and I are both avid bird watchers. We are going to Scotland this summer and we have already bought the bird book about the birds in Scotland. We do that everywhere we go. When you go somewhere and focus on something specific like bird watching, you pay a lot more attention to the entire environment. It’s eye-opening to me. Here in Texas, I spend at least three weekends a month away from the city, even if just clearing brush on the family ranch. I am trying to learn all about the trees, grasses, and flowers we have.
By Jasmina Wellinghoff
Photography by Janet Rogers