Volunteer work is nothing new to Daryl Crotts, a Wichita optician, real estate investor and broker who will serve as 2011 president for the Kansas Certified Commercial Investment Member chapter based here. Crotts is active on numerous city boards, as well as the CCIM group, for which next year will be his second term as president. Commercial real estate is Crotts’ second career, a natural fit for an avid real estate investor after he sold Midwest Buying Group in 2000, the optical buying cooperative he founded with other area opticians. Today, Crotts serves as owner/broker of Crotts Commercial Real Estate — when he has time after all of his volunteer board work.
1. Summarize 2010 in commercial real estate in Wichita.
“(Bad) for some and OK for others. The people with established clienteles, clients with money, have had opportunities and have weathered the recession pretty well. The ones that haven’t don’t have the established clientele and are dealing with customers needing financing — financing that’s very difficult to get unless you’re the AAA+ credit client.
“Banks have told me whereas before they just wanted a financial statement from an investor, they now need three years of tax returns, copies of all leases and appraisals. So much more documentation than in the past, and not necessarily for the bank’s benefit but for the regulators. As they like to say, they have to look at you globally.
Premium content for only $0.99
For the most comprehensive local coverage, subscribe today.
“Cash is king. Always has been, always will be. Like (Steve) Clark, there are very savvy investors out there who don’t over-leverage. They’ve got the capital behind them to see them through an economic downturn.”
2. What does 2011 look like locally and nationally for commercial real estate?
“It depends on which naysayer you listen to. Some say we haven’t seen the bottom yet, and in some markets, sure. That’s true.
“There’s so much commercial paper coming due in 2011 and 2012 that will have to be refinanced. The question is whether there’s anyone out there willing to do that. If they don’t, there will be a fire sale.
“But if the economy improves and the regulators let loose of their restraints on the money, that can be avoided.
“Locally, I see the market improving. Slowly.”
3. What impact will the struggling commercial market have on downtown Wichita’s redevelopment?
“I would say downtown will progress either slowly or not at all in 2011, based on the fact that the same problems that plague the national commercial market plague downtown Wichita — lack of financing and lack of tenants.
“As companies downsize, a lot of what we’ve been doing is relocating people to smaller, more economical spaces. When you have space in Wilson Estates, space that went for $22 to $25 a square foot once, doing deals at $16 to $18, it makes it hard for the B or B-plus space to compete. Now, they have to be down at $14 to $15.”
4. What has CCIM done for you?
“Many things, because this is my second career. My first was as an optician. I had retail stores as the Spectacle Peddler in Towne West for 15 years, and our cooperative group that I sold in 2000 was very successful. It had given me a lot of cash to invest in real estate, and I had been an investor before I became a broker.
“My thought was getting a license would give me access to deals as they came available rather than waiting for others to pass on them. That couldn’t have been farther from the truth. I became the competition, and now I don’t get offered anything.”
5. How do you define CCIM’s mission in the industry?
“The chapter is about networking, technology and education. We educate commercial Realtors to be better real estate practitioners, we give them networking opportunities where they can associate with their peers and gain mentors, people they can go to with a question or a problem.
“It’s a great way for somebody new such as myself. Where I was competing with people with 25 years of experience in the industry, my lack of experience was offset by getting the education available through CCIM. It is world-class, equivalent to a master’s degree or a doctorate in commercial real estate.
“The other thing is the technology. We have 16,000 members of the institute, and a certain percentage of everyone’s dues helps fund technology development. As a result, we have the best technology in the commercial real estate world available to us.”