Ora Reynolds, president and CEO of Hunt Midwest
Innovative technologies like virtual reality, online marketing and the availability of big data were already transforming commercial real estate (CRE) before the pandemic. Social distancing measures alongside widespread adoption of remote work accelerated many of these trends.
To get a better idea of what the many trends influencing CRE will mean for the industry, we had a chat with Ora Reynolds, president and CEO of full-service real estate company Hunt Midwest. She pulled from her 30 years of experience to tell us how the CRE market was shaping up before the pandemic, where it is now and which directions it might take. See the full interview below.
Could you start by telling us a little bit about your background and why you chose a career in commercial real estate?
As a Chicago native, I worked as a bank teller throughout high school which led me to pursue a finance degree at Indiana University — yes, I was at the game where Bobby Knight threw the chair! After graduating, I moved to Tampa, Florida and joined NCNB National Bank and then Barnett Bank where I was a VP in corporate lending. Though I was supposed to focus on commercial lending I always gravitated toward making large real estate loans. In 1991, I answered a job ad at Hunt Midwest for a Manager of New Business Development position to look at acquisition and expansion opportunities for the company which was involved in amusement parks, real estate, and mining at that point in time. During my 30 years with the company, and now as President & CEO, I have been able to direct our evolution into a pure “ground up” real estate development company with a diverse platform of real estate product types in multiple geographic locations. As real estate developers we create the “built environment” for businesses and residents which is so rewarding as you drive down the street!
Considering the COVID-19 outbreak, what are your thoughts on the CRE market in the US today in terms of trends and challenges?
The pandemic has accelerated commercial real estate market trends that were prevalent in the years leading up to 2020. There are headwinds or tailwinds depending on which part of the CRE world you focus on. On the industrial side, e-commerce and online grocery shopping, a need for safety stock and the onshoring of supply chains has created strong tenant demand for distribution space. The data center industry has benefitted from the technology needs of e-commerce, work from home mandates, telemedicine, etc. In the multi-family segment, while current job losses will impact short-term occupancies, experts project more household formations and adult children again moving out of their parent’s house post-pandemic. For senior housing, the combination of quarantining, limited visitations and negative headlines has made move-ins more complicated. However, in the long term the benefits of social interaction and a physical support system will continue to be important to the families of the elderly population.
What differentiates the commercial real estate market in Kansas City from other major markets in the United States?
Located in the heart of America, our central location and infrastructure logistics allow distributors to reach 90% of the country within two days. Our affordable cost of living and quality of life attracts talented and skilled workforce. The diversity of industries in Kansas City, from transportation, distribution, automotive and advanced manufacturing to e-commerce, animal health, technology, and financial services allows us to weather the economic cycles. Our availability of land creates ample opportunity for those looking for a new geographic location. With multiple municipal jurisdictions, there is healthy competition for jobs and investment with heavy engagement from our local and regional economic development organizations.
How have you seen the industry evolve in the 30 years you’ve been involved in it?
There are so many more CRE product types that were not “institutionally” accepted until more recently. Thirty years ago, the continuum of senior housing options, luxury multi-family communities, climate-controlled self-storage and mission critical/technology real estate were not all mainstream investments for private equity, REITs or insurance companies. Demographics, technology, and lifestyle choices have driven many of these new “food groups”. The aging Baby Boomer population has created a continuum of senior housing options including levels of care that range from independent living, assisted living, memory care and the more traditional skilled nursing. Those of us in the industry need to be able to clearly explain the differences in these level of care to those considering the various options for their loved ones. The multi-family renter by choice — both millennial and empty nesters — that is looking for a flexible work/live/play lifestyle has fueled the development of resort-like luxury multi-family with heavy amenities and secure parking in both urban, suburban and “urban suburban” first-ring suburbs. Moreover, companies outsourcing their technology combined with the data that is now being transmitted has resulted in an unprecedented expansion of the data center industry.
Where do you see it going in the future?
Demographics, technology, supply chain logistics and new consumer buying patterns will continue to impact what product we develop and in what location. Real estate developers are resilient, and we will continue to adapt to the new business models as they unfold.
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’s always a challenge to evaluate the difference between being on the “cutting edge” versus being on the “bleeding edge” as we develop new product. It’s a delicate balance to watch trends for long enough to ensure that they are sustainable but not wait so long that you have entirely missed an opportunity.
What is your general assessment for the commercial real estate market in 2020? Have you spotted some interesting market trends, especially considering the current pandemic?
Many of the trends mentioned earlier are here to stay and were just accelerated a few years by the pandemic. But as for other changes in our day-to-day activities, our country has frequently had a short memory and has gone back to the activities popular prior to a specific event. So, with limited travel and recreational activities, consumers have now changed their habits — buying new homes in the suburbs, making most of their purchases online and transacting all their business on Zoom. However, in my opinion, I do believe our population as a whole will have a need for social interaction when the pandemic ends so the new normal will be different.
How has the evolution of online marketing impacted the commercial real estate industry?
The impact has been a game changer for CRE in so many ways. I have been in the business long enough to remember where marketing was about direct mail and printed collateral material that needed constant updating and flying a piece of property for aerial photography.
- Search Engine Optimization (SEO) and Google ad campaigns allow us to target potential tenants and direct them to specific areas of our website. Google ad campaigns and geofencing make it so much easier to be laser focused on who we are trying to connect with – whether that is a potential industrial tenant, a new apartment resident, a consumer looking for self-storage nearby, an adult looking for assisted living for their elderly parent, or a young family looking to build a new home.
- The use of social media (Twitter, LinkedIn, etc.) allows us to identify and track real estate trends, share our specific expertise, and tell our unique story.
- Drone videography allows us to tell our story, especially with a unique underground business park like SubTropolis. Stories from CNN, Bloomberg Business, and The Today Show allow us to create credibility with our prospects without a national media campaign.
- Live streaming webcam software allows us to share construction progress with prospects who cannot drive by a new building to see the status. Google Earth also allows us to do initial due diligence on new projects.
All in all, tech has transformed the way business is done in CRE.
Interested in being interviewed for our Expert Insights series? Feel free to reach out to us at [email protected] or check out other articles from our series here.
