Mauian to Head International Commercial Real Estate Organization

Lahaina Realtor is 2012 CCIM national president. Photo courtesy L. Koch

Lahaina Realtor Leil Koch will head an elite international commercial real estate professional organization. His term as president of the Chicago-based Certified Commercial Investment Member (CCIM) Institute begins on January 1.

Long active in real estate on Maui and Oahu, Koch is the first CCIM Institute president from Hawaii. Out of an estimated 80,000 commercial realtors nationwide only about 9,500 have earned the CCIM designation which is considered the PhD of the field. Requirements include extensive coursework, practical experience and a difficult written exam. The Hawaii CCIM chapter is based in Honolulu and has about 200 members statewide.

Koch said his interest in the national organization grew out of his work with the local CCIM chapter. “Once I was involved here, I became involved in national committees, became a regional vice president, and worked my way up.”

In the coming year Koch hopes to personally visit about 20 of the organization’s 60 chapters worldwide. In 2011 he estimated he traveled about 135,000 miles on CCIM business. As president he expects to log over 200,000 during the coming year.  He recently returned from a visit to Taiwan where his remarks on commercial real estate in the US were heard by an audience of 700 and widely covered in the press there.

Big Cash Build Up, Strong Interest in Apartments, Some Regions Growing

Koch said he sees some bright spots on the national commercial real estate scene:

* “One of the offshoots of the distress surrounding foreclosures is more people are renting. Consequently there’s increased interest in investing in apartment buildings and multi-family dwellings where occupancy rates are high, rents are increasing and cash-flow is good.”

* There’s also interest in warehouse and industrial space. “You have a huge cash accumulation both in the banks and in the profitable companies. As the recovery picks up some of this cash is going to expansion and that translates to sales and leasing of industrial and warehouse properties.”

* Retail and office space is the last segment to recover. He characterized retail nationally as “overbuilt” and “caught in market erosion.” These two areas, he added, are tied to consumer spending and confidence which have yet to improve.

Koch said that despite the tendency to portray the US economy as uncertain, there are “actually parts of the country that are on the rise.” He named New York City, Washington, DC and  Dallas-Houston as areas of growth. “Finance, politics and oil all create demand for commercial real estate.”

“Even in the most depressed states like Nevada, Florida and Arizona there are tremendous opportunities,” he said. These troubled resort and vacation areas are starting to show “glimmers of hope” as they work their way toward rebuilding.

Hawaii is Not the Mainland

The situation in Hawaii is somewhat different.

“Here,” he said, “you have two parts: On Oahu the unemployment rate is much lower than the national average; there the recovery is well underway. It’s been tougher on the neighbor islands, but the recovery is slowly arriving.”

Because Maui is generally built around condos and single family homes “we don’t have the interest here in apartments that has been strong in other areas.” Like the mainland he thinks retail and office space in the island will be last to show improvement.

Koch returned several times to the role of cash in the current economy. Because of the uncertain outlook “there’s a tendency to hoard cash.” Right now he estimated “US corporations have $1.4 trillion in cash sitting on their books. That’s an all time high.”

“You can’t keep holding cash indefinitely,” he said, “eventually you reach a tipping point and it comes flooding out.”

He did not want to speculate just how far out the tipping point might be.

CCIM is part of a global commercial real estate network with members across North America and more than 30 countries. For more info see their website at www.ccim.com.